Tax on FX Investment
Question:
I'm trying to do online FX trading and really confuse with the tax. Is my gain from foreign currency trading counted as capital gain?
Answer:
Despite the fact that New Zealand does not have a Capital Gains Tax, there are circumstances where gains made can be taxed as income. Unfortunately it's a situation where the tax system could be accused of taxing gains in a somewhat ad hoc manner.
The basic theory is that if you make an investment with the intention of holding on to it for the long term, then gains made aren't taxable. Where you are trading with the intention of selling for a profit in a short space of time, gains will be taxable.
Under this definition, regular, for profit currency trading may count as income subject to tax (that's the best answer we could get from the IRD when we asked them this question).
We advise that you talk to an accountant.
If any readers have direct experience of this situation, please comment below.
The advice provided is of a general nature, and we are not responsible
for any loss that any reader may suffer from following that advice.
Latest Tax News
- GST Rise Would Be Matched By Immediate Super Hike: Key
- Higher GST Seen Funding Lower Personal And Corporate Tax
- Tax Cut Cancellation Law Passed By Parliament
- Key Says Tax Ads Were Cheap Compared With Labour's
- Future Of Tax Cuts In May Budget: English
- Tax Cuts Will Deliver "Shot In The Arm" For Economy - Ministers
- Bill To Help Small Businesses Completes Next Stage
- Labour Offers Support If Tax Cuts Deferred
Latest Tax Questions
- Tax Minimisation: What Are My Accountant's Obligations?
- Do I Need To Pay Tax On The Capital Gain From An Investment Property?
- At What Point Does A Stock Trader Need To Pay Tax On Profits?
- Should I Include KiwiSaver Tax Statement Information In My IR3 Return?
- If I Own A House And Then Rent It Out, Can I Claim Expenses?
- How Can I Reduce My PAYE Tax?
- If I Lived In A House Before Renting It Out, Is My Mortgage Interest Tax Deductible?
- Could I Incur Capital Gains Tax On Share Sales?
Featured recommendations on Recommended.co.nz
About guide2.co.nz : money
Find the latest money news and 'how to' guides on Guide2Money.
Ask our researchers your personal finance questions or use our business directory to find businesses that can assist you.
Your Questions. Independent Answers.
---
Australian 'how to' guides and recommendations
Comments
You have pointed out to a
You have pointed out to a very clear distinction; long term and immediate gains. I have question, would the deposit to fund a trading account be tax deductible as a business expense? My perception is that it must be tax deductible. What is your view on this?
Thank,
enteen m
If i invest in a foreign
If i invest in a foreign currency and the currency doesn't revalue to a higher rate but reinstates to a higher previous rate that was before I invested, what are my tax implications?
Post new comment