Having said that, it took a lot of lobbying to get it because there were lots of issues and I've given you a brief overview. So, some common sense prevailed and it was agreed it is going to take two to three years for the government to sort out the CFC regime and it's going to take GPG four or five years in coming here, if it's going to come here, therefore the answer was - it was my answer - give us the five year exemption or a five year holiday and that was agreed basically, that was agreed. Now we've never said we won't consider it, but what we've also said is - and the government agreed - that it was impossible to do it and that the current CFC regime - that's the New Zealand controlled foreign corporation regime - is mid-point in being changed and re-thought about right now, so how could you ask us to come here when we wouldn't know what the current tax rules are or likely to be. This is not something you think: "oh what a good idea, lets go and register in New Zealand tomorrow morning". There's all sorts of issues - there's accounting issues, there's banks to consider, there's debt holders, there's bond holders, there's capital note holders, there's all sorts of things. GPG and its subsidiaries, we're in over 75 countries around the globe and the enormous job of trying to re-register GPG in New Zealand would take years, literally years.
The government argued with me that GPG should simply re-register in New Zealand and while that's easy to say, it's very hard to do.
So while we might be a company that is officially registered offshore - and we are, we're registered in England and we pay tax in England and our head office is in England - we very much feel part of New Zealand and its environment.Īll of the GPG directors are New Zealanders with the exception of one, who is an Australian. Our register is absolutely dominated by New Zealanders and I think we've got, I'm going to say, 70 or 80 per cent of our register is held in New Zealand. Originally I went to bat against the original proposal on the basis that GPG, while we may be registered in London was basically, I'm going to say, an historical accident, but GPG is predominantly owned by New Zealanders. So that's now called the FDR regime and that came into effect on about the 19th of December, just prior to Christmas and it takes effect, as you said, in April. In my view this is still a capital gains tax but it's far better than being taxed on 85 per cent of unrealised gains. What that means is every company, apart from New Zealand and some Australian companies, have been deemed to have paid a five per cent dividend whether they've paid it or not. Now, there was a lot of us who went to the select committee over this and there was, I think, over 3,600 submissions and at the end the government abandoned that terrible idea and they came up with something that is now in place called the fair dividend rate. Can you explain what the tax changes mean for New Zealand investors in foreign companies and how GPG will be treated under the regime? Last year was a big year of changes because originally the tax changes were that the government was going to tax anybody holding shares offshore, excluding Australia, they were going to tax people on an 85 per cent unrealised gain basis ie they want to tax people on something they haven't got and something they may never have. GPG has a five year exemption from the new regime. Top of mind for many of our readers are the tax changes on overseas shares coming into effect in April. Gibbs also grows his own brand of Ezypeel mandarins on his Matakana property, north of Auckland, which led to a friend giving him the nickname, The Mandarin of Matakana. He has worked with 1980s corporate raider Sir Ron Brierley, since the 80s - first with Brierley Investments and then Guinness Peat Group following a corporate restructure.
Gibbs has gone from his first job peeling potatoes on a boat to more than 20 years of high level involvement in New Zealand listed companies.
This Business Chat is with Tony Gibbs, executive director of Guinness Peat Group, chairman of Turners & Growers Ltd and Staveley Inc., and a director of Coats plc, NGC Holdings Ltd, PrefSure Holdings Ltd and Tower Ltd.
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