Issue Two | Twenty Nineteen
MAGAZINE
INTRODUCTION:
NIGEL SMITH Founder - Covisory Group
Welcome to our latest Covisory Connect. With each publication we try to reflect the issues that we are dealing with in our client meetings and advice. Lately we have been discussing with our clients the balance between how we can help our children, yet still not spoil them. Many families have built sizable wealth through the hard work of typically baby boomers growing successful businesses, often with long hours, financial risk and stress. Now the business has been sold or it is managed for them and mum and dad have some financial security and independence. This fear is the recently coined phrase “trust fund babies”, connotating children that are financially dependent on the family trust for regular financial payments to fund increasingly lavish but lazy and unfulfilling lives. While many readers have come from humble upbringings, they want their children’s needs to be met, but for them to know hard work, core values and a decent dose of philanthropy so they realise how lucky they are.
Parents are also often hit up for funds for a deposit for a house, even if the children and their partners have worked and saved hard. How can this be protected if their relationship fails so that their partner does not walk off with half your money. From years of dealing with diverse client situations we have seen the good, the bad and the ugly but we have learned that there are no one answer fits all solutions. It’s a matter of understanding what may work best for each situation. Sadly, just recently, I ended up in court as a witness in a relationship property dispute. One of the partners, who ran successful businesses, had kept much of their real wealth hidden from the family in fear of spoiling their children. In the end they may have kept their children from being spoilt but the result was a divorce and a family who will not talk to each other again. Wealth is not a bad thing. What is bad is not teaching children to manage and respect money, and the good that it can do. So let’s have a conversation and see what works for your family.
Nigel Smith www.covisory.com nigel@covisory.com
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CONTENT
Featured Post — 04
Have ‘the talk’ about Money with your children How to keep a lid on the Bank of Mum and Dad
Moving Opportunities
06
12
Business — 16
A Risky Business
General Interest— 21
Entrepreneurship without an age limit Travel — 22
The Mediterranean
Covisor y Conn ec t Ma gazin e l 3
FEATURE:
Make ‘the talk’ about money with your Kids
In our practice, one of the more challenging aspects of family planning is settlors of a trust not trusting their children to manage his or her own money, let alone significant funds tied up in trusts after the settlors have died. There is a reluctance to involve children in decisionmaking aspects of family structures mainly due to trust issues the parents have with their children, and sometimes spouses of the children. These are genuine concerns, and we continue to work with clients in this area to help smooth the transition. The last thing anyone wants is the next generation to have no idea about money and then for the substantial assets built up over time to be wasted. So, what can be done? There are a few things that can be considered as standalone techniques or combining several different techniques, and I am not talking about having an Agee jar on the kitchen windowsill to encourage saving. This might work for a five-year-old, but not someone in their mid-20’s. However, it is essential to ensure the ages of children are considered in any strategy as it believed that a lot of money habits formed by children are entrenched by the time they are 7 years old. Regardless of
what age children are, we have found that allowing children into a decision-making process is very important for their financial education, otherwise they are disengaged and lack the skills to manage theirs and potentially the family money later in life..
Some techniques to consider: 1. For those who have children who are teenagers, it is essential that they learn about budgeting at this age. This can be achieved through bank account and allowance control and using a budget spreadsheet to keep within. It is important to discuss wants versus needs at this stage. Another option is incorporating children into family budget discussions. 2. For those children who show an interest in investments at this age, playing a game to invest in stocks or other investments and then track performance over a period is helpful. 3. Teaching a child about philanthropy is becoming more and more necessary. The concept of giving, either through donations of money or time through volunteering for charities, is becoming a priority in today’s modern society. 4. For those with older children who have either left home or are increasingly independent to ensure they learn about family businesses or investments, they can be added as advisors to boards to sit in on meetings and learn about the family financial holdings. Eventually, this may lead to proper directorships or trusteeships.
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5. We have also seen some families set aside some
There will also be children who will not be interested
funds for the children to manage themselves
financial matters. The concern here is the parents
along with professional advisors. This separate
continue to financially support those children until
fund can also include a charitable object as well,
well after they should be financially independent.
so not all funds go to the child, but they are forced
This becomes a habit for both the parents and the
to provide benefit to others. Having a professional
children, and it is hard to break the longer it goes.
advisor involved in the structure can also help a
Parents do support children in several different ways,
child find his or her own way without too much
financial assistance being one of them, but the last
interference from the parents.
thing any party would want is for financial support to carry on indefinitely. Often from a parent’s perspective, the hardest thing will be is to say no. For those with substantial family assets children should be educated on the ramifications of entering a long-term relationship without adequate protection. This can be a challenging conversation, but a necessary one in today’s environment for sorting our property when a relationship splits. It is clear there is no right answer here. All we can recommend is to start talking to children about money as soon as you can and involve children in financial decision making as much as possible.
