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?
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.
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