The application of GST rules to managed funds in New Zealand has been vexed for decades. Over the years the diverse approaches taken have highlighted the need for clearer guidelines. Thankfully, recent guidance from Inland Revenue provides much-needed direction.
Broadly, the guidance clarifies that fees for funds that are directly managed are exempt from GST. Administrative fees paid by fund managers to third parties are subject to GST. When a fund is managed by an external third party, the GST is a mix.
What should fund managers do now?
Fund managers now need to sit with a trusted advisor revising their GST compliance in light of these new guidelines to review whether their current systems and practices are compliant and, where there is any flexibility or ambiguity in the interpretation, ensure that the most favourably interpretation for the fund is identified.
With support from Buddle Findlay's expert advisors, you can confidently manage these adjustments, ensuring compliance and optimizing tax strategies. We offer advice tailored to your fund's needs and we invite fund managers to contact our banking or tax teams at Buddle Findlay.