Marcus Diprose www.covisory.com
Regardless of what path is chosen, and we emphasise
marcus@covisory.com
that every family will have different considerations, it is important not to be overly secretive about family finances, especially as children get older. In our experience, those families who have parents that are secretive are the ones that end up in arguments later. Changes to the Trustee Act scheduled for later in 2019 will make this information available to all beneficiaries but be open and honest will help limit any family squabbles going forward.
Have you considered including your children in family Covisor y Conn ec tbudget Ma gazin e l 5 discussions?
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FAMILY:
How to keep a lid on the Bank of Mum and Dad
If you are like me and have adult children in their mid to late twenties and in full-time employment, the subject of working towards owning their quarter acre of paradise will undoubtedly have come up in the conversation. For many families today, the children increasingly
traps we needed to be aware of. As this is increasingly
have crippling student debt on entering the
a conversation that is coming up with many of our
workforce, even if they have had part-time jobs
clients here are a few of the tips discussed and traps
throughout their time at University or Technical
to avoid as stumping up with a large deposit may not
Institute. If they then choose to do an OE, then any
be in any one’s best interest and may not encourage
time over six months out of New Zealand means
a bank to lend.
that student loan debt is no longer interest-free and steadily rises even if they or their family have the
1. Good Credit History?
means to pay at least the minimum loan repayment levels set by the Inland Revenue. The result is a more
It’s all about risk and banks need to see that the
substantial debt to repay if they do choose to return
ultimate borrower can save and manage their
to New Zealand. Add to this mix the highly inflated
money. If you hand over the entire deposit, your
housing market across New Zealand has seen many
offspring may not be viewed as a good credit risk. So
first home buyers shut out of the housing market.
firstly, have a conversation around ensuring that your children have a history of saving and paying back
In New Zealand, we see up to 9 out of 10 first home
credit on their cards. The aim is to have them clean
buyers rely on some form of help from the Bank of
up the credit and rein in their smashed avocado and
Mum and Dad, making it New Zealand’s 6th largest
overseas holiday lifestyle.
lender. With two of our offspring having come back from
2. Avoid going in as a Guarantor as it is risky.
their OE and now at an age where they and their friends are now thinking about getting on the
It’s a simple option, and many parents elect to
property ladder, I was chatting to Nigel about our
guarantee their kids first home loan with the bank
various options on helping them and the possible
securing the loan against the parent’s home. The Covisor y Conn ec t Ma gazin e l 7
FAMILY:
downside is that unless you have fixed the amount
the historically low-interest rates being offered
guaranteed, the bank can lend more and you as the
on deposits at present this works as a potential
guarantor are unaware. If your offspring defaults,
investment opportunity for you if you have spare
and yes this does happen, then there is a distinct
capital. In this scenario, we would recommend
possibility that you could lose your own home.
establishing a property sharing agreement before purchasing to ensure that all parties understand
An option to reduce the risk would be to ensure
what the agreement entails.
the guarantee is limited to the minimum amount required. Alternatively, joint lend a portion of the loan,
Some points to note:
which can allow you to control how much exposure you can afford.
3. Co-Buy
i) With the Brightline test sitting at five years if the house is sold within this period, some of the copurchasers could be drawn under the test and need to pay tax on any profit made on their share
Another possibility is for your offspring to join
of the Capital Gain. For first time purchasers,
forces with their siblings and or you and buy a
this is not the case as if they live in the house
house together. Here your kids do not have to
then they are exempt. This applies from day one.
stump up with the entire cost of the house and
Another advantage here is it provides matrimonial
your co-purchasers share in any Capital Gain. With
protection for your ownership share – the in-laws cannot get their hands on it.
