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Savings and Investments thread
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Except by aligning rates you are effectively making capital gains income.golfaddick said:
Wouldn't make sense. You're mixing to differents elements of tax....capital gains & income.Huskaris said:
Sorry, definitely worded it poorly, my fault.valleynick66 said:
Not sure I follow your definition of deductible in your scenario.Huskaris said:
I have a £100k investment in a business. I would be happy to pay income tax levels on that when I cash it in provided that it becomes deductible on my income tax if it collapses rather than within CGT rules.valleynick66 said:
It would simplify tax to some extent I guess. You are then saying (I guess) I don’t care how you made your money (income) I’m taxing you the same rate as if you are salaried.Huskaris said:CGT equalisation with income tax makes sense to me, it's one of the few taxes I think this government will be looking at that isn't the red meat sort and actually makes sound economic sense too rather than the economic equivalent of the Rwanda policy.It’s equitable.Some will argue it discourages investment I guess.Would it not be (from HMRC) perspective if the business ‘failed’ then when you exited there is no income / proceeds on which to be taxed?
If you are suggesting your initial investment might in that scenario might give you some credit to offset any other income tax I’m less sure they would go with that but who knows.I think the perception they are battling is that the ‘rich’ can be seen to pay tax at a lower rate than the average ‘Joe’ when most of their income doesn’t come from salaried pay.
What I'm saying is that currently if I make an investment of £100k and it fails (and by that I mean I lose £100k because it has collapsed), I effectively get £100k CGT relief, that's useless to me. What I would want if we are equalising treatment is for that £100k loss to go against my declarable income tax. Ie if I earn £150k PAYE, my taxable income is only £50k that year.
To me that seems fair and would keep me wanting to make investments in small businesses.
After all, if we are leveling the playing field, we need to do it properly....
You can already offset losses against gains.....with those losses being carried over to future years if you have no gains to offset against
In your scenario people would be investing in all sorts of loss making businesses just to reduce or nullify income tax. The country would go to pieces with little tax being taken from higher earners.
not sure your last part holds water. So I invest £100m and make £25m, but rather than pay 45% tax on the £25m I’ll invest money elsewhere and lose £25m so I don’t have to pay tax …… net effect I’ve made nothing rather than nearly £14m as I didn’t want to give the tax man £11m.0 -
Yes, an EIS will give 30% tax relief.....not 100% !Huskaris said:
But you'd lose still lose the "net" amount... Ie of that £100k loss, you would still lose more than you gain in most cases.golfaddick said:
Wouldn't make sense. You're mixing to differents elements of tax....capital gains & income.Huskaris said:
Sorry, definitely worded it poorly, my fault.valleynick66 said:
Not sure I follow your definition of deductible in your scenario.Huskaris said:
I have a £100k investment in a business. I would be happy to pay income tax levels on that when I cash it in provided that it becomes deductible on my income tax if it collapses rather than within CGT rules.valleynick66 said:
It would simplify tax to some extent I guess. You are then saying (I guess) I don’t care how you made your money (income) I’m taxing you the same rate as if you are salaried.Huskaris said:CGT equalisation with income tax makes sense to me, it's one of the few taxes I think this government will be looking at that isn't the red meat sort and actually makes sound economic sense too rather than the economic equivalent of the Rwanda policy.It’s equitable.Some will argue it discourages investment I guess.Would it not be (from HMRC) perspective if the business ‘failed’ then when you exited there is no income / proceeds on which to be taxed?
If you are suggesting your initial investment might in that scenario might give you some credit to offset any other income tax I’m less sure they would go with that but who knows.I think the perception they are battling is that the ‘rich’ can be seen to pay tax at a lower rate than the average ‘Joe’ when most of their income doesn’t come from salaried pay.
What I'm saying is that currently if I make an investment of £100k and it fails (and by that I mean I lose £100k because it has collapsed), I effectively get £100k CGT relief, that's useless to me. What I would want if we are equalising treatment is for that £100k loss to go against my declarable income tax. Ie if I earn £150k PAYE, my taxable income is only £50k that year.
