Quote Originally Posted by jorge_telosa View Post
Thank you Snoopy and SBQ for the answers. As I understand from your examples, am I correct that it will only be under FIF if at one time all outstanding investments reached over 50k? So if I am day trading and buying less than 50k during the day but also selling it on that day, then I will not be subjected to FIF since I dispose the shares. Even if I invested 49k in a day and sold it for 55k, it will still not be subjected to FIF, correct? But as Snoopy mentioned, I might be subjected to quick sale adjustments but FIF will always be zero if daytrading with less than 50k purchases. I am only trading US stocks and only 1 stock a day.

Seems like it is better to be under FIF rather than paying 33%, or am i wrong?

So in my case:
1. Future trading gains will be subjected to income tax (i.e. 33% if over 70k)?
2. Share “day trading” will not be subjected to FIF if total purchase is below 50K. But subjected to quick sale adjustment? This is better cause you are going to pay less rather than the income tax thresholds.
No it would be worse than FIF. Regardless of amount invested, every $1 of gain of profit you make from frequent trading (hyperactive day trades, monthly, weekly, etc) would be subjected to RWT rates. The distinction here is you're 'speculating' with the 'INTENT' to profit and not necessarily the intent for retirement savings. Of course this can be disputed by picking 5 accountants in NZ, and not all will agree. Some will say it's only FIF ; but my guess is siding on the 'intent' aspect. For eg. have a look at NZ's managed funds under PIE and none of them practice the habit of day trading so they can maintain FIF standing. I'm certain that would all change if the fund manager changed their scope to doing ultra short term profits vs long term retirement gains. Then their funds would be subjected to corporate tax rates.

The 'quick sale' calculation ONLY applies under FIF. The key determination why FIF came about is to address overseas emphasis of capital gains vs in NZ, the share emphasis is on paying dividends which results in lower capital gain.