i think i can start a class in lowyat forum to teach you all about badges of trade.

key word is badges of trade.

let me question all those people who said capital gain without looking into badges of trade.

money changer, they 'invest' in foreign currency, then sell it to you and make a profit out of it. they do it 24/7, so its capital gain or is it business gain? how do you determine ?

there are rules defining what is capital gain and what is not, dont see the word forex trading, share trading, investment = capital gain in nature....

something like tat... because without knowing the full picture, one can not be certain on the treatment. for example,

A invest 1mil in few stocks and make and make 500k within a year.
B invested 1mil in stock market, making transaction on daily basis. accumulate hundred of transactions a year to make 500k.

these 2 scenarios would have different treatment although 'A' might be fall under income tax instead of capital gain, but its arguable since its only few transactions. but B making hundred or thousand transactions a year is very likely to be non capital gain.

this is because the moment they saw their own keywords stocks, forex they will jump into conclusion ... capital gain in nature.... but in fact, badges of trade or other case law to define what is trade and what is capital gain... not just the word, investing/stock/forex.

for years i have been seeing these few confused topics on tax arising from forumer :-

1. foreign income not taxable
2. capital gain not taxable

We need to know how to define foreign income and how to define capital gain. i saw a lot of people define these 2 using their own interpretation.

This post has been edited by klthor: Oct 24 2017, 10:44 AM

the fact capital gain is not taxable remain unchanged, it boils down to how you define capital gain. for example, we all know speeding is against the law. but what is speeding? definition of speeding etc etc... some said 80km/h, some said 90km/h, some said 110km/h, some said 60km/h

like now, i still can see some said the number of transactions doesnt matter but the duration of holding. more than 3 months is consider capital gain etc. that is why the confusing part kicks in, interpretation of the law. we all have our own interpretation. im not a lawyer, you guys can search badges of trade case law. if you still insist on your own interpretation, you can always take LHDN to court. once you won, it will become a case law and a guide line for the rest of us. if LHDN won, they will use this case law to take action against all other similar cases.

This post has been edited by klthor: Oct 25 2017, 10:41 AM

lol maybe we should stop spreading fear to small time traders.

http://msiataxjunior.blogspot.my/2011/11/b...s-of-trade.html

have a read and thats it. from what i see, unless you make it like your bread and butter...AKA arms' length transaction. else you are safe.

This post has been edited by klthor: Oct 25 2017, 11:39 AM

well, they can send a letter to your wife to ask for source of 'fund'. once she can prove it, source of fund from you. then they will turn to you to check your income. if your wife shows fund from you 500k, but your income tax form stating 50k a year. good luck.

unless you are super big fish, else they will just look at the facts, logic, evidence and discuss with you and call it a day. big fish, raid, freeze accounts, check transaction yada yada. so far i only eye witness once LHDN raid big fish, i think 2~3 teams consist of 20 lhdn officers and police...raid office, house, and registered office. freeze bank accounts.... really once in a life time.