Harmoney

[Harvey Specter]

Until Harmoney says otherwise, I agree with you. However there could be a possibility that since the typical individual invests in perhaps hundreds of "notes" each of which is ascribed by Harmoney a default risk percentage, then the "charge-offs" are an "anticipated cost" of the individuals investment in Harmoney notes (in the same way as service charges) and not an unanticipated capital loss. I imagine that is why Harmoney is seeking (so they have said) a ruling from the IRD.

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.

[Saamee]

Did any body else notice that their RAR rate changed over night on Monday? Mine edged down 0.5%...

[Finite]

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.

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?

[mjplost]

Is there any way to clean up fully paid loans off the loans sheet? Or do they disappear after a set period of time?

[Harvey Specter]

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?

I use a company that only does investing. Mainly shares but I dont see the need for it to be a specialist loan investing company.

I assume you use different entities for the farming and tourism or just all bundled into one?

[Finite]

I assume you use different entities for the farming and tourism or just all bundled into one?

No, one entity - a partnership with my spouse.

[Bjauck]

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.

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.

[777]

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.

Tax is a personal responsibility Not Harmoney's. Why do you expect them to do your work? The service charge IS an expense against earning income, therefore deductible. The charge-offs are capital losses.

[Finite]

Tax is a personal responsibility Not Harmoney's. Why do you expect them to do your work? The service charge IS an expense against earning income, therefore deductible. The charge-offs are capital losses.

If this is so (and you seem very convinced that it is) then why does Harmoney not allow for this in their tax witholdings?
There must be a reason for it

[Bjauck]

Tax is a personal responsibility Not Harmoney's. Why do you expect them to do your work? The service charge IS an expense against earning income, therefore deductible. The charge-offs are capital losses.

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.