To me that seems fair and would keep me wanting to make investments in small businesses.
After all, if we are leveling the playing field, we need to do it properly....
You can already offset losses against gains.....with those losses being carried over to future years if you have no gains to offset against
In your scenario people would be investing in all sorts of loss making businesses just to reduce or nullify income tax. The country would go to pieces with little tax being taken from higher earners.
Your argument around people investing in loss making businesses to reduce income tax must hold with CGT too in that case. People will be investing in loss making businesses to reduce or nullify CGT...
It all stems from a real life scenario for me, where investing in a business we had to decide if it's a 3 year loan (interest would come under income tax, if the company went under, that principal would be deductible from earnings) for 3 years at 13%, or we do an advanced subscription agreement which converts to shares at a 39% discount when a sale happens. Any gains from that are taxed at CGT levels, but if it all implodes all I get is a CGT credit, I don't have anything else in my life that's going to attract CGT.
Enterprise investment schemes already have what I have stated above. If I invest through an EIS scheme there's 30% income tax relief on the way in, but if it implodes losses can be offset against income. Seed Enterprise investment schemes is 50% on the way in I believe, so there is precedence for this.0 -
Rob7Lee said:
Except by aligning rates you are effectively making capital gains income.golfaddick said:
Wouldn't make sense. You're mixing to differents elements of tax....capital gains & income.Huskaris said:
Sorry, definitely worded it poorly, my fault.valleynick66 said:
Not sure I follow your definition of deductible in your scenario.Huskaris said:
I have a £100k investment in a business. I would be happy to pay income tax levels on that when I cash it in provided that it becomes deductible on my income tax if it collapses rather than within CGT rules.valleynick66 said:
It would simplify tax to some extent I guess. You are then saying (I guess) I don’t care how you made your money (income) I’m taxing you the same rate as if you are salaried.Huskaris said:CGT equalisation with income tax makes sense to me, it's one of the few taxes I think this government will be looking at that isn't the red meat sort and actually makes sound economic sense too rather than the economic equivalent of the Rwanda policy.It’s equitable.Some will argue it discourages investment I guess.Would it not be (from HMRC) perspective if the business ‘failed’ then when you exited there is no income / proceeds on which to be taxed?
If you are suggesting your initial investment might in that scenario might give you some credit to offset any other income tax I’m less sure they would go with that but who knows.I think the perception they are battling is that the ‘rich’ can be seen to pay tax at a lower rate than the average ‘Joe’ when most of their income doesn’t come from salaried pay.
What I'm saying is that currently if I make an investment of £100k and it fails (and by that I mean I lose £100k because it has collapsed), I effectively get £100k CGT relief, that's useless to me. What I would want if we are equalising treatment is for that £100k loss to go against my declarable income tax. Ie if I earn £150k PAYE, my taxable income is only £50k that year.
To me that seems fair and would keep me wanting to make investments in small businesses.
After all, if we are leveling the playing field, we need to do it properly....
You can already offset losses against gains.....with those losses being carried over to future years if you have no gains to offset against
In your scenario people would be investing in all sorts of loss making businesses just to reduce or nullify income tax. The country would go to pieces with little tax being taken from higher earners.
