Letter to NZ Shareholders
Guinness Peat Group PLC
06 October 2006
GUINNESS PEAT GROUP PLC
ANNOUNCEMENT
The following is the text of a letter posted today to the shareholders of
Guinness Peat Group plc ("GPG") whose shares are registered on the New Zealand
Register.
Copies, for information, are also being sent to GPG's shareholders registered on
the 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 to
the taxation of offshore investments.
You will have read that the government has backed off from its original
draconian proposal in response to overwhelming opposition from the public
including the strong stance taken by GPG and its shareholders. The government
had already announced its intention to grant GPG shareholders a five year
exemption from the proposed regime. This was to enable the government to
complete its review of the controlled foreign company regime and consequently to
allow GPG to consider its options when that policy is finalized.
The government has now proposed a change to the original Bill which is equally
complex 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 the
opening value of your offshore shares (other than listed Australian shares) in a
given 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 website
www.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 the
proposal contained in the original Bill it should now engage in a normal
consultation process to fully consider the new proposals. A failure to do this
will result in a set of rules that do not achieve any of the objectives of the
reform and that are complex and potentially full of anomalies and
inconsistencies.
Through me, GPG has made representation to the government requesting that it
take the suggested new rules back to the drawing board and start the
consultation process again. We understand that we are supported in our view by
the New Zealand Institute of Chartered Accountants, the New Zealand Law Society
and various other influential submitters.
GPG has sought confirmation that the GPG exemption agreed to with the government
remains in place and will apply to any new regime. We expect that the
government will honour its commitment to you as a GPG shareholder with the
result that all GPG shareholders will be treated as if they owned shares in a
New Zealand company for the five year period.
The select committee is still deliberating on this issue and it is our hope that
it will see sense and return the issue of offshore rules to officials for robust
and 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 to
the issue.
Yours faithfully
A I (Tony) Gibbs"
Richard Russell
Company Secretary
Guinness Peat Group plc
Tel: 020 7484 3370
6 October 2006
This information is provided by RNS
The company news service from the London Stock Exchange
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