sharetrader
Page 3 of 7 FirstFirst 1234567 LastLast
Results 21 to 30 of 65
  1. #21
    Legend shasta's Avatar
    Join Date
    Sep 2004
    Location
    Wellington
    Posts
    5,914

    Default

    Quote Originally Posted by impacman View Post
    No we don't but the other trustees have okayed me to manage the share portfolio on their behalf. The trust holds other assets as well so it hasn't been set up to solely invest in equities. Will raise this with our accountant to get their view and let you know the opinion. Thanks for the heads up though.

    Cheers
    Your Accountant hopefully has ensured what you are doing is well documented!

    Using a Trust has pitfulls where Trustees, MUST be acting in the best interests of the Beneficiaries.

    There have been court cases where Beneficiaries have successfully sued the Trustees for capital losses, when they were acting outside the scope of the Trust Deed.

    I'd be making sure your Accountant reviews everything annually, including all documentation.

  2. #22
    Senior Member
    Join Date
    Aug 2002
    Location
    auckland, , New Zealand.
    Posts
    769

    Default

    If I borrow (not substantially), the interest I am charged is tax-deducitble? Yes, if you are trading. (Shasta)

    Shasta, my understanding is that if money has been borrowed for trading then the interest is tax deductable as you mentioned.

    You not mentioning borrowing for long term investing, but I thought the tax rules would be the same. Its an expence for furure earnings (dividend).

    Any comments invited.

    Cheers Forest.
    Last edited by forest; 10-10-2009 at 05:07 PM.

  3. #23
    Legend shasta's Avatar
    Join Date
    Sep 2004
    Location
    Wellington
    Posts
    5,914

    Default

    Quote Originally Posted by forest View Post
    If I borrow (not substantially), the interest I am charged is tax-deducitble? Yes, if you are trading. (Shasta)

    Shasta, my understanding is that if money has been borrowed for trading then the interest is tax deductable as you mentioned.

    You not mentioning borrowing for long term investing, but I thought the tax rules would be the same. Its an expence for furure earnings (dividend).

    Any comments invited.

    Cheers Forest.
    Borrowing to buy shares (whether short, mid or long term) makes no difference, the interest is deductible.

    But any gains made regardless would also be subject to tax.

    Think of claiming costs as = trading (i know it's a loose intepretation!)

    If you have no "income" as such*, the IRD could quite rightly deny the interest expenses claim (+ add Use of Money Interest & Penalties).

    * Dividends & Bonus shares/DRP would satisfy the IRD as income.

  4. #24
    Member
    Join Date
    Jun 2008
    Location
    Auckland
    Posts
    332

    Default

    Thanks CJ, Oldrider and Shasta. I will follow up with the accountant and do a bit more digging myself. Will come back to the thread with any new/useful information.

    Hope the weekend is going well

    Cheers

  5. #25
    Advanced Member
    Join Date
    Sep 2004
    Location
    , , .
    Posts
    1,894

    Default

    Quote Originally Posted by forest View Post
    If I borrow (not substantially), the interest I am charged is tax-deducitble? Yes, if you are trading. (Shasta)

    Shasta, my understanding is that if money has been borrowed for trading then the interest is tax deductable as you mentioned.

    You not mentioning borrowing for long term investing, but I thought the tax rules would be the same. Its an expence for furure earnings (dividend).

    Any comments invited.

    Cheers Forest.
    Forest

    My accountant assures me that borrowing in order to buy shares that produce income is a tax deductible expense . As long as you buy them with the intention of holding long term for dividend income there is no tax on capital gains-even if you sell a few here and there for various reasons that crop up -as they do from time to time .
    I take this to mean that if I believe another share has better prospects at producing income it is ok to sell the less favourable share and not pay tax on any capital gain .
    Some time ago I read that the ird might classify you as a trader if you did more than 10 transactions a year . This to me seems non-sensical as if you say had 100,000 invested and did 11 trades a year of 1000 each you would be a trader even though you had not traded the majority 89% !

    Precedent is relevant and if you have ever claimed for a capital loss -as a friend of mine has-the ird will have you classified as a trader .

    I invest solely to provide for my retirement and have never claimed a deduction for a capital loss or paid tax on a gain in 19 years of share buying and selling-even though i may do it more than 10 times a year .However I have only sold a minority of the shares I own .My share portfolio has always produced a net taxable gain for the ird .

    One would hope that the ird would have difficulty establishing an intention to trade when I bought the shares -especially as this is definately not the case .

    I wonder if anyone here has had the IRD wrongly accuse them of being a trader and taxing capital gains ?

  6. #26
    Legend
    Join Date
    Apr 2008
    Location
    Sth Island. New Zealand.
    Posts
    6,428

    Default

    Quote Originally Posted by fish View Post
    Forest

    My accountant assures me that borrowing in order to buy shares that produce income is a tax deductible expense . As long as you buy them with the intention of holding long term for dividend income there is no tax on capital gains-even if you sell a few here and there for various reasons that crop up -as they do from time to time .
    I take this to mean that if I believe another share has better prospects at producing income it is ok to sell the less favourable share and not pay tax on any capital gain .
    Some time ago I read that the ird might classify you as a trader if you did more than 10 transactions a year . This to me seems non-sensical as if you say had 100,000 invested and did 11 trades a year of 1000 each you would be a trader even though you had not traded the majority 89% !