not sure your last part holds water. So I invest £100m and make £25m, but rather than pay 45% tax on the £25m I’ll invest money elsewhere and lose £25m so I don’t have to pay tax …… net effect I’ve made nothing rather than nearly £14m as I didn’t want to give the tax man £11m.Agreed - all income is income is income!IncomePAYESelf Employed Income via Self-AssessmentPensionsDividendsInterestEtc...Then CGT - sale of certain assets*, shares etc - taxed on the capital gain in the year realised, tax offset relief on any capital loss in the year realised. Perhaps no carry over.*this would not include any assets that naturally depreciate e.g. most cars! Sale of main residence would as now be excluded. And growth in investments wrapped up in pension savings (DC schemes and Sipps) would as now be excluded from CGT.With up to 45% relief on CGT losses it would for example encourage investment in start-ups and encourage non-cash investment savings.2 -
If it collapses, the whole amount is deductible for income tax calcs... If it succeeds, you still get the 30% relief on the way in. But if it fails... 100%... Is deductible.golfaddick said:
Yes, an EIS will give 30% tax relief.....not 100% !Huskaris said:
But you'd lose still lose the "net" amount... Ie of that £100k loss, you would still lose more than you gain in most cases.golfaddick said:
Wouldn't make sense. You're mixing to differents elements of tax....capital gains & income.Huskaris said:
Sorry, definitely worded it poorly, my fault.valleynick66 said:
Not sure I follow your definition of deductible in your scenario.Huskaris said:
I have a £100k investment in a business. I would be happy to pay income tax levels on that when I cash it in provided that it becomes deductible on my income tax if it collapses rather than within CGT rules.valleynick66 said:
It would simplify tax to some extent I guess. You are then saying (I guess) I don’t care how you made your money (income) I’m taxing you the same rate as if you are salaried.Huskaris said:CGT equalisation with income tax makes sense to me, it's one of the few taxes I think this government will be looking at that isn't the red meat sort and actually makes sound economic sense too rather than the economic equivalent of the Rwanda policy.It’s equitable.Some will argue it discourages investment I guess.Would it not be (from HMRC) perspective if the business ‘failed’ then when you exited there is no income / proceeds on which to be taxed?
If you are suggesting your initial investment might in that scenario might give you some credit to offset any other income tax I’m less sure they would go with that but who knows.I think the perception they are battling is that the ‘rich’ can be seen to pay tax at a lower rate than the average ‘Joe’ when most of their income doesn’t come from salaried pay.
What I'm saying is that currently if I make an investment of £100k and it fails (and by that I mean I lose £100k because it has collapsed), I effectively get £100k CGT relief, that's useless to me. What I would want if we are equalising treatment is for that £100k loss to go against my declarable income tax. Ie if I earn £150k PAYE, my taxable income is only £50k that year.
To me that seems fair and would keep me wanting to make investments in small businesses.
After all, if we are leveling the playing field, we need to do it properly....
You can already offset losses against gains.....with those losses being carried over to future years if you have no gains to offset against
In your scenario people would be investing in all sorts of loss making businesses just to reduce or nullify income tax. The country would go to pieces with little tax being taken from higher earners.
Your argument around people investing in loss making businesses to reduce income tax must hold with CGT too in that case. People will be investing in loss making businesses to reduce or nullify CGT...
It all stems from a real life scenario for me, where investing in a business we had to decide if it's a 3 year loan (interest would come under income tax, if the company went under, that principal would be deductible from earnings) for 3 years at 13%, or we do an advanced subscription agreement which converts to shares at a 39% discount when a sale happens. Any gains from that are taxed at CGT levels, but if it all implodes all I get is a CGT credit, I don't have anything else in my life that's going to attract CGT.
Enterprise investment schemes already have what I have stated above. If I invest through an EIS scheme there's 30% income tax relief on the way in, but if it implodes losses can be offset against income. Seed Enterprise investment schemes is 50% on the way in I believe, so there is precedence for this.
If anything I'm more convinced now, CGT and income tax should merge into one. Basically scrap CGT and tax any gains/losses as income.
Just in case there is any confusion to what I'm saying, I'm saying if I lose £100k, not that I should get £100k of tax back, but that my taxable income on which the tax I pay is calculated should drop by £100k.2 -
IdleHans said:
I bought a few in May at £8.48 so I'm pleased with the capital growth, though I bought them to generate a bit of ISA income. But it's pin sticking on my part, and the fact I had no banking shares in my investments. (Plenty of insurers though - L&G, Aviva, Phoenix, all doing fairly well with similarly chunky dividends)PragueAddick said:OK. Not asking for recommendations, but certainly informed viewpoints.
