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Speaker 1: Inland Revenue has announced it's honing in on customers who

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Speaker 1: are dealing in crypto but not declaring the income on

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Speaker 1: the tax returns. Now, Inland Revenue reckons there maybe two

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Speaker 1: hundred and twenty seven thousand unique crypto asset users in

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Speaker 1: New Zealand and they are undertaking around seven million transactions

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Speaker 1: with the value of seven point eight billion dollars. Bruce

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Speaker 1: Binaki is a tax partner at Denton's Kensington Swan and

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Speaker 1: with us Hey Bruce at evening Hea, it's a lot

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Speaker 1: of money. Do you reckon that's on the money?

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Speaker 2: Oh? Look, I do trust it. Id They've got access

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Speaker 2: to a lot of information these days, and certainly and

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Speaker 2: totally when you talk to people out there are no

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Speaker 2: plenty of people who are holding some crypto assets, so

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Speaker 2: not surprised at all.

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Speaker 1: How much tax would they get? Do you think this

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Speaker 1: is the iid?

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Speaker 2: Ah, Look, that is very hard to say, but I

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Speaker 2: think there's millions, possibly even tens of millions at stay here.

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Speaker 2: You only have to look at how high some of

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Speaker 2: the crypto asset prices have gone. You know, you've got

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Speaker 2: bitcoin currently trading at US fifty eight thousand dollars and

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Speaker 2: just four years ago it was nine thousand dollars, So

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Speaker 2: there is some people have been doing very well out

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Speaker 2: of all this crypto trading.

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Speaker 1: Someone called Ben text me before says he's made thousands

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Speaker 1: of bucks off crypto. Didn't even realize he had to

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Speaker 1: pay tax?

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Speaker 2: Is it?

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Speaker 1: I mean, can you get away with pleading ignorance?

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Speaker 2: You probably can't get away with it. No, but but

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Speaker 2: I have a lot of sympathy for that position. And

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Speaker 2: we famously don't have a capital gains tax in New Zealand,

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Speaker 2: and people probably think with crypto it's kind of like,

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Speaker 2: you know, you buy some shares and you sell them

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Speaker 2: a few years later and make a gain and don't

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Speaker 2: pay tax on it. The problem with crypto is, and

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Speaker 2: indeed with any asset, if you're a trader in the

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Speaker 2: asset or you buy it with an intention of resale,

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Speaker 2: any game you make, it's not a capital gain that's taxable.

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Speaker 2: And there's so much trading with crypto, and crypto is

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Speaker 2: not like like a share where you can earn a

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Speaker 2: dividend return off it. So iod's view is that any

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Speaker 2: gains on trading crypto is taxable.

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Speaker 1: Do you believe them when they say that that I mean, well,

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Speaker 1: they say they know that there are two hundred and

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Speaker 1: twenty seven thousand possible people or unique crypto asset users.

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Speaker 1: Do you believe that they know who those people are?

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Speaker 2: I do believe, and I do believe that they've got

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Speaker 2: some very good information they targeted because they have great

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Speaker 2: data mining tools these days, Heather, and they are the

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Speaker 2: most powerful organization pretty much in the country. They're information

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Speaker 2: gathering powers, you know, extend beyond those of the police,

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Speaker 2: and they can request information from banks, and they've entered

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Speaker 2: into international information exchange arrangements with other countries to get

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Speaker 2: information off crypto exchanges operating around the world. Now that

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Speaker 2: doesn't all can until twenty twenty six and twenty twenty seven,

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Speaker 2: but trust me, hither I've got information. Right.

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Speaker 1: So, if you're one of the people who got a

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Speaker 1: letter from them late last year telling them that they're

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Speaker 1: a high risk customer and they need to sort it out,

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Speaker 1: you shouldn't take around.

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Speaker 2: You should sort it out, absolutely, And they've sent out

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Speaker 2: another wave of letters just in the past week or so.

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Speaker 2: So if you're getting those letters, I'd be very concerned,

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Speaker 2: and I'd be getting some advice.

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Speaker 1: Yeah, absolutely, Bruce, Hey, thank you very much, really really

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Speaker 1: fascinating stuff. That's Bruce Spinaki, tax partner at Denton's Kensington Swan.

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