    Precedent is relevant and if you have ever claimed for a capital loss -as a friend of mine has-the ird will have you classified as a trader .

    I invest solely to provide for my retirement and have never claimed a deduction for a capital loss or paid tax on a gain in 19 years of share buying and selling-even though i may do it more than 10 times a year .However I have only sold a minority of the shares I own .My share portfolio has always produced a net taxable gain for the ird .

    One would hope that the ird would have difficulty establishing an intention to trade when I bought the shares -especially as this is definately not the case .

    I wonder if anyone here has had the IRD wrongly accuse them of being a trader and taxing capital gains ?
    There's no simple answer to this question. If you are a long term holder and pop-off a few now and then, you are most unlikely to attract the attn. of the IRD especially if you reinvest. That's just re balancing to protect your investment. But if you pop-off the odd few to spend or live off, then the rules might change, and it's more likely to be noticed if you have no other income. If you wind down long term holdings after a few years you probably won't be taxed as long as you have finished buying, even if you make heaps of sell transactions in one year. You're not trading - you are retiring. But good luck!

  7. #27
    Legend shasta's Avatar
    Join Date
    Sep 2004
    Location
    Wellington
    Posts
    5,914

    Default

    Quote Originally Posted by funguspudding View Post
    There's no simple answer to this question. If you are a long term holder and pop-off a few now and then, you are most unlikely to attract the attn. of the IRD especially if you reinvest. That's just re balancing to protect your investment. But if you pop-off the odd few to spend or live off, then the rules might change, and it's more likely to be noticed if you have no other income. If you wind down long term holdings after a few years you probably won't be taxed as long as you have finished buying, even if you make heaps of sell transactions in one year. You're not trading - you are retiring. But good luck!
    One thing that does arouse the IRD, is trading in & out of the same share.

    If you were rebalancing your portfolio say once a year, you'd be fine.

  8. #28
    Senior Member
    Join Date
    Aug 2002
    Location
    auckland, , New Zealand.
    Posts
    769

    Default

    [QUOTE=fish;276920]Forest

    My accountant assures me that borrowing in order to buy shares that produce income is a tax deductible expense . As long as you buy them with the intention of holding long term for dividend income there is no tax on capital gains-even if you sell a few here and there for various reasons that crop up -as they do from time to time .
    I take this to mean that if I believe another share has better prospects at producing income it is ok to sell the less favourable share and not pay tax on any capital gain .
    Some time ago I read that the ird might classify you as a trader if you did more than 10 transactions a year . This to me seems non-sensical as if you say had 100,000 invested and did 11 trades a year of 1000 each you would be a trader even though you had not traded the majority 89% !





    Yes fish my accountant came with an identical story about interest deductability.

    Well we are on the subject about expenses for share investing. I also discussed if I could deduct for tax other expenses as a long term share investor and the advice was NO.

    Does this sounds right to others. If you invest in shares long term to create a dividend for income cost like computers, travel to meetings, brokerage, magazines, newspapers etc is not tax deductable.

    If I operate any other enterprice to create an income I believe you can deduct these very genuine expenses.

    What expenses apart from possible interest do other long term share investors claim??

    Cheers, Forest
    Last edited by forest; 11-10-2009 at 05:26 PM.

  9. #29
    Advanced Member
    Join Date
    Sep 2004
    Location
    , , .
    Posts
    1,894

    Default

    [QUOTE=forest;276926]
    Quote Originally Posted by fish View Post
    Forest




    Yes fish my accountant came with an identical story about interest deductability.

    Well we are on the subject about expenses for share investing. I also discussed if I could deduct for tax other expenses as a long term share investor and the advice was NO.

    Does this sounds right to others. If you invest in shares long term to create a dividend for income cost like computers, travel to meetings, brokerage, magazines, newspapers etc is not tax deductable.

    If I operate any other enterprice to create an income I believe you can deduct these very genuine expenses.

    What expenses apart from possible interest do other long term share investors claim??

    Cheers, Forest
    I was also told I couldnt claim brokerage expenses as an investor(as opposed to a trader )

    I havnt attended any company agm yet and like you am not sure if this is a tax deductible expense .
    I would have thought that if you used your computer to keep track of dividend income etc a percent proportional to buisness use would be claimable

  10. #30
    Member
    Join Date
    Apr 2007
    Location
    Christchurch, , New Zealand.
    Posts
    35

    Default

    Quote Originally Posted by theArtfuldodger View Post

    Also, are losses on trades tax-deductible?

    Thanks.
    They are only deductible if you were going to be paying tax on any profit you made on that trade. I.e. if you're a "trader" then yes; if you're an "investor" then no.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •