Hands up for a Capital Gains Tax
Hopefully you all got your tax returns done on time.
I sent mine in at the last minute as usual despite having all the hard work done for me in the Sharesight tax reports. Being able to export all my share-related data from Sharesight into Xero is also a huge time-saver when it comes to preparing the annual accounts for my Family Trust. It’s a great example of the real benefits that cloud computing can deliver.
I get caught under the Foreign Investment Fund (FIF) regime and I shudder to think of the time I would have wasted on this if it were not for the Sharesight FIF report.
Accountants (the ones not using Sharesight) hate FIF reporting as much as their clients because it is simply not possible for them to do the required work for a fee that either they, or their clients, would consider reasonable. National seems to be reluctant to get rid of this ridiculous tax and Labour seems hell-bent on making things worse.
Fortunately the likelihood of a more comprehensive capital gains tax is the same as the likelihood of Labour forming a Government after the next election. That is not to say that there aren’t some good reasons for introducing a capital gains tax. But let’s remember that our experience with FIF shows how real the objections to a capital gains tax are:
- It’s expensive for taxpayers (in time and/or accounting fees)
- It’s complicated (hands up all those who understand FIF!)
- It’s avoidable (avoid buying shares caught under the FIF regime)
- It does not eliminate bias
- It’s not cost-effective (there is no simple solution that will raise significant tax in the short-medium future)