Quote Originally Posted by dobby41 View Post
Will IRD take notice though?
'Intent' is a major factor in the tax law.
If you intended to hold for the long term (and have held for years) could they say that the CG is taxable just because it now drives the majority of your 'income'?
I am told by several financial planners that it is a common tactic and is seem as being acceptable.

It is really a problem with our tax system - we tax 'income' more than we tax wealth.
I think we will have to start taxing wealth because more and more people will use this sort of construct to provide them with a 'living'.
Common enough for advisers to propose withdrawing capital at say 4% a year in retirement. A clear intention there and seems most unlikely that this alone would see IRD count the person as a trader. Or as a non-retiree depending on some definition of age, that would in any case be a HR Act breach.

Taxing wealth as income - it has been proposed - would encourage different behaviour.

I have older rellies in Australia where there is means testing for pensions - income and assets. They have very good advisers.