Thanks again... It appears that intention is the key point. I think the fact that i have held the shares for over 3 years and am now planning to sell some to pay off some of the mortgage means i am not classed as a trader. Thank god for no CGT!!
Munst.
Thanks again... It appears that intention is the key point. I think the fact that i have held the shares for over 3 years and am now planning to sell some to pay off some of the mortgage means i am not classed as a trader. Thank god for no CGT!!
Munst.
Munster in your situation I wouldn't even give paying tax a second thought as you have no obligation to,cheers
KW IMHO your onto it mate and my study and research puts me in your camp absolutely,there's a PhD student at AUT who published a comprehensive paper on Share trading and tax in NZ and the history of court cases etc ( Don't have the link) but that papers a must read to make you realize how messed up and Grey the current system is and the application of tax law in regard to share trading
Its probably the paper that I published the link to above :-)
There is nothing wrong with the law being a bit grey - as this means that you can play it to your advantage. At present, so long as you know what to say and do, you can easily prove that you don't have to pay tax. After all, its very difficult for the taxman to try and prove that what you were thinking at the time is different from what you say you were thinking :-)
I'd rather confusion than the Australian approach which is to tax everyone and everything - no discretion at all.
Agreed,looking at Aussie tax law other than the blanket CGT it appears quite a rigorous test is applied before they will accept you as a legitimate trader and able to claim losses
But isnt it the intent and purpose of buying stocks to make a profit? I know dividends are declared and that makes sense, but no one buys shares to lose money.
"Gold is money, everything else is credit"- J.P. Morgan
This is an argument that will continue until we have a comprehensive capital gains tax (no exclusions even for your own home).
Prior to 1987 everyone was investing long term in the sharemarket, post Oct 1987 a lot of investors actually realised they were traders and their losses were deductible. There were some tax cases but I don't remember their names. Prior to the GFC people were buying coastal sections to build a holiday home (or two) post GFC they were speculating on land. Bond investors became bond traders after the finance company debacle although the rules were pretty specific I do recall hearing about an old dog on this site slipping some debenture losses through his income tax return.
Time to stop the bull**** and putting normally honest NZ citizens in a situation were they feel compelled to lie for personal gain. After the next big slump in asset values the govt of the day should bring in a capital gains tax.
This is an argument that will continue until we have a comprehensive capital gains tax (no exclusions even for your own home).
Prior to 1987 everyone was investing long term in the sharemarket, post Oct 1987 a lot of investors actually realised they were traders and their losses were deductible. There were some tax cases but I don't remember their names. Prior to the GFC people were buying coastal sections to build a holiday home (or two) post GFC they were speculating on land. Bond investors became bond traders after the finance company debacle although the rules were pretty specific I do recall hearing about an old dog on this site slipping some debenture losses through his income tax return.
Time to stop the bull**** and putting normally honest NZ citizens in a situation were they feel compelled to lie for personal gain. After the next big slump in asset values the govt of the day should bring in a capital gains tax.
Agreed Aaron this is the only clear solution in principle(True family home excluded) where everyone knows where they stand as long as the CGT is set at a lower rate than the top tax rate like15% for example otherwise non compliance will still be an issue,in some countries if you hold the investment for longer than a year you pay a reduced rate of tax on profits as opposed to short term holders,an idea I like
On a similar note and maybe a nob question, just can't think at the moment , how do you normally treat the following scenario (Treated as a trader (individual) and filing tax returns declaring profits and losses)
You buy shares in XYZ in several tranches - e.g 1000 @ $5.00, another $500 @ 4.00 and another 500 @ 4.50
You then decide to sell say 750 and get $4.45 for them. The rest you do not sell until the following financial year
What do you declare as your cost of the shares/ on your tax return; do you: a) Base on the average price overall
b) Treat each transaction separately
c) as above usng FIFO basis
d) doesn't make any difference
e) something else - who cares all works out the same in the end??
I have never done this so far in my Trading history - Only ever sold all at once and therefore used the total cost as a basis.
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Originally Posted by MunsterNZ
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