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ii) There are possible downsides for the kids if they
The best scenario would be to loan the amount,
do not intend to live in the property as they will
but most banks expect this lump sum to be gifted.
not qualify for a Kiwisaver first home withdrawal
If this is the case, then we would suggest that a
or the Home Start Grant. Further, they will then be
Relationship Property Agreement (RPA) is set up
caught under the 5-year Brightline test as well, as
between your child and their partner for that specific
well as lower loan to value ratios (LVR) as it is now
amount. The RPA only needs to deal with the amount
an investment, so the banks will only allow 60%
gifted to the child and records it as that child’s
debt, not 80%.
separate property; all other assets do not have to be covered by the RPA. The moral of the story is not to
iii) If instead, you have extended your mortgage to
gift until all parties sign the RPA.
finance the deposit or buy into a property with the children you do need to seek legal advice as
Family politics can rear its head as loans and gifts can
to how you should handle this money as it can
create tension in a family, and there is a high chance
quickly turn to quicksand if the child’s relationship
that the loan is not repaid as the children view this
splits or the house becomes subject to a
as their entitlement and an early inheritance. Having
mortgagee sale.
an open conversation with all the family members present can help educate all the family and ensure
iv) Lending rules (lower deposit ratios) can differ if
everyone is reading off the same songbook.
building a new home; therefore, another option would be to jointly buy a section and lend to build.
4. Rentals
Another option, if you are in a position to assist financially assist is rather than helping with the deposit you could offer to pay for some or all of the incidentals that are often overlooked with buying a
Another option open would be for you to buy a rental
house such as conveyancing, moving costs, home
either personally or under the family trust and then
and contents insurance, furniture or a building report.
rent this to your offspring and some flatmates. Ultimately you must be comfortable with what you When your child is in a position financially, they could
decide, and it is essential that you do not compromise
buy the property. This also presents opportunities to
your retirement and security. You don’t want to create
gift all or part of the equity to the child if you can as
division amongst your children, and you definitely do
an early inheritance at a time when the child is more
not want to create a sense of entitlement by stepping
in need of financial assistance.
in too soon. Sometimes its better for all parties for
5. The Red Flag – Divorce
your children to save up for a few years before buying their first home.
If you are in a financially secure position (don’t need
Sally Herbert
this for your retirement) then making a cash gift to
www.covisory.com
push the deposit up to or over the 20% required can
sally@covisory.com
mean the banks offer the optimum mortgage rates and conditions. However, this gift and its intent need protecting from any possible future relationship breakdown.
Covisor y Conn ec t Ma gazin e l 9
GENERAL INTEREST:
Ben Towers:
Entrepreneurship without an age limit
of the UK’s most celebrated young entrepreneurs, admired for his entrepreneurial vigour and innovative spirit, and watched closely in anticipation of his next big idea. Currently, he’s a public speaker leveraging his celebrity to advocate for the potential of young entrepreneurs, and working to lower bureaucratic barriers that stand in their way through his interactions with government officials.
At the age of 11, Ben Towers took on a gig to design a website for a family friend for £50. Finding that he liked the work as well as the pay, he registered on an online freelancing platform and began producing websites on a regular basis. Within two years, he had hired his own full-time freelancers to support him, putting him on the enterprise road. By the age of 16, Towers made use of a legal loophole to leave school in order to run his business. Then, in 2017, at the age of 19, he merged his agency with another digital marketing business for an undisclosed amount, described as “multiple million pounds”, before exiting the business. Today, he’s one
Innovation in youth entrepreneurship When it came to formally start his own business as a young teenager, Towers faced a number of additional bureaucratic hurdles that traditional entrepreneurs are never forced to consider. Because of his age, Towers couldn’t legally pay employees, or devote the necessary time to run a growing business. After all, minors in the UK are legally required to remain in the education system at least part-time until the age of 18. In spirit, these laws are designed to protect children from exploitation, not to prevent them from pursuing entrepreneurship. Towers, however, had no intention of putting his ambitions on hold for half a decade. In order to hire and pay workers, he simply contracted them as full-time freelancers rather than traditional employees. As the business grew, however, he ran into another major issue – school. In order to run his business, Towers needed a way to break out of the UK education system, which monopolised too much of his time. At the age of 16,
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he managed to do so by hiring himself as an
Not only can young people learn professional skills,
apprentice at his own business. What ultimately led
they can also build professional connections, find
to him to his current position as a public advocate
customers, and manage finances entirely online.
for young business people, however, was a mundane
By ensuring that political leaders know that these
banking issue.
resources not only exist, but that young people are
Becoming an advocate
using them, Towers is ensuring that others who share his entrepreneurial attitude will operate legally in an environment that’s prepared for them.
