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Hi Morgy and regards
Pleased to hear you get something out of the
monthly newsletter. If anyone else is interested you can apply at the website
below. Nowadays with cricket I'm into umpiring- not some many
aches and pains with that but still enjoyable and keeping involvement with the
cricket fraternity.
fntradingsolutions has suggested a structure which
seems to have some complexity and would obviously require some knowledge of tax
law in another country and would probably require you to employ a tax
professional in that country, and I cannot comment on his suggestion as I havent
got involved in such structures.
However if you want to simplify matters and due to
the fact that most of us build up a greater understanding of our local tax law
than overseas tax law and thus can react accrdingly with the benefit of
this greater knowledge, and conduct your affairs within NZ, as most NZers
do, then the obvious structure is one that will minimise your tax, bearing in
mind the current tax rates which are as follows:
If you operate as a Self Employed Entity
and TaxPayer:
Taxable Income (which includes profit from
sharetrading and of course all other taxable income derived by the taxpayer)
under $38000- tax rate 19.5% which reduces with rebates for itaxable ncome
less than $38000
Taxable Income $38000-$60000- 33% tax
rate
Taxable Income over $60000 - 39% tax
rate
Company Entity and
Taxpayer
33% tax rate from the first dollar
There is the ability to pay a "shareholder salary"
to shareholders within a company and thus this reduces the taxable income of the
company and therefore the income which is taxed at 33%, and on which
individual shareholders are taxed at their personal tax rates (which could
therefore be 19.5% or less) within this structure.
Also , by using this structure and if the business
has substantial taxable profits then the maximum tax rate can be structured to
be 33% (rather than 39% if all the business affairs are conducted within a self
employed entity).
By the way, not everything trading in shares can be
deemed a trader for tax purposes. The following article talks about
this:
Chartered Accountants offering assistance with
business startup and advice, taxation and accounting services to small business,
self employed persons and rental property owners and audits for not for profit
organisations. Members of the Chartered Accountants of New Zealand
and the Taxation Institute of New Zealand.
----- Original Message -----
Sent: Saturday, October 04, 2003 8:54
PM
Subject: [sharechat] Tax Structure
Murray
What do you think would be the best way to structure a trading business for
tax effectiveness, we might as well have some specialist advice, by the way I
enjoy your monthly newsletter, always get something out of it. You would be
tuning up for cricket season would you ?.
Regards
Morgy
>From: "McLean & Co"
>Reply-To: sharechat@sharechat.co.nz
>To:
>Subject: Re: [sharechat]
>Date: Sat, 4 Oct 2003 19:28:53 +1200
>
>33% tax rate for a trust Allan
>
>
>
>----- Original Message -----
>From: "allan russell"
>To:
>Sent: Saturday, October 04, 2003 5:49 PM
>Subject: Re: [sharechat]
>
>
> > I feel you are spot on with the ANZ, they also give good
back up service,
> > and that helps when you have questions, and dont be
scared to ask if money
> > is at stake.
> > Tax, I pay tax and am happy to pay it. If I dont Im not
makeing money and
>Im
> > sad not to be paying it.
> > 2 stories to illistrate a point, on a personal level, I
watched a family
> > member recieve free emergency care in hospital one year,
I would have at
>the
> > time signed away all I owned had it been nessary to
continue the care, I
> > have recieved value for money for taxes.
> > Story 2, a friends young son, working under the table,
knows it all,
>doesnt
> > pay tax you see, so clever.
> > injured himself on the job, and now is off work and cant
get acc, for 80%
>of
> > earnings he "never recieved".The ird can be a little
inconsistant when
> > deciding if you are a trader in shares, or not, and once
painted with the
> > trader brush you are stuck with it.
> > To avoid it a trust can be formed that pays a 30% tax
rate, but your
>future
> > dealings, are seperate from the trust.
> > Allan.
> >
> >
> >
> > >From: "Matt c"
> > >Reply-To: sharechat@sharechat.co.nz
> > >To: sharechat@sharechat.co.nz
> > >Subject: [sharechat]
> > >Date: Fri, 03 Oct 2003 19:57:48 +1200
> > >
> > >Hi, I'm abit of a novice investor, not yet in my
twenties.
> > >
> > >I was just wondering if we in NZ can take advantage
of the current high
>$nz
> > >dollar. (which markets are best to invest in
currently etc)
> > >
> > >Also, which is the commonly accepted best online
broker?
> > >From the fees I saw ASB seemed the best and Direct
the worst.
> > >
> > >Does anyone have an opinion on fletcher forest shares
at their current
> > >price of around $1.30? I brought in at $1.10
> > >
> > >Ah and approximately how often per year can you
buy/sell shares before
>the
> > >IRD recognises you as a trader rather than an
investor?
> > >
> > >Help with any of my questions would be great, thanks.
> > >
> >
>_________________________________________________________________
> > >Check out the Xtra gaming servers at
http://xtramsn.co.nz/gaming !
> > >
> > >
> >
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> >
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> >
> >
> >
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> >
> >
>
>
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