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Capital gains tax, managed funds and the value of dividends: The case of New Zealand

Hodgkinson, L. and Partington, G. (2013) Capital gains tax, managed funds and the value of dividends: The case of New Zealand. The British Accounting Review, 45 (4). pp. 271-283. DOI: 10.1016/j.bar.2013.06.005

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Abstract

The taxation of capital gains for Managed Investment Funds in New Zealand was abolished in October 2007, putting these entities on a similar footing to private investors. Prior to this change most private investors were not taxed on capital gains from investments in New Zealand companies, whereas Managed Funds were taxed on these gains. New Zealand company dividends carry imputation tax credits and thus had a tax advantage for Managed Funds before October 2007. After the change the value of dividends relative to capital gains declined substantially for Managed Funds. The evidence is that the market value of the dividends, particularly for high dividends, also declined substantially subsequent to the tax change.

Item Type: Article
Subjects: Research Publications
Departments: College of Business, Law, Education and Social Sciences > Bangor Business School
Date Deposited: 09 Dec 2014 16:37
Last Modified: 23 Sep 2015 03:01
ISSN: 0890-8389
URI: http://e.bangor.ac.uk/id/eprint/569
Identification Number: DOI: 10.1016/j.bar.2013.06.005
Publisher: Elsevier
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