Larry Williams interviewed David Cunliffe on Labour’s capital gains tax yesterday and established that it will be complicated and arbitrary.
One example of that is managed funds.
KiwiSaver managed funds will be exempt but anyone owning exactly the same shares in a managed fund will be taxed.
The Taxpayers’ Union highlights another aspect that Labour has not – a CGT will be a death duty in drag:
Responding to confirmation that under Labour’s capital gains tax policy children would have to pay the tax if they sold a family home after both parents have passed, Ben Craven, Spokesman for the Taxpayers’ Union, says:
“Labour’s capital gains tax is looking more and more like a death duty in drag. The vast majority of estates are liquidated, even where the family home is in a trust to the children.”
“The last time death duty existed in New Zealand was 1992. It appears that Labour are looking to reintroduce it but under another name with far more complexity. When children lose their parents they should be encouraged to put the inheritance to good use. Instead, Labour’s policy would whack them with a tax bill.”
“If Mr Cunliffe’s comments to media are correct, his policy will create a cruel tax incentive to quickly sell the family home while parents are still on their death beds. Mr Cunliffe’s statements to the media must be mistaken, or Labour really haven’t thought this one through.”
The tax won’t be levied if the house is sold in 30 days but few estates are settled and houses sold that quickly.
CGT wouldn’t be imposed if a family member lives in the house but that doesn’t happen very often.
When it does, unless it’s an only child, it’s usual for only one beneficiary to buy the shares of other family members and those gains would be taxed.