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Last edited by t.rexjr; 27-08-2018 at 10:42 AM.
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“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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Originally Posted by Gringo
Does anyone know if you can claim travel expenses to an AGM as an income-focused share investor (not a trader), like you can travel to inspect a rental property?
I believe you can in Australia, as long as the company pays a dividend.
Thanks
Not a lot of information to go on but I would opine that the trader/investor distinction isn't the important factor. The main question is are you in the business of share investing. Obviously you have an investment or you would not be invited to the AGM but are you in the "business" of investing? To claim expenses for income tax purposes you need to be in "business" which depends on many factors such as the extent of the activity undertaken and the likelihood of making a profit. For example if you have a $10,000 investment in a UK company and you want to fly to the UK for the AGM I would suggest the airfares and hotel costs would not be deductible.
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Moderated user
Originally Posted by Aaron
Not a lot of information to go on but I would opine that the trader/investor distinction isn't the important factor. The main question is are you in the business of share investing. Obviously you have an investment or you would not be invited to the AGM but are you in the "business" of investing? To claim expenses for income tax purposes you need to be in "business" which depends on many factors such as the extent of the activity undertaken and the likelihood of making a profit. For example if you have a $10,000 investment in a UK company and you want to fly to the UK for the AGM I would suggest the airfares and hotel costs would not be deductible.
Thanks Aaron. That makes sense. Would like to find where the exact guidelines are on the IRD website, but no joy there. Might need to visit Mr CPA...
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Originally Posted by Gringo
Thanks Aaron. That makes sense. Would like to find where the exact guidelines are on the IRD website, but no joy there. Might need to visit Mr CPA...
Like many tax laws I don't think there are clear guidelines. There are a number of cases that have gone to court where the issue is discussed that will give some guidance but I think there is some grey area. If you have a lot invested in a number of companies and you spend a significant amount of time researching and monitoring your investments and you make a profit after expenses you are more likely to be in business, but like Winner69 says best to get your advice from an expert.
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I would have thought that if you are going to claim your expenses to go to the AGM then you would have to declare the profit if/when sold as well, as you are claiming an expense to derive income, so you must declare that income, not sure if declaring just the Dividend would suffice.
Not advice just logic (to a degree) but I would check with an accountant or you could ring the IRD and put a hypothetical scenario to them, they may give you a straight answer or a "it depends" depends on what and see if it applies??
You can still ring them anonymously I think.
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Originally Posted by Jay
I would have thought that if you are going to claim your expenses to go to the AGM then you would have to declare the profit if/when sold as well, as you are claiming an expense to derive income, so you must declare that income, not sure if declaring just the Dividend would suffice.
Not advice just logic (to a degree) but I would check with an accountant or you could ring the IRD and put a hypothetical scenario to them, they may give you a straight answer or a "it depends" depends on what and see if it applies??
You can still ring them anonymously I think.
I would have thought it would depend what business you are in. The business of investing long term for dividend income or trading shares for profit. Whether people are investors or traders often seems to depend on if the markets are going up or down as a long term investor can't claim a capital loss if their investment goes down in value and a trader has to pay tax on increases that would be considered capital gains and non-taxable for the long term investor. You need to know what business you are in before you can correctly calculate taxable profits and losses and what expenses you can claim. You can probably split these activities but there are a million threads on this site discussing that issue no need to rehash it.
P.S. just in case it is not obvious my statement re the market up or down and trader or investor distinction is a light hearted dig at all the bull**** artists of this world. No one on this site of course.
Last edited by Aaron; 27-08-2018 at 05:14 PM.
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Question, when trading Aus shares do people convert each trade back to NZ$ or at the end of the tax year and therefore go I made $100AuD avge rate was 0.9 for year (can get this from the IRD site I think) so profit was $1.11 for the year for my Aussie shares?
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Originally Posted by Jay
Question, when trading Aus shares do people convert each trade back to NZ$ or at the end of the tax year and therefore go I made $100AuD avge rate was 0.9 for year (can get this from the IRD site I think) so profit was $1.11 for the year for my Aussie shares?
You can use IRD mid month/ end of month or rolling avg rates, or just square things up weekly using OFX rates.
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Rights issues (Below is a blurb from an IRD publication)
Companies can offer their shareholders rights to buy new shares, generally at a discount to the market value.
Legislative changes have been made to make it clear that the discounted amount is not a taxable dividend for shareholders that exercise the right, and that the right itself (which has value and may in some cases be traded or renounced) is not a taxable dividend.
The policy rationale for ensuring that rights and discounted shares issued under a rights issue are not treated as dividends is that the company does not give up anything of value. A rights issue involves the company raising new equity when the shareholders invest new funds in the company.
So the discount is not a taxable dividend from the company and the right itself is NOT a taxable dividend therefore if you sell the right, I guess this means the proceeds from the sale of the rights is also not a dividend? (or taxable income) for that matter.
Does anyone have any information on this or have experience with the IRD regarding proceeds from selling rights and whether it is taxable?
Tried a search but nothing came up.
Specifically someone asked me about the AIR NZ rights issue which must have had some value on the secondary market.
Another blurb I found was that "the issue of shares at a discount is not a dividend if the person subscribes for shares under the right, provided the company does not, as part of the rights issue, give the person the right to dispose of the shares back to the company"
This blurb does not relate to the sale of the right to a third party so not much help.
Last edited by Aaron; 08-11-2022 at 09:20 AM.
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