Legitimate expenses against tax

[fish]

I suspect most investors do not bother to claim expenses incurred in making income from their investments .
It could be helpful if we discussed what we consider to be legitimate expences
? shareholder association fees
?financial books /newspapers
?use home office
?percentage of computer /broadband fees
?attendance at agm -flights maybe food and accomodation
?attendance at overseas AGM

[CJ]

Are you are passive holder or an active trader. IRD more will to allow for the second rather than the first. Depending on size of portfolio, why do you need to incur all these costs if passive long term holder (and before anyone rebukes this - I know you must constantly reassess your portfolio - just playing the devil (aka IRD)).

Likewise, a big portfolio would be more benificial that a small one.

[fish]

Thanks cj
I would trade about 10 to 20 % of my portfolio per year -i hold about 10 stocks and may trade a small percentage of 4 stocks .My prime intention is to look for dividend income-i will need this when i retire so i invest in stocks such as NOG-no dividends yet but in 5 years time could be anywhere-most likely in the range 10 to 100 %. If 100% of current price i semi -retire -if 10% i continue accumulating stocks

[KJ]

Fish -flick to Page5-"Tax deductions for Traders"

[minimoke]

quote:Originally posted by fish

I suspect most investors do not bother to claim expenses incurred in making income from their investments .
It could be helpful if we discussed what we consider to be legitimate expences
? shareholder association fees
?financial books /newspapers
?use home office
?percentage of computer /broadband fees
?attendance at agm -flights maybe food and accomodation
?attendance at overseas AGM

I think the only other thing to add is that I recall that the expences have to be necessarily incurred to create an income. So if you are trading for capital gains the expences won't be deductible. We'll have an accountant here somewhere who should be able to clarify.

[Neo-Con]

There are a limited no of expenses everyone can claim no matter what (accounting fee etc)

Other than those few, you won't get anything unless you are "in business". If you are in the business of trading then that means although you will get to claim expenses but you will have to pay tax on capital gains.

Of course you could argue that you are in business of "recieving dividends" and the shares are still held on capital account but this may interest the IRD esp if you are frequently buying and selling


Even if you are in business there isn't that much you can claim. Certainly brokerage, interest, you can only claim home office if there is a part of your house that is mostly used for the business. Basically if you can make the case that the expense is incurred in the running of the business then you can have it.

If all you recieve in the way of tax credits is IC's then you can't get those refunded (of course the IC's may meet some of your tax liability allowing you to get PAYE etc refunded) anyway so the upside is not huge.