Forum Archive Index - April 2000

["Brian Gale" <xtr125689@xtra.co.nz>]

Title: Carter Holt Harvey

Hi Mark

Just a question on Capital Gains and taxation. To my knowledge if one is a "trader" capital gains (or losses) should be declared in one's IR (whatever) as income. The anomaly comes in the definition of a "trader" i..e. how many transactions in how long a time period - not currently defined.  The alternative title is "investor" which seems to be a person in for the long run.  Wonder if the new 'powers that be' will be having a look at this ?

 

Regards

BG (new boy on the block)

 

----- Original Message -----

From: Mark Hubbard

To: sharechat@sharechat.co.nz

Sent: Friday, April 07, 2000 12:09 PM

Subject: Re: [sharechat] Carter Holt Harvey

 

----- Original Message -----

From: Barney

To: sharechat

Sent: 7 April 2000 10:25 AM

Subject: [sharechat] Carter Holt Harvey

. Unfortunatly though there profits don't cover the dividend payout. Why would a company pay out an unaffordable dividend and again how much attention should be paid to this ???

Some companies have the policy of distributing a constant dividend payout, despite inter-year earnings, on the theory that if shareholders can thus 'bank' on the yearly dividend it will have a stabilising effect on the shareprice. If the dividend amount is constant, then years in which the dividend payout is more than profit are therefore balanced by those years where there are surplus retained earnings over the distributed amount. Ie, it is simply the company's distribution policy.

 

As to how much attention you should pay to it, I guess that really depends on the individual investor. If the investor prefers income in the form of dividend streams, then its probably quite attractive. Those investors, however, who are on the top tax bracket personally (esp. from now on at 39%) will prefer capital gains on their shares rather than taxable income streams, thus, such a policy would not be so attractive.

 

Regards Mark Hubbard