HSBC. Thinking of buying, as an income stock. As a retail customer I definitely have the feeling they have got their act together, although the app remains disappointingly limited. But retail is just one part of their biz. Currently they are trading at 931p. I missed the chance to get in at 875p. a few weeks back when I first thought of it.
How do those who know the banking sector well (e.g @TelMc32) see their prospects?
As an aside, one of my friends is an analyst at RBC and when I mentioned I'd bought them, she said "What did you do that for?". The conversation moved on, but hindsight has validated my purchase. I might follow up with her.I did speak to my mate over the weekend and remembered to ask her the reason for her lack of enthusiasm for HSBC (back in May), though we were several pints in by then. Nothing wrong with HSBC (phew) but she sees the prospects for NatWest as being better given the focus of their activity. She did expand on her reasoning, but I am poor at retaining information after beer has been taken.So I asked chatgpt for a comparison of prospects and it seemed to come down more on the side of HSBC, but given the price target it gave me for Natwest has already been surpassed in real life, I dont set much store by it.
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I see more feelers are being put out by The Treasury re what could be in the budget.
Fast in the heels of yesterdays "leaks" about Stamp Duty being paid by the sellers rather than the buyers I've just seen in Newsnight that they are thinking about bringing in CGT on residential property over £1.5m. I think this will be in line with CGT being aligned to your marginal rate of income tax as well.0 -
Hopefully it means stamp duty is removed from existence completely - including stamp duty on buying shares on LSE. Bit of a weird tax tbh, never really made sense to tax the buyer and not the seller.3
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I can't see it, how would you calculate the gain? Can I offset everything I've spent on it? Refurbishment, maintenance, interest etc etc like you can with your non main residence?golfaddick said:I see more feelers are being put out by The Treasury re what could be in the budget.
Fast in the heels of yesterdays "leaks" about Stamp Duty being paid by the sellers rather than the buyers I've just seen in Newsnight that they are thinking about bringing in CGT on residential property over £1.5m. I think this will be in line with CGT being aligned to your marginal rate of income tax as well.
Stamp duty paid by sellers will just see an overnight increase in house prices which is the last thing we need.0 -
I don't like this "we need more money so we will raise taxes" for obvious reasons however what I don't understand is how the most senior person in the country regarding the economy doesnt understand the economic damage raising taxes does
They need to have a serious look at the tax on dividends, thats absurd how low that is then CGT as well. Agree with @Diebythesword regarding stamp duty, that is disgraceful.
I wouldn't mind as much if they showed us their working out I suppose. For example putting a penny on income tax for a set period of time because they need to cover the cost of ABC or XYZ. If you want more money at work to buy something you normally have to submit a business case
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Very interested in the whispers about potentially replacing council tax with a land value tax. Any thoughts?0
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Depends how it works, I've only heard rumours so couldn't say one way or the other. I'm sure it will be sold as those who own higher value land pay more than someone who lives in a shithole but it wasn't that long ago Tufnell Park was a shithole, and now its oddly desirable.Diebythesword said:Very interested in the whispers about potentially replacing council tax with a land value tax. Any thoughts?
