I'm a Brit who has settled permanently in NZ and has been here over 6 years now. The lack of investment options in this country is one of the few things that really annoys me about NZ - the rest is great!
Hi Mark,
I wish I had met you last year when I arrived in New Zealand, and spent several nights re-reading the NZ tax laws regarding FIF! I think I'm only now starting to understand how they work!
I was the one who started the mistake regarding DirectBroking's custodial fees - since I was used to this setup from my previous country, when I saw that I just thought "oh dear, not again...". Woops!
I can now heartily recommend DirectBroking! Trading fee is NZ$29.90 for New Zealand shares for up to $15k and 0.2% for anything above that, and AU$29 for AUS shares up to $30k.
Compare to ASB Securities : 0.3% with a minimum of NZ$30.00 per trade, that's $45 for $15k shares, $30 for $10k.
So if you're regularly investing between $10k and $15k, Direct Broking is better, under that and they're pretty much the same.
So you recommend the NZX regular investment program? We are regularly investing, but hitting the broker fee is basically wiping out dividend "payouts" at the moment (We are signed up for DRIP though).
I also despair at the high Smartshares fees - crazy high compared to Vanguard!
We've invested in some Aus Vanguard and US Vanguard ETFs, via the ASX market, and encountered yet another problem - to have dividends paid out, you need an Aus bank account. The US Vanguard ETF doesn't have DRIP options, not sure about the Aus index. IShares sends a cheque - fantastic, except that to bank that Australian cheque can cost up to $15! Together with FIF it's a lose-lose proposition.
We're in our 4 years of FIF exemption -
http://www.ird.govt.nz/yoursituation-nonres/move-nz/temp-tax-empt-foreign-inc.html, so fortunately don't need to worry about FIF right now, but I cringe thinking about paying that much tax.
Apparently it's because the government came up with some kooky theory about all those "darn US stocks" not paying out dividends and instead growing in value, means it's some kind of tax haven for New Zealanders. Give me capital gains tax any day! At least I don't keep paying and paying for it every year.
The worst is not getting any credit if your investment drops in one year, and then gains in the next. Even if you haven't made up what you've lost in the down years, you still pay tax!
Thanks for your comments :)