Quote Originally Posted by blackcap View Post
Well on income of course, but what is the definition of income. That is what may need to be looked at. I have no problem with a CGT if it is inflation adjusted.
Definition of 'income' has been spelled out quite easily in the tax books abroad. When I was doing tax courses at uni in Canada, the ITA had all sorts of definitions for incomes / scenarios. But the most interesting aspect i've found was there was no definition for a 'person' in the book. They intentionally left it out to allow for the future trend (as we see today 'virtual bodies'? which can be taxed). It would not take much for IRD to follow similar rules and copy the wording nearly word for word.

Inflation adjusted CGT has been tried in Australia for many years... it didn't work and was complex - having all sorts of inflation rate tables that could be scrutinized as the inflation rates of certain assets varied from year to year from asset to asset. At the end they simply copied the Canadian method of taxing CGT by simply taking half of the gain as being taxable income. The result overall is still a lot less tax paid as the 1 half of the gain is tax free in the person's pocket. I can't see how this would not work in NZ - it's only a question if the NZ politicians want to pay their fair share too?