Tutorial 5 – Week 9
Week beginning 18 May 2020
(Personal Property/Land)
QUESTION 1
Susan is a university student at the University of Auckland. She is in her final year. She is quite
good at fixing old laptops. She
...
Tutorial 5 – Week 9
Week beginning 18 May 2020
(Personal Property/Land)
QUESTION 1
Susan is a university student at the University of Auckland. She is in her final year. She is quite
good at fixing old laptops. She has been doing this as a hobby for a few years. In the last 6
months her friends have been giving their laptops that are not working. Susan found that she
was able to fix half of them. She then sold the repaired laptops for $400 each.
Sue is thinking that she may start to advertise to buy laptops in need of repair and sell them
on.
A few weeks after advertising online she received an email from IR asking her how long her
business had been operating. But Susan is adamant that she is not is business she is just selling
a few laptops that she is repairing.
Advise Susan on whether her “hobby” is caught by CB3, CB4 or CB5.
QUESTION 1 - Part B
Agam is a international student studying a Bachelor of Arts at the University of Auckland. He
was required to deposit $12,000 in a New Zealand bank account as part of his NZ Student Visa
before coming to study in New Zealand. That money will be returned to him at $1,200 per
month.
He has also been working part-time as an Uber driver and manged to save some money. He
decides to invest the money in the share-market through online banking. It will only cost him
$13 per transaction each time he invests less than $1000. He reads the business news and then
decides where to invest.
Agam bought shares that were not performing well in the hope that they would increase both
their dividend yield and their share value. When this happened, he sold the shares and reinvested the money in other undervalued shares.
Over a period of 4 years (3 year degree and one year of a work visa) he purchased 15 parcels
of shares, holding them for periods of between 6 months and 2 years. During this time he
invested $12,000 increased the value of his capital by $5,000, while making $2,000 in
dividends.
This year IR sent Agam an email stating that they had issued an assessment based on the
assumption that he had brought all the sales for the purpose of resale.
Advise Agam on whether his purchase and sale of shares is caught by CB3, CB4 or CB5
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