Income tax on trading

[Interested_Party]

Tax question related to selling equities.

Here goes. Elderly relative has a significant Australian equity position. I have to deal with all her paperwork as she has more or less gone blind. I'll also be her executor. (Groan). She has a problem in that apart from writing a cheque out, she can't access her Australian bank account (AML rules etc etc). THIS IS NOT THE ISSUE. We've moved beyond this. But I'm painting a picture.

I've been talking to the bank (as power of attorney) and other parties and have come up with a solution that solves bigger picture issues. The stumbling block for this bigger picture solution is tax on the sale of equities.

So, the solution to all the problems (and there are many more problems than listed above) is to sell the entire shebang in Australian and repatriate the money here. She would sell through a NZ share trading service, probably ASB. The money will go into her NZ account. We will then either write a cheque out to deposit her entire Australian savings into her NZ account.(Another option is something like TransferWise, but moving the money over here is not hte question). Once this is all done there is no money in Australia and no worry about Aussie probate, which is costly from here and a pain in the diggeries.

Just FYI to finish painting the picture, she will then buy a Pie investment here. Hopefully a diversified fund, but she may demand to put the money into Aussie equities and if she does then it will be an Australian Equity Pie of some sort.

Now to the point of this post and the question. If she sells the shares is she subject to tax on the gains in NZ? I'd like to pay to get an opinion from a tax accountant. But she refuses. She says if they give her the wrong advice then she's still liable. (But personally I think that a tax accountants advice will be way better than my research and if nothing a second opinion.) I have looked through everything below. She has gradually bought the Aussie portfolio over 40 years and has been retired for 33 years, living off the dividends. If she has excess dividends she buys rights issues etc. She has only sold a handful of holdings in that 40 years. Mostly when she gets an offer through the mail (not the dodgy ones). So she definitely bought to build up income for retirement. As far as I can see she wouldn't be hit with tax on the gains. But I'd be keen to hear ideas from seasoned investors on here.

Before someone points out that I have power of attorney. She still has her marbles, although she's a bit stuck in the past. I won't use the power of attorney to do anything that's she's not 100% in agreement with. It looks like she agrees with my solution (but she, I and other relatives are all thinking it over for a few weeks first). My big issue is the fear that she could be hit with tax on the gains from the IRD. She is tax resident in NZ, so the Aussie CGT isn't a worry in her lifetime.

FYI, there is a lot more detail and I'm happy to answer questions. Also re the info from Sharesight below, i've been through that list and none of those apply to her. She bought to provide an income in her retirement.


From Sharesight:
When are gains made on shares taxed in NZ?

Unfortunately New Zealand’s IRD provides very little information to investors on when the latter is ruled to apply.
Per Section 65 of the 2007 Income Tax Act, a gain is liable for income tax when:

• The investor is in the business of dealing in shares, or
  
• The shares were acquired with the dominant purpose of resale at a profit, or
  
• The investor enters into a scheme or undertaking to make a profit from shares

In simpler terms:

1. The intent when purchasing the shares needs to be to make a gain when sold
   
2. This needs to be the dominant purpose for the buying of these shares (rather than earning dividend income for example)

NZ may tax gains on shares when:

The IRD looks for a number of behaviours in determining whether the investor is undertaking a business in dealing (or trading) in shares:

• Individuals show a pattern of (usually frequent) buying and selling of shares over time
  
• Individuals invest significant levels of capital in investments, in particular when investing on margin / borrowing to invest
  
• Individuals monitor their investment portfolios closely, perhaps using an advanced online trading platform
  
• Individuals spend a lot of time researching their investments
  
• Individuals buy high risk shares to flip at a profit
  
• Shares are bought and sold on ‘revenue’ account instead of capital account