6th Oct 2006 11:50
Guinness Peat Group PLC06 October 2006 GUINNESS PEAT GROUP PLC ANNOUNCEMENT The following is the text of a letter posted today to the shareholders ofGuinness Peat Group plc ("GPG") whose shares are registered on the New ZealandRegister. Copies, for information, are also being sent to GPG's shareholders registered onthe UK and Australian share register. "6 October 2006 Dear Shareholder, I am writing to update you on the issue of the government's proposed changes tothe taxation of offshore investments. You will have read that the government has backed off from its originaldraconian proposal in response to overwhelming opposition from the publicincluding the strong stance taken by GPG and its shareholders. The governmenthad already announced its intention to grant GPG shareholders a five yearexemption from the proposed regime. This was to enable the government tocomplete its review of the controlled foreign company regime and consequently toallow GPG to consider its options when that policy is finalized. The government has now proposed a change to the original Bill which is equallycomplex and raises a host of issues that have not been appropriately addressed. In short the new proposal for taxing offshore investments is to tax 5% of theopening value of your offshore shares (other than listed Australian shares) in agiven year. As I have said publicly, this is a capital gains tax in disguise.Full details about the new proposals can be found on the GPG New Zealand websitewww.gpg.co.nz along with a selection of media stories relating to the issue. It is GPG's view that now that the government has fundamentally changed theproposal contained in the original Bill it should now engage in a normalconsultation process to fully consider the new proposals. A failure to do thiswill result in a set of rules that do not achieve any of the objectives of thereform and that are complex and potentially full of anomalies andinconsistencies. Through me, GPG has made representation to the government requesting that ittake the suggested new rules back to the drawing board and start theconsultation process again. We understand that we are supported in our view bythe New Zealand Institute of Chartered Accountants, the New Zealand Law Societyand various other influential submitters. GPG has sought confirmation that the GPG exemption agreed to with the governmentremains in place and will apply to any new regime. We expect that thegovernment will honour its commitment to you as a GPG shareholder with theresult that all GPG shareholders will be treated as if they owned shares in aNew Zealand company for the five year period. The select committee is still deliberating on this issue and it is our hope thatit will see sense and return the issue of offshore rules to officials for robustand proper examination. GPG will write again to shareholders when the way forward becomes clearer.However, we will keep the above website up to date with information relating tothe issue. Yours faithfully A I (Tony) Gibbs" Richard RussellCompany SecretaryGuinness Peat Group plcTel: 020 7484 3370 6 October 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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