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richgamer

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#20018 10-Mar-2008 11:57
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i'm thinking of buying some shares myself without a broker. i'm with asb bank and you can trade shares yourself online i think. i only have about $1000 to spend. does anyone know if you have to declare income from shares in your tax return? are there brokers that handle the tax issue for you?

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tonyhughes
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  #115702 10-Mar-2008 12:38
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We have shares, owned by us personally, and all the tax side is handled by our accountant (who does our personal taxes as well as our LAQC).

For what its worth, we feel we are far better off paying experts to handle the issues/tasks behind our actual decisions, than risk getting it wrong (especially tax-wise).







sleemanj
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  #115765 10-Mar-2008 15:37
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richgamer: i'm thinking of buying some shares myself without a broker. i'm with asb bank and you can trade shares yourself online i think. i only have about $1000 to spend. does anyone know if you have to declare income from shares in your tax return? are there brokers that handle the tax issue for you?


If you derive income, there is tax to pay.  If you really want to get into the sharemarket, then I'd see an accountant.

The question is.  Do you REALLY want to get into the sharemarket, unless you really know what you are doing, you'll probably lose.

In my opinion, just go with managed funds, leave the details of trading in the shares to the fund managers who are paid for thier expert knowledge. 




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alasta
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#115768 10-Mar-2008 15:49
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I agree with the others.

If you're investing such a small amount of money then you're likely to end up investing in only one or two companies which would be extremely risky. A professional fund manager on the other hand would invest your funds in a number of shares based on data showing price correllations between the various securities.

I would suggest that you keep your $1000 in a term deposit or high interest savings account until you have enough spare cash to justify taking it to a professional investment adviser.

sleemanj
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  #115775 10-Mar-2008 16:05
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I would suggest that you keep your $1000 in a term deposit.


$1000 is a bit light for a Term Deposit. Anyway ASB (who the original poster banks with) appears to have an online call account called "FastSaver" currently offering 8% PA and no minimum balance. That's a pretty good deal.




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alasta
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#115800 10-Mar-2008 17:56
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sleemanj:
$1000 is a bit light for a Term Deposit. Anyway ASB (who the original poster banks with) appears to have an online call account called "FastSaver" currently offering 8% PA and no minimum balance. That's a pretty good deal.


Yeah, there are quite a few good deals around at the moment for high interest savings accounts and they seem to be slowly but surely killing off term deposits.

jberries
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  #115817 10-Mar-2008 19:00
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I don't think you do pay capital gains tax on shares (or property) see the below quote

"In a way property and shares in New Zealand are quite similar. Both investments receive income ­ rental income from property and dividends from shares. Property and shares also have tax-free capital gain in New Zealand (provided you did not purchase specifically to make a profit or are a trader for tax purposes). Share prices go up because the company profit increases (therefore resulting in higher dividends), likewise property values tend to go up when the rent goes up."

from this site
http://www.approved.co.nz/resources/rental_property.php

sleemanj
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  #115822 10-Mar-2008 19:20
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jberries: I don't think you do pay capital gains tax on shares (or property)


Broadly true, but dividends on those shares are certainly taxed normally.

As for capital gains, for property if you purchase with intent to make money from it (you are a property developer/investor), any gain is taxable profit. 

With shares, it's more complicated, contact an accountant, but from memory, if you are a share trader, gains are taxable profit in the same was as if you are a property developer, if you have shares in overseas companies other than in Australia then a capital gains tax is levied.  But for general investment, buying (shares in) a company, and selling it at a later date, any gain is not taxed (and neither is a loss deductable of course).  In short, it gets complicated quickly and there are various grey areas, see an accountant.






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sleemanj
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  #115826 10-Mar-2008 19:35
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It's also worth considering Kiwisaver richgamer, if you're not already enrolled that is.

You can enrol even if you're unemployed or self employed.  Use the money to offset/put in $20 a week, and in the first year you will effectively triple your money.

  You put in $1000
  Government kick starts you $1000
  Government matches your $1000

I think that's right.  Certainly worth considering. 

You could even go on a "payments holiday" once your first year is up, and keep renewing it so you never have to pay another cent to the kiwisaver account, although while the government is matching, what, about $1000 of your contributions a year, it's probably well worth continuing to pay into it (a free $1000 every year).  And if you want to buy a house in the future, the government can then contribute up to $5000 if it's a first home and meets the criteria (median price etc).

Catch of course is that you can't get at it until you're over 65, or on deaths door, dead, or leaving the country permanantly.





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James Sleeman
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richgamer

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  #116646 14-Mar-2008 17:13
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i thought there was a minimum income threshhold that is tax free isn't there? anyone know the minimum amount of income you receive that is tax free? is it $50, $100, $1000?

grant_k
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  #116671 14-Mar-2008 18:27
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richgamer: i thought there was a minimum income threshhold that is tax free isn't there? anyone know the minimum amount of income you receive that is tax free? is it $50, $100, $1000?

Sorry!  There is no minimum income that is tax free although you do get a Low Income Earner Rebate if you earn less than $9880 per year IIRC, which reduces your tax to less than the normal $0 - $38k rate of 19.5c per $.

For further details, have a look at the IRD web site:  www.ird.govt.nz

Fossie
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  #118457 25-Mar-2008 01:05
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Open up an ASB securities account and go nuts. I currently have shares in two companies.

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