I'm not against paying my share but I am against blindly handing money over to governments or local authorities for them to waste it and subsidise things like water utility private businesses shareholder dividends. Or in the case of LA's, to reduce what we get for the money they are given yet be told we need to give them more1 -
Won't be pleasant for those of us who own property in the south east. But probably the right thing to do imo. Council tax valuations are the dumbest thing I've ever seenDiebythesword said:Very interested in the whispers about potentially replacing council tax with a land value tax. Any thoughts?0 -
But won't a new land value tax (valuations) become equally as dumb as the council tax valuations? Won't it mean valuing every property in the UK, much like the council tax did many moons ago? (I'm old enough to remember the pre Council tax - the poll tax).cantersaddick said:
Won't be pleasant for those of us who own property in the south east. But probably the right thing to do imo. Council tax valuations are the dumbest thing I've ever seenDiebythesword said:Very interested in the whispers about potentially replacing council tax with a land value tax. Any thoughts?2 -
This is my main concern - who will value your property? Will it just be on value last sold for, in which it’ll create an incentive for older people to stay in larger homes, Will it only apply to freeholders? Although freeholders have been having a free lunch for years, it’ll screw over those that have bought a share of their freehold if they’ve bought a flat.Rob7Lee said:
But won't a new land value tax (valuations) become equally as dumb as the council tax valuations? Won't it mean valuing every property in the UK, much like the council tax did many moons ago? (I'm old enough to remember the pre Council tax - the poll tax).cantersaddick said:
Won't be pleasant for those of us who own property in the south east. But probably the right thing to do imo. Council tax valuations are the dumbest thing I've ever seenDiebythesword said:Very interested in the whispers about potentially replacing council tax with a land value tax. Any thoughts?0 -
Can't imagine it'll be on the last sold price, for some people that could be 50 years ago and a few thousand pounds.Diebythesword said:
This is my main concern - who will value your property? Will it just be on value last sold for, in which it’ll create an incentive for older people to stay in larger homes, Will it only apply to freeholders? Although freeholders have been having a free lunch for years, it’ll screw over those that have bought a share of their freehold if they’ve bought a flat.Rob7Lee said:
But won't a new land value tax (valuations) become equally as dumb as the council tax valuations? Won't it mean valuing every property in the UK, much like the council tax did many moons ago? (I'm old enough to remember the pre Council tax - the poll tax).cantersaddick said:
Won't be pleasant for those of us who own property in the south east. But probably the right thing to do imo. Council tax valuations are the dumbest thing I've ever seenDiebythesword said:Very interested in the whispers about potentially replacing council tax with a land value tax. Any thoughts?0 -
Exactly why it would be bad and encourage people to live in far too large a house. But the point remains - how will it be valued? Can’t imagine “average local prices” would be a good way either - effectively outsourcing tax thresholds to unqualified estate agents.Rob7Lee said:
Can't imagine it'll be on the last sold price, for some people that could be 50 years ago and a few thousand pounds.Diebythesword said:
This is my main concern - who will value your property? Will it just be on value last sold for, in which it’ll create an incentive for older people to stay in larger homes, Will it only apply to freeholders? Although freeholders have been having a free lunch for years, it’ll screw over those that have bought a share of their freehold if they’ve bought a flat.Rob7Lee said:
But won't a new land value tax (valuations) become equally as dumb as the council tax valuations? Won't it mean valuing every property in the UK, much like the council tax did many moons ago? (I'm old enough to remember the pre Council tax - the poll tax).cantersaddick said:
Won't be pleasant for those of us who own property in the south east. But probably the right thing to do imo. Council tax valuations are the dumbest thing I've ever seenDiebythesword said:Very interested in the whispers about potentially replacing council tax with a land value tax. Any thoughts?0 -
And at that point I give it a hard noDiebythesword said:
Exactly why it would be bad and encourage people to live in far too large a house. But the point remains - how will it be valued? Can’t imagine “average local prices” would be a good way either - effectively outsourcing tax thresholds to unqualified estate agents.Rob7Lee said:
Can't imagine it'll be on the last sold price, for some people that could be 50 years ago and a few thousand pounds.Diebythesword said:
This is my main concern - who will value your property? Will it just be on value last sold for, in which it’ll create an incentive for older people to stay in larger homes, Will it only apply to freeholders? Although freeholders have been having a free lunch for years, it’ll screw over those that have bought a share of their freehold if they’ve bought a flat.Rob7Lee said:
But won't a new land value tax (valuations) become equally as dumb as the council tax valuations? Won't it mean valuing every property in the UK, much like the council tax did many moons ago? (I'm old enough to remember the pre Council tax - the poll tax).cantersaddick said:
Won't be pleasant for those of us who own property in the south east. But probably the right thing to do imo. Council tax valuations are the dumbest thing I've ever seenDiebythesword said:Very interested in the whispers about potentially replacing council tax with a land value tax. Any thoughts?
