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  • FIRST POST
    • michaels
    • By michaels 2nd Jun 17, 11:10 PM
    • 19,456Posts
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    michaels
    Protecting pensions from politicians - or preparing for a Labour coalition
    • #1
    • 2nd Jun 17, 11:10 PM
    Protecting pensions from politicians - or preparing for a Labour coalition 2nd Jun 17 at 11:10 PM
    It is not hard to remember Gordon Brown's first tax raid - his pension tax was one of the big reason that final salary pensions were stopped and many existing schemes are underfunded.

    I can't see the much further left Momentum crew not planning something much more draconian - especially as higher taxes for top earners would otherwise see even more incentives for income diversion into pensions. And of course his backers in the public sector unions are protected with the only remaining final salary schemes so a win win for the union barons.

    So highly likely is a removal of higher rate tax relief
    Also likely is a reduction in the lifetime allowance and no indexation

    What else?
    The high annual isa allowance could be cut (ordinary people can't save 20k pa) and the lifetime isa helping those who can save doesn't really fit with Labour values.

    And what about the tax free lump sum, doesn't seem very progressive so could it he stopped altogether or perhaps capped at say 50k

    And if things go badly weong how about the Hungarian example where private pension pots were 'nationalised' i.e. confiscated.

    So what is the answer - stuff isas now? Bitcoin and physical gold?!
    Cool heads and compromise
Page 7
    • zagfles
    • By zagfles 7th Jun 17, 8:33 PM
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    • 10,354 Thanks
    zagfles
    That just says what will happen, not how which was my question.

    Say the house is worth £300K and the occupant needs home care for a few years (say £30K) and then spends two years in a nursing home (£100K).

    OK they do not have to sell their home. But will the state advance the £130K as an interest free loan and recovered this on the sale of the property? Or will the state add 10% interest to this? Or will the state simply expect you to take out a loan from an insurance company that pays off the care costs as with equity release?

    Either it will add to public spending or it will just force people to accept the terms of equity release firms There is nowt in the manifesto about HOW. Either way it could cost more than £130K when interest and profit is added and it may just mean that it is better to sell the house.
    Originally posted by BobQ
    You do understand that now, under current rules which have been in place for decades, that £100k of that £130k cost in your example is already means tested against the value of the house? As that's care home costs. The proposed change is to the at-home care costs, ie £30k of the £130k in your example.

    The manifesto quote above says "we will extend the current freedom to defer payments for residential care to those receiving care at home". So just look up the current rules for deferred payments if you're really interested rather than just trying to use this as a political football. Here you go:

    https://www.moneyadviceservice.org.uk/en/articles/deferred-payment-agreements-for-long-term-care
    • pollypenny
    • By pollypenny 9th Jun 17, 3:49 PM
    • 22,613 Posts
    • 58,111 Thanks
    pollypenny
    If Labour win, I will ask my financial advisor to organise my assets into an account on the Isle of Man.

    I'm already drawing Pensions - State and LGPS.
    Originally posted by seven-day-weekend


    I'm shocked you even think that, SDW. I believe that you are a Christian, but how the heck does this square with Christian teaching.

    Render unto Caesar that which is Caesar's. ie , pay your taxes, in order to help those less fortunate than you.

    And my mantra, sorry I have to post it again - a mature adult in a democracy pays her taxes.
    Member #14 of SKI-ers club

    Words, words, they're all we have to go by!.

    (Pity they are mangled by this autocorrect!)
    • seven-day-weekend
    • By seven-day-weekend 9th Jun 17, 4:21 PM
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    seven-day-weekend
    I'm shocked you even think that, SDW. I believe that you are a Christian, but how the heck does this square with Christian teaching.

    Render unto Caesar that which is Caesar's. ie , pay your taxes, in order to help those less fortunate than you.

    And my mantra, sorry I have to post it again - a mature adult in a democracy pays her taxes.
    Originally posted by pollypenny
    I have said repeatedly that I am not talking about paying my taxes. I am quite happy to pay my taxes. I just had some naif idea that I could take my savings and put them there, so the a Marxist Government could not take them off me. I realise now that it was a bit of a silly comment. Haven't you ever opened your mouth without thinking?

    Anyway I have been yellow carded because someone on this thread reported me, so I don't wish to say any more.
    To love someone is to learn the song in their heart and to sing it to them when they have forgotten it
    'I believe in Christianity as I believe that the sun has risen. Not only because I see it, but because I see everything by it': C.S. Lewis
    St. Augustine — 'In essentials, unity; in non-essentials, liberty; in all things, charity.'
    • Malthusian
    • By Malthusian 9th Jun 17, 4:58 PM
    • 3,054 Posts
    • 4,416 Thanks
    Malthusian
    how the heck does this square with Christian teaching.
    Originally posted by pollypenny
    If putting your money in an Isle of Man account was actually an effective way of avoiding tax, then it would square with Christian teaching in exactly the same way as putting your money into an ISA or a pension does. No man is obliged to order his affairs in order to maximise that which is Caesar's. I am not aware of any Christian teaching that conflicts with common law in this regard.

    The problem is not Christian teaching but the fact that putting your money offshore does not actually reduce Caesar's due for most UK residents.
    • thepurplepixie
    • By thepurplepixie 9th Jun 17, 7:29 PM
    • 674 Posts
    • 1,200 Thanks
    thepurplepixie
    I have said repeatedly that I am not talking about paying my taxes. I am quite happy to pay my taxes. I just had some naif idea that I could take my savings and put them there, so the a Marxist Government could not take them off me. I realise now that it was a bit of a silly comment. Haven't you ever opened your mouth without thinking?

