5th May 2006 16:21
Guinness Peat Group PLC05 May 2006 Guinness Peat Group plc The following is the text of a letter posted yesterday to GPG Shareholders whoseshares are registered on the New Zealand Register. Copies, for information, are also being sent to GPG's Shareholders registered onthe UK and Australian share register. "4 May 2006 Dear Shareholder, Capital gains tax to hit thousands of New Zealand GPG shareholders I am writing to you regarding the Government's recently announced proposedchanges to the tax rules on share investments. Unfortunately, if these changes become law thousands of New Zealand GPGshareholders will be affected. As a director, I feel it is my duty to inform youof the threats contained in the new tax proposals. In addition I respectfullyseek your support in persuading the Government to drop the proposals, or atleast amend the proposed legislation before it is introduced into Parliament. GPG is owned and run predominantly by New Zealanders. The majority of ourdirectors and shareholders are New Zealanders and we have significant NZinvestments. But because GPG is registered in the UK it will be treated underthe new proposals as a foreign company. At the moment New Zealanders' investments in companies in what is termed the"grey list" of countries generally attract New Zealand tax on dividends only.These countries include Australia, US, UK, Canada, Japan, Germany and Norway.GPG is treated as a UK company. The Government now proposes to abolish the grey list which will mean thatinvestors who hold foreign shares (except in Australian companies) stand to behit with a capital gains tax on 85% of the unrealized gains on theirinvestments. We have asked the Government to keep the grey list for UK companies, orotherwise amend the proposed changes so that they do not apply to New Zealandersholding GPG shares. The request has not been granted. However, the Governmenthas been prepared to grant an exemption for all Australian listed companies,whether or not the Australian company has anything to do with New Zealand andwhether or not it pays any New Zealand tax. I am staggered that the Governmentis not prepared to treat GPG at least as well as it is prepared to treat allAustralian listed companies. The details behind the Government's proposed changes are complex and noteveryone is affected. However, the overall result will be negative for NewZealand investors in GPG. For further details on the proposed changes please goto www.gpg.co.nz We will continue to seek to have the proposed changes amended. I urge you towrite to the Prime Minister requesting her Government to rethink these proposedchanges so that an unrealised capital gains tax is not imposed on thousands ofNew Zealand GPG shareholders. Yours faithfully A I (Tony) Gibbs You can write to the Prime Minister using the enclosed envelope or alternativelyyou can send correspondence to the Prime Minister by email [email protected]" Richard RussellCompany Secretary Date: 5 May 2006 Tel: 020 7484 3370 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Coats