Do you bet at the tab or casino?

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richgamer

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Topic # 24411 23-Jul-2008 12:25

Do you have to pay tax or declare your income on your tab winnings? same goes for casino winnings?

[Moderator edit (MF): fixed spelling in subject]

itxtme

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Reply # 150623 23-Jul-2008 13:03

I believe not, you have already paid tax on the money you are spending..

xpd

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Reply # 150635 23-Jul-2008 13:39

Tax free I believe, same as winning Lotto (which is gambling anyway.)
Give me Roulette at the casino over lotto anytime.....

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inane

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Reply # 150648 23-Jul-2008 14:18

I am pretty confident that the NZ Govt actually charges a levy on gambling institutions (TAB, Casinos, Gaming Machines, lotto, etc)

and the levy is based on the amount ratio of bets to winnings or somesuch,

the only time you have to pay tax on income through gambling earnings is if you do it for a profession.

eg, if your main income is as a Poker player or gambling on the horses.

I found this useful snippet

Lotto winnings are non-taxable. Any interest derived from those winnings, once they are in an investment portfolio, will have resident withholding tax deducted from them, however the capital amount remains non-taxable. The same goes for other ‘luck’ based gains (eg the horses, gambling and the pokies). You will, however, be taxed on such winnings if you are in the business of, for example, gambling or horse racing.

richgamer

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Reply # 150906 24-Jul-2008 11:55

what is main income though? if you earn $3000 a month as a butcher and you won $5000 at the tab does that mean you have to pay tax because it is 'main income'?

inane: I am pretty confident that the NZ Govt actually charges a levy on gambling institutions (TAB, Casinos, Gaming Machines, lotto, etc)

and the levy is based on the amount ratio of bets to winnings or somesuch,

the only time you have to pay tax on income through gambling earnings is if you do it for a profession.

eg, if your main income is as a Poker player or gambling on the horses.

I found this useful snippet

Lotto winnings are non-taxable. Any interest derived from those winnings, once they are in an investment portfolio, will have resident withholding tax deducted from them, however the capital amount remains non-taxable. The same goes for other ‘luck’ based gains (eg the horses, gambling and the pokies). You will, however, be taxed on such winnings if you are in the business of, for example, gambling or horse racing.

freitasm

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Reply # 150908 24-Jul-2008 12:00

But do you that amount every month, on a regular basis? A one off doesn't count.

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inane

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Reply # 150943 24-Jul-2008 13:32

freitasm: But do you that amount every month, on a regular basis? A one off doesn't count.

Freitasm, its not quite as simple as that,

Even if you do get that amount (or similar) every month, it doesn't neccessarily make it your main income,

in the same way as if you have a million dollars in the bank and you get 7% interest per annum (so $70,000 per year not calculating for compounding)
and you work at McDonalds and earn $28,000 per year,

the McDonalds Job can still be your main income.

I don't know exactly how it works here, but I knew a guy who had a horse racing system with his dad and brother and it was a really good system and it earned them a very very decent packet.

at the same time though, they had their jobs listed as window washers - which they did do, a couple of days a week, the dad owned the commercial window washing franchise and the guy I knew and his brother both worked at it.

and because that was their main profession, they didn't have to declare their horse racing winnings for tax purposes.

Over here, I think its a case where; if you win it, even on a regular basis its yours. _unless_ you don't do another job, in which case you could be considered to be a professional.

The reason being, the government have already dipped into the money being gambled,

eg, in regards to gaming machines at a pub, if its not a charity (or any number of other exculsions) then the government Gaming Machine Duty is 20% of profits from the machine, which in other terms, is 20% of the money gambled and lost by the gamblers,

Casinos have another % duty, that is easy enough to find on the IRD site.

so in NZ really what you need to worry about is money made off gambling windfalls, eg, if you win 1,000,000 in lotto, and stick it in an account, and earn 70,000 interest, you don't have to pay tax on the initial 1,000,000 you won, but you do need to pay tax on the interest that you have earned.

I have sent a query to IRD regarding the exact nature of what would constitute a primary income, etc. so we'll see how that goes.

inane

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Reply # 151210 25-Jul-2008 10:05

Well the IRD true to form, totally unhelpful.

my query: Hi There, I was engaging in an online disc
ussion, and tried to find the relevant inf
ormation but was unable to and hoped you w
ould be able to help.

Regarding income from Gambling in New Zeal
and, under what situation would you have t
o pay tax,

Eg, if I worked in job X (say salaried wit
h tax code M) and earned $4500 per month,
but also gambled on the horses through the
TAB and managed to be quite successful an
d was able to regularly make $5000 per mon
th from that, would that consitute of bein
g "in the business of gambling"
or professional gambling or main income??

if not, what sort of situation would one n
eed to be in whereby they would be conside
red to be gambling as their main income an
d therefore have to pay tax on their earni
ngs?

Thanks.

And The IRD Responds:
I am unable to respond to your original query by email, at this point of time, as you have requested personal tax information

sjadd

61 posts

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Reply # 151261 25-Jul-2008 12:34

Not sure how fussed you are about getting an answer, you might have more luck posting in the "Tax Talk" sub-forum at
http://www.nzmoneytalk.co.nz/forum/

1gkar

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Reply # 151478 25-Jul-2008 23:30

You can afford to put money into casinos with the huge rises in petrol, dairy; hell, just about eveything in the last ten months. Got a spare job

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1gkar

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Reply # 151481 25-Jul-2008 23:36

inane: Well the IRD true to form, totally unhelpful.

my query: Hi There, I was engaging in an online disc
ussion, and tried to find the relevant inf
ormation but was unable to and hoped you w
ould be able to help.

Regarding income from Gambling in New Zeal
and, under what situation would you have t
o pay tax,

Eg, if I worked in job X (say salaried wit
h tax code M) and earned $4500 per month,
but also gambled on the horses through the
TAB and managed to be quite successful an
d was able to regularly make $5000 per mon
th from that, would that consitute of bein
g "in the business of gambling"
or professional gambling or main income??

if not, what sort of situation would one n
eed to be in whereby they would be conside
red to be gambling as their main income an
d therefore have to pay tax on their earni
ngs?

Thanks.

And The IRD Responds:
I am unable to respond to your original query by email, at this point of time, as you have requested personal tax information

Where in this post have you requested personal tax information? The fact you precluded the example (hell, there's a hint) with "eg, if..." indicated it was theoretical. The respondent must be from the same family as the Amercian Patents clerk, who in 1899, stated, 'everything that could be invented, has been invented."