Estate agents are one of the only things in the UK who need to be regulated and tightly not given more freedom to take the absolute piss2 -
How the fuck does that work you paid more for your property in the first place by being down south2
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I think we are all guessing, personally I'd have thought any new tax like this is some years off and may go through numerous iterations before/if it was implemented.northstandsteve said:How the fuck does that work you paid more for your property in the first place by being down south1 -
So looks like we might get to pay stamp duty on the same property twice. Not sure how land tax will work but I am seriously contemplating selling off our rental properties so I don't get fucked over any further.0
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also rumours of CGT on private homes... which seems absolutely bonkers to me and surely impossible to introduce on any purchases that have already taken place as people just don't record-keep in respect of their own homes0
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So sounds like it’s working as intended?red10 said:So looks like we might get to pay stamp duty on the same property twice. Not sure how land tax will work but I am seriously contemplating selling off our rental properties so I don't get fucked over any further.3 -
not for red10's tenants though who were also one of the new govt's priorities (not specifically red10's , but PRS tenants in general)Diebythesword said:
So sounds like it’s working as intended?red10 said:So looks like we might get to pay stamp duty on the same property twice. Not sure how land tax will work but I am seriously contemplating selling off our rental properties so I don't get fucked over any further.0 -
Selling off of Rented properties is not helping anyone, there's still a massive shortage in a lot of areas, and just because a once rented property is sold doesn't magically mean said tenants can suddenly buy..Diebythesword said:
So sounds like it’s working as intended?red10 said:So looks like we might get to pay stamp duty on the same property twice. Not sure how land tax will work but I am seriously contemplating selling off our rental properties so I don't get fucked over any further.
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Diebythesword said:
So sounds like it’s working as intended?red10 said:So looks like we might get to pay stamp duty on the same property twice. Not sure how land tax will work but I am seriously contemplating selling off our rental properties so I don't get fucked over any further.I offer a good property at a decent rate, take all the risk of a bad trashing tenant, which we have had twice and cost thousands to resolve and as said before, stamp duty has been paid, CGT will be paid on sale, why do you think that it's a good idea to pay stamp tax again?Buy a property under the original laws and framework that's how it should be. Change the rules afterwards for another purchase then the new framework applies. People can then make an informed choice as to what to do.
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Well the market likes something as the FTSE is currently up 1.17% at 9296. Bucking the trend as most European markets are down and so is the S&P500.0
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It's because I just bought some more in the NASDAQ and also topped my premium bonds back up to the maximumgolfaddick said:Well the market likes something as the FTSE is currently up 1.17% at 9296. Bucking the trend as most European markets are down and so is the S&P500.
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My novices take is, I think there is a degree of certainty with a few large British institutionional businesses. They have mostly embraced AI with a degree of success and have streamlined (made cuts) but also turned half decent profits in the face of a challenging economy
More likely is the US is going to be up and down all the while Trump is there and nobody can guess that he has done regarding Ukraine and Russia. As much as the markets are starting to work him out he is still unpredictable to box office levels. So people are taking the UK as a safer bet
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Pretty sure these CGT on primary homes will go down very badly and end up being reversed either by Labour or subsequent governments.
I feel like the "wealthy" whatever that means are being potentially targeted through several different taxes at the same time.
Had my best mate tell me he is going to move to Luxembourg with his wife at the weekend, was a real surprise to me to be honest but he said it was a no brainer.
On about £150k, which is about £58k of income tax/NI. A shame really.0 -
We lost £10bn in the end on the return of NW to private ownership. Reeves could plug a big hole by raising their bank levy until at least most of that is repaid.6
