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Tower Investments has suspended withdrawals from its Tower FuturePlan Property Fund while it seeks confirmation that the performance of an underlying investment vehicle is not too good to be true.
Investors who have requested withdrawals from the fund have received a letter from Tower saying payments have been temporarily delayed.
FuturePlan funds are invested via the wholesale Tower Property Fund, which itself has been closed pending confirmation that "significant capital gains" from the sale of properties including a half share in Mt Maunganui's Bayfair mall are non-taxable.
The fund and its trustee are waiting on a ruling from Inland Revenue, not expected until relevant legislation which should happen in November, said Tower's Tony Hildyard.
"If people take their money out there is a risk that the people that stay in the fund will carry the tax burden if the legislation isn't passed.
"It's not a liquidity issue, we've got heaps of cash sitting there, but we've got to wait for the issue to be resolved."
