Tuesday 6th November 2007
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To help investors come to grips with all of these changes, as well as the other main areas of tax affecting investments, ABN AMRO Craigs have published investment TAX FACTS, a 54-page book that provides an introduction to the taxation of investments.
Editor of ASSET Magazine, David Chaplin, recently reviewed this book on behalf of Good Returns Bookstore.
Who would’ve thought a book on tax could find such an enthusiastic audience? But that’s what ABN Amro Craigs chief investment officer, Cameron Watson, has achieved with his new book Investment Tax Facts. Watson’s book has been one of the fastest-selling items on the Good Returns bookstore recently and perhaps, with a little thought about the current state of the market, that is not so surprising. This year has seen the biggest upheaval in New Zealand investment tax laws in at least a generation and the public, as well as advisers and other professionals, have much to absorb.
The introduction of the Fair Dividend Regime (FDR), the advent of Portfolio Investment Entities (PIEs) last month and with that, KiwiSaver, has made all previous tax manuals redundant.
In his book Watson aims to reduce all the techno-babble to a level ‘mum and dad’ investors can understand. As he said in the Investment Tax Facts launch material: “The wording is general and the emphasis is on explaining how the tax rules work in practice, rather than on providing a dissertation on the intricacies of tax legislation.” “We make) no apology for prioritising clarity ahead of exactness.”
And while Watson says the publication is aimed at personal investors, there should be enough meat on the bones for financial advisers to improve their understanding of what the tax changes mean.
The 54-page book is structured around 11 chapters including the aforementioned newcomers - FDR, PIEs and KiwiSaver - along with old favourites such as fixed income, New Zealand equities and property.
Each section is concluded with brief commentary on the most important issues investors should consider when coming to grips with each of the topics.
At the end of each section are some investment comments that provide a view on the key investment issues investors should consider under each topic.
This is the second book for personal investors from ABN Amro Craigs. Risk, Return & Reality, also written by Watson, was published in 2004 and provides an introduction to portfolio investing.
Investment firms are generally noted for the production of glossy brochures and/or dense, incomprehensible product disclosure statements - ABN Amro, therefore, is to be applauded for recognising investors, above all, require a clear explanation of investment basics.
As, ABN Amro Craigs chief executive, Frank Aldridge, put it in the release publicity: "Tax is such a pervasive issue for investors that we believe it is appropriate for firms like ours that provide investment advice to be able to provide general information to investors about tax.
“We believe investment advisory firms have an important role in education and in providing guidance and information for personal investors that is straightforward and helps build understanding of markets and the investment process." According to Watson, investing in a tax-efficient manner is one of the four pillars of a successful long-term investment strategy. The other three are: prudent diversification; investing in high-quality investments; and, minimising fees.
Perhaps Watson has three more books in him but Investment Tax Facts will do for now.
Investment Tax Facts is available through the Good Returns Bookstore (www.goodreturns.co.nz/books or call 0800 345 675)
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