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Re: [sharechat] Cullen to Introduce Wealth Tax - & TTP

From: Derek <>
Date: Sun, 24 Feb 2002 09:28:32 +1300

Thanks for your comments.

If it only applies to listed investments I wonder if there will be a
run of unlisted companies raising funds on the grey market. As a holder
of Ilion I wonder if I would have to pay tax on that holding, I can't 
see how since I have no idea what the current valuation is.

Your mention of non-attributing losses is interesting, at the moment risky
investments are in fact subsidised by the Govt to the value of say 36% or
whatever a persons marginal tax rate is (that is if they bomb). In this
way I believe that risky investments are not as risky as many people think
and in fact I have found value in this. 

On the other hand risk would be rewarded in the Risk Free Return Method
formula (as long as the capital gains element is eliminated), providided
that the investments were a success. 

Given this I imagine that the possible changes are about neutral as far
as riskier investments are concerned. 

If the proposed changes only apply to listed investments then as you
say this will distort the market. It would be better to by a house and
get a capital gain free return than buy a 'safe' share with a 5% yield.

Many people may think that shares are just not worth it any more, 
especially if they are not traders but the buy-and-hold type (since they
would not have been paying tax on capital gains but would now have
to pay tax on their holdings regardless) and put their money elsewhere. 
This may herald the death of the NZSE.


On TTP -

>But don't string me up if the management is still so incompetent 
>they can't run a corner dairy. 

Also Hugh, as you eluded to, would you buy shares in a company where
the management just tried to rip-off all the minority shareholders ?

TTP should be de-listed for lowering the tone if nothing else ! 


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