RNZ's money correspondent Susan Edmunds. Photo: RNZ
Send your money questions to susan.edmunds@rnz.co.nz
I have a question regarding shares I have, which are held on the NYSE in the US. I have owned these for between 15 and 25 years with the last purchase made in 2009; they are currently valued at about US$200,000. I earn modest quarterly dividends which are subject to US federal taxes.
Owing to the current economic situation in NZ and being out of work for 15 months I now need to sell these shares. I have tried to read online to understand what taxes this sale will attract both in the US and in NZ but have been left more confused! Will this sale be subject to NZ taxes? If US federal taxes are applied can these be recovered?
Jayesh Dahya, a director at Deloitte, has provided the answer to your question.
Dahya says the US tax system has a reputation for being pretty complicated.
"Taxes can vary by state and based upon your own facts and circumstances. While we are not US tax advisers, we understand US citizens/green card holders/tax residents could be subject to capital gains tax (up to 20 percent for shares held for more than one year).
"As a general rule non-residents of the US should not be subject to US capital gains tax in respect of listed shares. If the shares are held with a US institution, they may withhold tax on the gains in which case you may need to file documentation to declare your non-residence status. As the US regime can be complex, specific advice may need to be sought from a US adviser having regard to your specific circumstances and US tax residence status."
As for the New Zealand part, you shouldn't have to pay any further tax on your gains here as long as you didn't buy the shares specifically planning to sell them.
"You should have been paying New Zealand taxes each year under our Foreign Investment Fund rules while you've held the shares, and you should include this again in the year you sell the shares," Dahya says.
Why is it calculated that you need more retirement savings to live in a big city compared to the provinces? I am moving from Dunedin to a central suburb in Auckland and I have calculated that my expenses will be less. Food is cheaper, particularly fruit and vegetables, I can walk to all amenities instead of driving, buses are more frequent, and heating costs will be lower. I'm moving from an old house to a modern apartment (similar value) and my rates/body corp versus rates/old house maintenance will cost less also. I'm wondering what these assumptions are based on.
I asked Claire Matthews, who is the author of the retirement spending guidelines reports that Massey University produces.
She says they aren't based on any assumptions.
"They are based on what retired households are currently spending in these areas. Higher spending in cities may reflect greater opportunities or may simply reflect the type of lifestyle sought by those living in those areas."
Some of the biggest differences are in food, transport for "no frills" retirees, recreation and culture, personal care and insurance.
It would make sense to me that some of that would reflect having more ways to spend money in cities - more events and activities to attend and spend money on, maybe, and more shops from which to buy food.
The report is a guide rather than a definitive prescription for any individual - you could take what's useful from it for your planning, bearing in mind that your own situation might well be different.
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