Tax on forex?

[skiman]

Hi everyone,

Would any one be able to advise whether growth in a forex trading account derived from being traded by a managed fund would be taxable to a NZ resident. It is a small side investment/ hobby and the primary income is a salary.

Also, if it is taxable, are expenses claimable such as power and depreciation of computer.
Also, does anyone know of an accountant in NZ who has dealt with such a situation before as most appear to not have a clue.
Many thanks

[Harvey Specter]

taxable

probably hard to claim expenses - unless you have a dedicated set up.

[Jay]

I understood the FX account has to have a substantial balance before and FX gain is classified as income.

[Harvey Specter]

I understood the FX account has to have a substantial balance before and FX gain is classified as income.hes trading so would be caught by multiple tests. Different if you have just a FX account for buy and hold. Having said that, I dont think there is a de-minimus, its just that most just ignore it, including IRD, and gains are probably offset by losses. HTere are threasholds where by you are taxed on a realised or unrealised basis.

[skiman]

Thanks for the replies guys. Harvey, is there anywhere I can read about the thresholds? Or alternatively does anyone know of a good tax accountant who is aware of such matters. Thanks

[Harvey Specter]

Search for 'cash basis person'.

A couple of articles came up, both by CA's:

http://www.interest.co.nz/opinion/72887/terry-baucher-says-financial-arrangements-regime-means-falling-dollar-might-mean-risin
http://gibsonca.co.nz/newsletters/news_archives/july_2011_newsletter_2_-_financial_rules__imputation_credits__overseas_inc ome_and_income_attribution