GPG's FIF tax exemption to expire next March

Guinness Peat Group says the government has indicated GPG's exemption from the foreign investment fund (FIF) tax rules will expire on March 31, 2012.

Under the FIF rules, those investing more than $50,000 in offshore funds with the exception of Australia are deemed to earn 5% of the value of their investments and must pay tax on that amount, regardless of what they actually earn.

The British-domiciled GPG gained a five year exemption from the tax, which came into effect on April 1, 2007, after former director Tony Gibbs conducted a high-profile campaign against it.

New Zealand Shareholders' Association chairman John Hawkins says he had already been aware of the government's intention to let the exemption expire and has asked an accountant for advice on what it will mean for GPG shareholders.

GPG is in the process of winding down and returning capital to shareholders.

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