Towers received a call from his bank one day inquiring about the number of transactions on his
What we can learn
bank account. His response that he was running a business nearly brought down his entrepreneurial
Ben Towers didn’t disrupt any industry or develop
ambitions. A child account can’t be used for business
any new products or ways of doing business. He also
purposes, after all, and children can’t legally open a
didn’t scale up to develop a massive business. Instead,
business account. With his assets frozen, Towers was
he built a small but respectable digital marketing
unable to pay his freelancers or to access his hard
agency valued at a few million pounds. Despite
earned money for himself.
that, he’s a groundbreaking innovator who has helped to redefine entrepreneurship in the UK. His
To resolve the issue, he contacted the main branch
actions as a teenager, rather than representing the
of the bank, who had never dealt with such an issue
crowning achievement of his life, stand as a proof of
before. Lacking any precedent, they created an
concept for his business acumen, personal drive, and
exception allowing him to use his child account for
entrepreneurial potential.
business purposes. Later on, Towers would become the first underage person in the UK to ever open a
In Towers’ own words, entrepreneurship isn’t about
business account.
endless preparation and planning, but rather “just
Educating elders
giving it a go”. It certainly has worked for him with politicians as well as prominent investors like Richard Branson keeping a close eye on what he’ll decide to
In 2015, Towers was invited to participate in a
do next.
discussion with top British MPs to discuss the needs of entrepreneurs in the 21st century. Most of the UK’s leaders, and political leaders around the world, are entirely unaware of the extent to which young people are involved in the modern economy, and how
Fifo Capital Business FInance www.fifocapital.com info@fifocapital.com
drastically education has changed compared to their own youth. Using technology, young people with an entrepreneurial mindset have access to educational and business resources that were practically unimaginable half a century ago.
Covisor y Conn ec t Ma gazin e l 11
Moving Opportunities
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INTERNATIONAL TAXATION:
To most people the thought of moving their home from one country to another can be daunting, and often the thoughts around the tax consequences of moving countries can be terrifying. However, with proper planning and advice there can be real opportunities and benefits to be gained. There are several key fundamentals that need to be considered in these situations. 1. Never assume that the new countries tax rules are what you are used to. Always seek advice from a professional and don’t just rely on Google. 2. What will it take to lose the existing tax residency in the country you are departing? 3. What are the implications of losing your existing tax residency? 4. What are the tax residency rules of the country you are moving to? 5. What are the implications of being tax resident in the new country i.e. a.
Does it tax worldwide income or just income from sources in that country?
b. At what value do your existing assets enter that country’s tax base (e.g. in USA it is at historic cost not current market value) 6. What planning opportunities exist?
Below are a selection of examples that highlight some of the areas we have worked on recently.
1. Foreign Trust Distribution Scenario: Mary was a New Zealand Tax Resident and Citizen but had been born in the United Kingdom. Her late father had established a trust for her benefit outside of New Zealand. If the trust had distributed the assets to her, the New Zealand tax impost would be 33% on about 90% of the distribution. The issue Mary decided to return to the UK to work and live and while the UK tax rules were worse than New Zealand’s, through appropriate planning their effect was minimised. Solution Mary left New Zealand, ceasing to be New Zealand tax resident on that day. She then holidayed for a few weeks before arriving in and becoming a resident of the UK. During the interim holiday period, Mary received the distribution of the trust assets and was taxable in neither New Zealand or the UK provided Mary remains non resident of New Zealand for five years.
Obviously, every country’s rules will be different, but the questions should always be the same. International Tax is complex to say the least. However, with appropriate planning and advice, benefits can often be obtained, or at worst the problems minimised.
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2. Leave the Snakes Behind Scenario: John is an Australian, who is married to a New Zealander. They moved to New Zealand from Australia where they had met. John had never been tax resident in New Zealand before so qualified as a transitional tax resident in New
•
Australian sourced income; and
•
Worldwide employment income.
Unlike New Zealand’s transitional tax resident regime, which is for 49 months, the Australian regime is indefinite until either John or his spouse (married or de facto) become Australian citizens or permanent
Zealand.
residents.
This sees him concessionally taxed in New Zealand
4. Double Tax Remains
for his first 49 months in New Zealand on only:
Scenario: Taking example 2 further, after John’s 49-month
•
His New Zealand sourced income;
•
His worldwide employment or services income
New Zealand Transitional tax residency ends,
The real benefit to John was that he could “unload”
Australian company. This Company pays 30%
assets from his Australian discretionary trust, and in doing so capped his Australian income tax liability to 30% on imputed (franked) dividends out of the companies owned by his trust. Ordinarily in Australia
he owns 100 shares in Aus Co Pty Limited, an Australian company tax on its profits of $100 and will then pay John a fully imputed (franked) dividend of $70.
there would have been another 17% tax to pay.
