Originally Posted by
Vaygor1
Hi iKiwi.
It's always up to each individual but for me, I keep away from Australian stocks for 2 primary reasons. The 1st one is dividend is related only. The 2nd is dividend and gains related.
1) If the Oz company paying the dividend pays it out fully franked, then you have paid your tax to the Aussy govt. When it goes into your account in NZ (assuming you don't have an Aussy broker and security account) then guess what.. NZ taxes you again. The two countries have never knocked their heads together to sort this out and the situation is ridiculous.
2) Exchange rate risk. Why take it? Unless you plan on retiring in Australia you will want to bring your money back one day. You might win on Forex or you might lose. For me, there are plenty of opportunities in NZ. If I can remove a risk then I remove it. Forex is one of those risks.
I am not a trader. I am new to this forum but I have been doing exceedingly well (even if I might humbly say so myself) on the share-market for over 15 years. Never had a bad year, and unless forced to via a takeover or acquisition, I have hardly ever sold a share. My last sell was about 4 years ago, and a trifling amount. Taxation on Capital Gains depends a lot on your intent and your history of selling what you buy in a short or long timeframe. The tax department have a hard time proving intent but they can easily prove your actions and history of buying and selling. In all this, there are large grey areas but if you step out of the grey, or spend too long in it, then tax you will pay.
My capital gains are truly tax free because my intent is clear, consistent, and proven by my actions.
I hope this helps, and if you want I can throw you a couple of examples.
Regards,
Vaygor1.