Income tax on trading

[blackcap]

Thanks for the questions.

Re residency. She lived in Australia for 18 months in approximately 1960/61. She didn't start buying the relevant equities until the late 70s early 80s. Note she was born in NZ. She lived in the UK for a couple of years in the late 1950s, then the 18 months in Oz, and back in New Zealand for the past 57 years.

Re where the equities are held. She bought them through a New Zealand broker in New Zealand. So I'm pretty sure that means they're held here.

Re the bank. Westpac is her Australian bank. Opened at some point decades ago before AML. But opened from NZ when that was easy. The reason for opening was to receive her Australian dividends. Her postal address for that bank account has always been NZ. ASB is a New Zealand bank.

Re FIF. I can't seen the connection of FIF to the question of taxation on trading profits (and the question here is whether she is trading). But in terms of FIF I just need to say the word and her pacemaker nearly explodes. She divested herself of the one FIF holding she had as soon as the FIF tax was brought in. So no FIF holdings. ButI still can't see any connection with the issue of tax on trading profits.

Australian residency. Even if she was a resident in 1960/61, she wasn't a resident when these shares were bought. She owned no equities when she departed Australia.

AML/CRS was the problem that set off this entire enquiry. However we're not worried about AML. Just the spectre of tax on trading profits.

Re intent. The question out her intent when buying is only one of the tests the IRD exercises. There are others that were set out in my original post. The questions relate not to CGT but to income tax when traders are living off the capital gain. So the capital gain is their income. She hasn't traded. Ever. She has never bought to trade so I'm fairly confident she could not be classed as a trader. She bought the equities to provide an income in her old age, which is exactly what they have provided for the past 33 years.

Any thoughts gratefully received.

Very simply, go and see a good tax accountant.