Problem
Moreover, because some of his assets in the trust
New Zealand for the Australian Franking Credit.
had not gone up significantly in value, they could be distributed to him without Australian CGT applying. Once he owned them as a non-resident, he would no longer be subject to CGT in Australia on future increases.
3. Leaving New Zealand Scenario: After the death of his mother, Fred decided to move to Australia for better work opportunities. As a New Zealand citizen, he is treated as a foreign temporary migrant in Australia, and is only taxed in Australia on his:
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Unfortunately, for John he can’t claim a tax credit in
Result As a result, John will pay 33% tax on the $70. His net of tax receipt is $47, and the total tax impost is $53. You can’t win them all.
Nigel Smith www.covisory.com nigel@covisory.com
INTERNATIONAL TAXATION
#we start where others leave off
Risk
Covisory works with absolute privacy. We assess the hidden risks for you.
NIGEL SMITH nigel@covisory.com +64 9 307 1777
www.covisory.com
Covisor y Conn ec t Ma gazin e l 15
BUSINESS
A Risky Business
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BUSINESS:
What is Risk? Many people use the word “risk� to mean loss but in a business context it is not. Risk means that there is a chance that whatever is planned or expected may not occur as planned or expected. Therefore the outcome of risk taking may be better, or it may turn out exactly as planned or expected, or it may be worse than planned or expected. All businesses and services are in the business of taking risk as by doing so they expect and hope to make a profit or get an advantage. Risk taking is actually the sole means by which business is able to make a profit. Therefore, the conscious management of risk-taking should be an essential part of the daily activities and planning of the whole of the management of any organisation, including its Board if it has one. It can, therefore, be argued that the Chief Executive Officer of any organisation (assisted by its Board) is its primary Risk Manager. Indeed we all subconsciously manage exposure to risk in our everyday lives
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Putting Risk into a Historical Context
Today the risk management process involves using
The management of risk-taking started as Risk
risk that an organisation is prepared to pursue, retain
Management. This grew out of the insurance industry in the United States of America after the Second World War and was driven by the desire of insurance buyers to get better value from their insurance buying. However, some form of risk management had existed since the middle ages. In addition, whereas in the early days Risk Management was seen as only applying to the threats from exposure to risk to the hard assets of the business, these days it is seen as applying to all aspects of the management of an organisation and perhaps focusing more on the profitable outcomes from risk-taking. A process was developed to make Risk Management effective and is now encapsulated in various International Standards around the world such as the Australasian one AS/NZS ISO 31000:2009, which was updated in 2018. It was first published in 1995. Like all of these Standards, the purpose of this Standard is to provide principles and generic guidelines on the practice of risk management in New Zealand and Australia. ISO 31000 seeks to provide a universally recognised paradigm for practitioners and organisations employing risk management processes to replace the myriad of existing standards, methodologies and paradigms that differed between industries, subject matters and regions.
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common sense to determine the amount and type of or take on a continuing basis. This is sometimes referred to as Enterprise Risk Management or the management of risk. The insurers have taken this on board in respect of the hard assets of organisations and now strongly encouraged all insured organisations to undertake risk management on a continuing basis because it helps reduce the amount that is paid out by the insurance industry in any year. Needless to say, insurers only focus on the loss side of the equation completely overlooking the profitable side of risktaking other than of course, in respect of their own in house operations.
So how does the management of risk work? Firstly the context in which risk management is to be applied is established, then the likely effects of possible upside and downsides (exposures) are identified to see if a significant profit or loss could eventuate from that exposure and from this determine what the organisation needs to avoid, minimise or for which finance needs to be arranged. Having worked through this part of the process, the organisation needs to decide, taking into account the current financial situation of the organisation,
BUSINESS:
whether or not the exposure (often referred to as the
if something went wrong. However, a digger came
risk) can effectively be minimised at a reasonable
along and scuppered their plans. Both telecoms
cost. If the maximum possible loss cannot be covered
providers had used the same ducting from the street
by the organisation’s finances, then consideration
into the business’s call centre. The telephone lines
should be given to see if it is possible to organise
were restored four hours and many millions later...
suitable external financial arrangements such as a
they had a contingency plan, but it didn’t work! An
bank loan or insurance at a reasonable cost. If neither
example of risk management measures not working.
of the options are viable, then the organisation should consider changing direction and avoiding the
Another example of business continuity plans going
particular exposure to risk.
wrong was when a digger hit a high-pressure gas
Success or Failure?
main, it didn’t burst, but it was severely damaged, and with that came the fear that it might go up at any moment. Offices of more than sixty companies
Many businesses around the world are successfully
were evacuated for more than a day, with total losses
taking risk and making a profit such as the company
in the millions. Everybody blamed the digger, but few
that developed a way to make rockets cheaply
blamed their business continuity plans.
and to use them to launch satellites into space for international clients. This company takes risks on not only producing sophisticated working rockets but also on the high-level weather.
