Quote Originally Posted by Harvey Specter View Post
Correct. The problem is IRD wont beleive you so will look at other eveidence to determine such as frequency of trades etc.

Incorrect but practically, probably true. There are a number of tests including 'amounts derived from busines' and 'personal property acquired for the purpose of disposal'. Your lawyers advice only covers the first.

Each individual investment should be tested. For example, you are a long term investor, but you get a hot time that a share is going to be taken over, so ignoring insider trading, you buy on the tip and sell 4 weeks later at a 50% profit. That should be taxable as you acquired the share for the purpose of disposal.

Thats an obvious example. BUt take XRO for example. They have stated they wont be paying dividends in the foreseable future. So the only reason to buy is for 'capital' gain. Not sure on this one.
Grey,Grey and more Grey and unless your in The Business of Share trading why worry just fly under the radar as I'm sure most do,re Xro and the like they may pay a divvy one day and capital gain is fine,remember rule number one NZ doesn't have a capital gains tax at this point in time so is different from a pure profit driven trade,some more Grey anyone?