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  1. #61
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    Quote Originally Posted by traineeinvestor View Post
    FWIW, there is a list of the Austrian CGT exemptions here: https://www.ato.gov.au/general/capit...nd-exemptions/

    Thanks for that.

    Having rolled around the ATO website for a while, I'm not convinced that the New Zealand IRD would have the capacity or capability to administer such a system.

  2. #62
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    Quote Originally Posted by GTM 3442 View Post
    Thanks for that.

    Having rolled around the ATO website for a while, I'm not convinced that the New Zealand IRD would have the capacity or capability to administer such a system.
    Which wouldn't stop our current political overlords enacting it.

  3. #63
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    Quote Originally Posted by traineeinvestor View Post
    Which wouldn't stop our current political overlords enacting it.
    And then having to explain it to my accountant! I think I'd just go bush somewhere up Lambton Quay and shoot policy analysts for food.

  4. #64
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    Quote Originally Posted by blackcap View Post
    Yes very well positioned. Well done.

    What they probably would want to do is take the combined asset value of $840k +270k which adds up to $1,110k and tax you on the 110k profit. But that is hard enough to administer.

    Spare a thought for the poor investors in The Netherlands where I have lived for a while. They take your end of year 1 position of $840k + $270k = $1,110k and just tax you 4% of the $1,110k. This happens every year. Very badly positioned.
    In the Netherlands it used to be that they also tax you for rental income even if you owned your own house freehold. So if your house could get rent of $500 per week over 52 weeks that’s $26,000 multiply that by whatever tax bracket you are in ie New Zealand 33% is the highest it would be $7,878 in tax you would need to pay from your home. They all tended to keep their mortgage high to offset this.
    They love their taxes in Europe

  5. #65
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    Quote Originally Posted by Ggcc View Post
    In the Netherlands it used to be that they also tax you for rental income even if you owned your own house freehold. So if your house could get rent of $500 per week over 52 weeks that’s $26,000 multiply that by whatever tax bracket you are in ie New Zealand 33% is the highest it would be $7,878 in tax you would need to pay from your home. They all tended to keep their mortgage high to offset this.
    They love their taxes in Europe
    Isn't that what Gareth Morgan / TOPS party was proposing ? Or close to it ?

  6. #66
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    Quote Originally Posted by traineeinvestor View Post
    This is one of the reasons why CGTs generally raise less revenue than politicians predict - people stick with their winners and sell their losers.

    At the end of the day, CGT is primarily a tax on: retained after tax earnings reinvested in the business which creates share price growth (i.e. double taxation) and inflation (i.e. a tax on gains which are not real). Alongside estate duty and wealth taxes, it is the least fair and rational means of generating tax revenue available.
    Assets have to be sold or disposed of eventually - even if by the trustees/administrators of your estate. So there will be some lag before revenue is raised.

    Income tax brackets should also be adjusted annually for bracket creep due to inflation and there should also be an inflation allowance for the income from fixed interest deposits and bonds.

  7. #67
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    Quote Originally Posted by RTM View Post
    Isn't that what Gareth Morgan / TOPS party was proposing ? Or close to it ?
    Something like it....imputed rent on owner occupied housing (taking into account maintenance and rates etc costs). It made the party unelectable but many economists agree that it makes sense.

    In NZ If you invest you money in a business you are taxed on the services, income and profit it produces (and maybe later also the Capital gains due to inflation and its success.) However if you invest your money in a house that provides you with a valuable service of providing accommodation it is tax exempt and the capital gains are also untaxed. So it is tax efficient, for those who can afford it, to invest your money in (non taxable income producing) owner occupied residential property.

  8. #68
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    Quote Originally Posted by percy View Post
    How am I going?.
    I have $1mil at start of the tax year,
    I buy 10 stocks at 100k each.
    7 of those stocks go up 20%. so I have $840k of winners,which I hang into going into year 2.
    3 of those stocks 10 stocks go down 10%,so I sell.So I have $270k,so claim $30k of losses.No tax to pay.
    Year 2,my 7 winners go up another 20%,so $840k is now $1.008.
    The 3 new stocks I brought using the $270k [ie $90k each] have had a mixed year.
    One tripled to $270k,one went up 25% to $112.5k,while the third went down 20%[to $72k] so I sold and claimed $18k loss.
    So the portfolio is now $1,462,500.and no tax has been paid,yet I have claimed $48k losses.
    The next three years I did not buy or sell anything and the portfolio doubled,so now worth $2,925,000.Still no capital gain tax paid?
    "Well positioned".?

    This is why the TWG is also considering an alternative method, similar to FIF on foreign shares but applying to all shares.

    In this CGT scenario, IRD tax would you 5% of your total share portfoilio value at the beginning of every tax year, regardless of your portfolio changes/transactions over that year.

    Extrapolating from your example:
    year 1 = $0 (assuming you had no share investments at start of y1),
    year 2 = taxed on $50,000 ->$16,500 income tax to pay if you're on 33% tax rate
    year 3 = taxed on $73,125 -> $24,131 income tax to pay if you're on 33% tax rate
    year 4 = taxed on $146,250 -> $48,262 income tax to pay if you're on 33% tax rate

    Would make share investment quite unattractive.

    It would be a horrid choice: would create havoc with kiwisaver, an exodus of share investment by NZ'ers, reduction in companies listing in NZ, and an increase in consumer spending (why bother saving?).
    Last edited by Jonboyz; 21-09-2018 at 07:29 AM.

  9. #69
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    Quote Originally Posted by Ggcc View Post
    ...
    They love their taxes in Europe
    Universal medical care, social welfare and a modern infrastructure costs money.

  10. #70
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    Quote Originally Posted by Jonboyz View Post
    This is why the TWG is also considering an alternative method, similar to FIF on foreign shares but applying to all shares.

    In this CGT scenario, IRD tax would you 5% of your total share portfoilio value at the beginning of every tax year, regardless of your portfolio changes/transactions over that year.

    Extrapolating from your example:
    year 1 = $0 (assuming you had no share investments at start of y1),
    year 2 = taxed on $50,000 ->$16,500 income tax to pay if you're on 33% tax rate
    year 3 = taxed on $73,125 -> $24,131 income tax to pay if you're on 33% tax rate
    year 4 = taxed on $146,250 -> $48,262 income tax to pay if you're on 33% tax rate

    Would make share investment quite unattractive.

    It would be a horrid choice: would create havoc with kiwisaver, an exodus of share investment by NZ'ers, reduction in companies listing in NZ, and an increase in consumer spending (why bother saving?).
    The deemed dividend rate is 5%. Some NZ companies pay more than that in dividends. Also I think under FIF scheme In years when your portfolio drops in value by more than your dividends then you tax bill is zero.

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