Shaun Wilkinson Author + Consultant in Managing Risk Exposures
Conversely, there was a business whose telephone lines were its life lines. They are a trading company that would lose millions every hour if their phone and data lines went down. They had done what was eminently sensible - they had service contracts with two telecoms providers, and they had undertaken risk management which amongst other things involved the production of a contingency (or business continuity) plan that described what to do Covisory regularly works with our clients to effectively manage their risk exposure. Call Nigelec tot start a in e l 19 Covisor y Conn Ma gaz conversation.
COVISORY:
Meet the Team As part of Covisory Connect over the next few issues, we will be highlighting members of the Covisory team and find out what they do outside of the Covisory family.
Marcus Diprose
anyone is looking for a good coffee recommendation, if you find yourself somewhere new, give him a call. Active Timing has also taken him to Australia, Korea, Tahiti, and South Africa for work. Highlights include a lot of 4WD in different parts of New Zealand and the odd event where timing equipment can only be installed using helicopters. With Active Timing, Marcus understands the pressure
First up is Marcus Diprose, who runs the trust side of
and stresses that go with running your own business.
the Covisory business.
The biggest lesson he has learned is the importance of planning a long way in advance to ensure work
Marcus is the only member of the wider Covisory
goes smoothly. Preparation is the key.
team to be based in the South Island, living in Christchurch with his family. His wife works for Meridian Energy as a project manager, managing
The Diprose Family
hydro schemes, and both kids are at primary school. Outside work, Marcus is involved in a number of activities and through summer can be found water skiing and in winter snow skiing. Being so close to the ski fields during winter, the call of the snow has meant a few weekday skiing missions do happen! Personally, Marcus has competed in several sports, including running, multisport and adventure racing. He now spends time with his family orienteering and tramping, and the family recently completed the Abel Tasman Track. In addition to his involvement in Covisory, Marcus also owns another business – Active Timing – which he has run for 12 years. Active Timing provides timing and results to sports events in New Zealand and overseas from large mass participation events like the Air New Zealand Queenstown International Marathon to the Kathmandu Coast to Coast. This business takes Marcus and his team all over New Zealand, so if
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Active Timing on the Keplar Challenge
OPINION:
Tech Corner GST Claims on Land Purchases
The compulsory zero rating of land transactions between registered parties has reduced the number of situations where GST can be claimed as an input tax deduction on land purchases. However, GST can be claimed on the purchase of land where it is considered the purchase of a second hand good. To qualify for a second hand goods input; -
The land needs to have one or more previous owners;
-
The land is in New Zealand;
-
The supply is non-taxable;
-
The supply is by way of sale (rather than a gift or a lease);
-
Payment is made for the supply in the taxable period where the
credit is claimed; &
-
The purchaser is registered for GST.
However, where the vendor and the purchaser are associated, the amount of the deduction is limited to the lesser of: -
The GST component (if any) included in the original cost of the
goods to the supplier;
-
3/23 of the purchase price; or
-
3/23 of the (GST inclusive) open market value.
The lowest amount is likely to be GST component of the original cost of the goods to the vendor. If a credit is claimed in this situation, it will be important to obtain evidence of the original cost of the land to the vendor.
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Cruising the Med
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LIFESTYLE:
Reviewing the luxury cruise lines of the mediterranean If you’re planning a European holiday, a
the ship - Mediterranean shore excursions that are
Mediterranean cruise itinerary answers some
well organised, immersive and authentic.
common questions: “Where should I go? How do I get from one city to the next? Where should I stay?”
We aim to cover the size of the ships that each
One of the only remaining questions then is quality -
luxury cruise line operates. Luxury cruise lines
the standard of accommodation, cuisine and service
generally operate small to medium sized vessels
you expect. Here we explore the luxury cruise lines
that have a more intimate onboard feel and have
of the Mediterranean and give you some insight into
the flexibility to explore where the mega ships
why a cruise holiday may be right for you.
cannot. To give you a sense of scale you can compare each ship to the world’s largest ship in 2019
Like returning to a boutique hotel where you’re
- Royal Caribbean’s Symphony of the Seas which can
greeted by name, the staff feel like old friends, and
accommodate 6,700 guests.
your drink is known as “the usual”, luxury cruise lines aim to take service and experience in the
Here are six of our favourite luxury cruise lines in the
Mediterranean to an exceptional level. Some of the
Mediterranean to help you choose your ultimate
true magic happens when you leave the comfort of
cruise holiday.
