My Godmother would always quote, "There's no point being the richest person in the grave yard." after she saw some article about fights over money or people caught defrauding the tax man.
Some peoples' attitude to tax is worth 1,000 studies.
Best example, post October 1987 stock market crash (Australia down nearly 50%) - as we were the only fund manager to out-perform and get positive returns for the Dec qtr 87 - super fund trustees wanted to know why we were projecting paying tax while their other fund managers had said they'd not pay tax for a couple of years!
Answered as diplomatically (but extremely frustratedly) meeting after meeting for the next two years - as we had out-performed and INCREASED the value of their super fund - there would be some tax payable. The reason their other fund managers were 'providing a tax holiday' was that they had lost in excess of 25% of the money they managed. So until they achieved around 40% performance (making up the lost ground from 75% back to break even 100% AND a bit more to offset the dividend imputation credits) they had substantial tax losses. Due to some effective purchasing of hybrid instruments the 'extreme' tax rate we ended up paying was just under 2% - yet they complained!
As it turned out many managers got badly whip-sawed. Selling out in the aftermath of the 87 crash, raising cash levels massively as we were going to have a 1929-style depression -so they then missed a big chunk of the rebound. One manager, Equitlink, even took out full-page adverts in all the major daily papers and AFR etc - saying that no client of theirs would be paying the super tax for at least the next three years. Guess why?
