need to be in the business of investing which most individuals wouldn't be. If you invest through an investment co, then it is arguable.
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Did any body else notice that their RAR rate changed over night on Monday? Mine edged down 0.5%...
This seems to be the essence of it.
How does one prove to the IRD that you are in the business of investing.
I'm in business doing many things (farming, tourism etc) - can't I just add investing to the list - how about "Money Lending" as a business description?
Is there any way to clean up fully paid loans off the loans sheet? Or do they disappear after a set period of time?
It needs a decision on whether or not the service charges and charge-offs are deductible for individuals and whether they are definitely deductible for investment businesses. I think that is why Harmoney needs to press the IRD to get a ruling. I think an argument could be made that charge-offs are an inevitable cost of earning the taxable income from the Harmoney notes whether you are an individual portfolio investor or not. Professional advice is necessary.
NZ Income Tax can act as a capital gains tax and sometimes simply a capital tax. With financial arrangements, NZ income tax can be applied to what many would understand to be capital profit/loss .
Harmoney is already seeking a ruling from the IRD. Companies often seek rulings from the IRD on tax implications, to their shareholders or investors, of proposed actions or payments. It saves their investors and their expensive tax accountants having to duplicate research into the tax consequences. I am surprised that Harmoney have not already obtained such a ruling on service charges and charge-offs for the various types of investors.