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1. SEABOURN
interior design by hospitality design icon Adam D. Tihany; Sir Tim Rice (exclusive entertainment on selected ships) and Seabourn Conversations: onboard presentations by featured speakers such as Jeffery Archer, Ambassador Ashok Sajjanhar and Steve Wozniak (please note these speakers differ by ship, itinerary and year). In New Zealand, Seabourn is represented by one of Fine Travel’s key partners, so we can answer any specific questions you may have, or even
Seabourn prides itself on “intuitive service”. Before each voyage the crew invest time learning up to 80
set up a meeting for you to speak directly to the representative.
guest names and tipping is neither required, nor expected. In the Mediterranean Seabourn operates four luxury ships: Encore (300 suites), Odyssey (229
2. SILVERSEA CRUISES
suites), Ovation (300 suites) and Quest (229 suites). The onboard atmosphere is more casual than formal while still maintaining a quality experience. Seabourn’s restaurants are guided by Chef Thomas Keller (the first and only American chef to hold multiple 3 Michelin star ratings) and Seabourn is a member of Chaîne des Rôtisseurs (one of the world’s most prestigious gastronomic societies devoted to the art of fine dining). Complimentary fine wines are poured with lunch and dinner, and there is never an extra charge for any dining choice. Seabourn’s Mediterranean shore excursions incorporate its partnership with UNESCO resulting in truly remarkable opportunities, such as the Amalfi & Positano: A UNESCO Partner Tour. Separately you can explore excursions with enticing names such as “a walk-through Santa Cruz, wine tasting and cigar craftsmanship”. Other Seabourn partnerships include Dr. Andrew Weil (Seabourn’s onboard Mindful Living Program);
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One of the most frequent responses we hear from clients who learn that their Silversea cruise will include a dedicated butler (with white gloves) is a whispered: “I’m not sure what I’d do with a butler...” The aim of this exceptional level of service is not to create a voyage of awkward silences or brainstorming sessions on “what can we ask the butler to do today?”, but for your onboard experience to be
LIFESTYLE:
seamless as you relax, knowing that everything will
“It’s All Included*”. These three words are at the heart
be taken care of (you’ll be looking for him when you
of the Regent Seven Seas luxury cruise experience.
get home).
Unlimited shore excursions (specific shore excursions are included with options to pay to join alternatives);
In the Mediterranean, Silversea operates five ships:
2-or 3-night land programmes (for a more immersive
Silver Moon (596 guests from 2020), Silver Shadow
experience); a 1-night pre-cruise hotel package (for
(388 guests), Silver Spirit (608 guests), Silver Whisper
Concierge Suites and above); Unlimited beverages;
(388 guests) and Silver Wind (298 guests). The
Open bars, lounges and the in-suite mini bar; Pre-
onboard style leans towards the traditional, elegant
paid gratuities (additional tips are not expected);
and formal. Formal nights are included in the
Specialty restaurants; WIFI (one log in and device
program, clothing suggestions are provided to allow
per suite and more for Concierge Suites and above).
guests to pack accordingly (for example a jacket for
Although there are some exclusions (the casino isn’t
gentlemen).
free for example) the aim is for you to step onboard and feel like everything is at your disposal.
In addition to impeccable service, you’ll also wake up to stunning views of the Mediterranean, guaranteed.
In the Mediterranean, Regent Seven Seas operates
All Silversea suites are oceanview suites and many
Seven Seas Explorer (750 guests), Seven Seas Mariner
have a private teak veranda. Personalisation allows
(700 guests), Seven Seas Splendor (750 guests), Seven
you to make choices as to toiletries and personalised
Seas Voyager (700 guests). While still more formal
stationery to a bar with your favourite wines and
than some cruise lines, Regent Seven Seas aims for a
spirits.
“country club casual” approach - what we may call in New Zealand “smart casual”.
With its Italian heritage, the Silversea cuisine is a high priority. From the main dining room (“The
Regent Seven Seas takes a step beyond preparing
Restaurant”) through to speciality restaurants (which
exquisite meals for their guests through its Culinary
may attract a reservation fee) Silversea offers regional
Arts Kitchen Classes onboard Seven Seas Splendor
options (French fine dining and Asian flare) through
and Seven Seas Explorer. For a minimal additional
to pizzerias and seafood.
cost, guests can learn the secrets of Argentine grilling, master different techniques for cooking fish,
3. REGENT SEVEN SEAS
indulge in La Technique Francaise and much more. *Subject to Regent Seven Seas terms and conditions. Inclusions may change without notice. Please check with Fine Travel before booking your Regent Seven Seas cruise.
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4. VIKING OCEAN CRUISES
5. CRYSTAL CRUISES With South Pacific itineraries that include New Zealand, Crystal’s ships are now a more familiar sight around our ports. It is a brand that immediately brings to mind images of luxury and Crystal’s Mediterranean itineraries do not disappoint. In the Mediterranean, Crystal Cruises operates two ships: Crystal Serenity (980 guests) and Crystal Symphony (848 guests) and a yacht, the Crystal Esprit (62 guests in 31 suites). The two ocean ships are larger than the others we reviewed, but they still boast
Viking’s prides itself on being the “Thinking Person’s
one of the highest staff-to-guest ratios and six-star
Cruise”. This unique angle focuses on three elements:
service.
Before you go (access to online filmography, reading recommendations and cultural profiles); On Board
Crystal Esprit offers a unique cruise experience in the
(from a thoughtfully curated shipwide library, guest
Mediterranean. Closer in design to a super yacht that
lecturers, Viking Resident Historian, cooking classes
a cruise ship, the Crystal Esprit explores and island
and wine tastings with the sommelier); On Shore
hops from one boutique port of call to the next. At
(iconic destinations complimented with behind the
nearly every port of call, guests can choose from one
scenes privileged access in places otherwise difficult
of two styles of shore excursion - an active adventure
to visit).
or a cultural exploration.
In the Mediterranean Viking operates Viking Jupiter
Looking for a little intellectual stimulation as you
(930 guests); Viking Sea (930 guests); Viking Sky (930
cruise between Mediterranean ports? Crystal
guests); Viking Star (930 guests); Viking Sun (930
Cruise offers an impressive onboard enrichment
guests). With its Norwegian heritage each ship offers
programme which regularly features well-known
serene Scandinavian spaces - elegant and light filled. What will appeal to many potential guests is that Viking is upfront about “what it is not”, explicitly stating that they do not try to be all things to all people. Some of their specific exclusions: Children under 18, Casinos, art auctions, formal nights, butlers and white gloves, charges for WIFI and more.
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LIFESTYLE:
authors, politicians and other experts in addition
This German cruise line is working hard to increase
to a dedicated bridge lounge, library and creative
its appeal to English speaking passengers by making
learning centre. Crystal also makes a point of hiring
potential guests aware of the level of excellence in
exceptional performers, from talented musicians
design and service that one might have come to
to Broadway singers to ballroom dancers. The
expect from other well-known German brands (such
entertainment onboard Crystal ships rivals many land
as Mercedes-Benz).
establishments. Hapag Lloyd will appeal to experienced cruise clients Shore excursions are offered through Crystal’s
who are looking for an exceptional “no expense
Mediterranean itineraries providing the opportunity
spared, nothing is too much trouble” onboard
to step ashore and experience local cultures and
experience that few in New Zealand will have tried.
cuisine. The atmosphere onboard is more formal, with a suggested dress code for evening attire. Black
The right luxury cruise line for you may come down
tie optional evenings provide the opportunity to dust
to several considerations. Sometimes you have
of the tuxedo or cocktail dress.
specific Mediterranean ports in mind and the Fine Travel team will work with you, the cruise line and
6. HAPAG-LLOYD
our wholesale partners to find the itinerary that suits. Alternatively, you may have a strong relationship with a specific cruise line and will only look at those itineraries. Once we have worked with our clients to find the itinerary and cruise line they are happy with (or they come to us with the itinerary they have chosen through their own research), we work with the cruise line, their representatives in New Zealand or our wholesale partners. If your travel plans include a Cruise in the Mediterranean, consider allowing the team at Fine Travel to arrange everything to make your holiday an
Hapag Lloyd may be a name you have heard but
amazing experience.
cannot immediately place - it will come to you the next time you drive past a port and see a shipping container. Although best known for commercial shipping, Hapag Lloyd surprises in the Mediterranean with the luxurious cruise ship the Europa 2. Fine Travel is a client of Covisory Finetravel.co.nz Covisor y Conn ec t Ma gazin e l 27 cruises@finetravel.co.nz
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