    Anyway I have been yellow carded because someone on this thread reported me, so I don't wish to say any more.
    Originally posted by seven-day-weekend
    What does yellow carded mean?
    • seven-day-weekend
    • By seven-day-weekend 9th Jun 17, 7:40 PM
    • 29,491 Posts
    • 55,145 Thanks
    seven-day-weekend
    What does yellow carded mean?
    Originally posted by thepurplepixie
    Same as it does in football.
    To love someone is to learn the song in their heart and to sing it to them when they have forgotten it
    'I believe in Christianity as I believe that the sun has risen. Not only because I see it, but because I see everything by it': C.S. Lewis
    St. Augustine — 'In essentials, unity; in non-essentials, liberty; in all things, charity.'
    • thepurplepixie
    • By thepurplepixie 9th Jun 17, 8:20 PM
    • 674 Posts
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    thepurplepixie
    Same as it does in football.
    Originally posted by seven-day-weekend
    Means nothing to me, I'm not a football fan.
    • pollypenny
    • By pollypenny 10th Jun 17, 11:41 AM
    • 22,613 Posts
    • 58,111 Thanks
    pollypenny
    If putting your money in an Isle of Man account was actually an effective way of avoiding tax, then it would square with Christian teaching in exactly the same way as putting your money into an ISA or a pension does. No man is obliged to order his affairs in order to maximise that which is Caesar's. I am not aware of any Christian teaching that conflicts with common law in this regard.

    The problem is not Christian teaching but the fact that putting your money offshore does not actually reduce Caesar's due for most UK residents.
    Originally posted by Malthusian


    No, it doesn't equate to using an ISA. To stash money in the IOM requires considerable contrivance, rather than walking into your bank.

    The situation of the IOM and Channels Islands is an anomaly, anyway.
    Member #14 of SKI-ers club

    Words, words, they're all we have to go by!.

    (Pity they are mangled by this autocorrect!)
    • EnglishMohican
    • By EnglishMohican 10th Jun 17, 4:57 PM
    • 164 Posts
    • 85 Thanks
    EnglishMohican
    ...... To stash money in the IOM requires considerable contrivance, ......
    Originally posted by pollypenny
    I am intrigued that you know that. Presumably you have investigated how to do it? I wonder why?
    • woolly_wombat
    • By woolly_wombat 12th Jun 17, 1:17 PM
    • 483 Posts
    • 286 Thanks
    woolly_wombat
    Protecting pensions from politicians - in a hung parliament
    So what is the answer - stuff isas now?
    Originally posted by michaels
    Anne Ashworth, writing in the Times (behind paywall) has been urging folk to utilise pension and ISA breaks sooner rather than later:
    https://www.thetimes.co.uk/article/its-time-to-be-your-own-chancellor-gwlndl503

    "As we predicted last week, the pension tax reliefs may be reduced again, since the government will require funds to reverse the austerity measures that so displeased a large swathe of the electorate.

    The better-paid should expect the pension contributions caps — the £1 million lifetime allowance and the £40,000 annual allowance — to be lowered once more......

    In light of possible tax rises, this is the moment to be thankful for Isa-fication, the era between 2010 and 2016 when individual savings accounts of various types were the answer to the thrift deficit.

    Since Mr Hammond may not be keen on these schemes, take time to explore Isa opportunities in depth......
    "

    Anyone who can afford to do so might like to utilise these tax breaks sooner rather than later.

    Particularly now that Paul Lewis of Moneybox has written in the FT that ISAs should be abolished since they only benefit the better off!
    • jamesperrett
    • By jamesperrett 12th Jun 17, 1:46 PM
    • 661 Posts
    • 327 Thanks
    jamesperrett
    I am intrigued that you know that. Presumably you have investigated how to do it? I wonder why?
    Originally posted by EnglishMohican
    30 years ago the big banks all had offshore operations allow people to avoid tax - and we're not talking about only well off people. So anyone that has been saving for a while would probably know about offshore accounts and how things have changed. I remember covering them in my O level economics.
    • Linton
    • By Linton 12th Jun 17, 1:48 PM
    • 8,327 Posts
    • 8,221 Thanks
    Linton
    ........
    Particularly now that Paul Lewis of Moneybox has written in the FT that ISAs should be abolished since they only benefit the better off!
    Originally posted by woolly_wombat
    Seems a perfect justifiable argument to at least impose significant restrictions on the amount of money one can shield from tax in this way. I see no good reason why someone earning £30K/year should pay over £6K in income tax and NI whereas someone receiving £30K/year from ISA'd investments should pay nothing.

    ISAs were once just an ecouragement for the average person to save a bit, now they are a opportunity for major tax avoidance by the relatively wealthy.
    • justme111
    • By justme111 12th Jun 17, 1:55 PM
    • 2,821 Posts
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    justme111
    How is it tax avoidance - tax already should been paid on the income which been saved and generates further income.
    • Linton
    • By Linton 12th Jun 17, 2:09 PM
    • 8,327 Posts
    • 8,221 Thanks
    Linton
    How is it tax avoidance - tax already should been paid on the income which been saved and generates further income.
    Originally posted by justme111
    What about the tax on the "further income"? The example £30K being withdrawn each year had never been taxed. Even without an ISA, unearned income is taxed less heavily than earned income taking into account NI. Why should that be so? To not tax it at all even if it rises to large amounts seems remarkably generous to people with capital perhaps of £0.5M or more.
    • justme111
    • By justme111 12th Jun 17, 2:41 PM
    • 2,821 Posts
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    justme111
    May be because one may other try to earn more if one will know that further benefits from that money would be taxed again? How many times is it right to tax money which individual has depending on what that individual does with it ? Why not to tax pocket money children get from their parents or any gifts ? Suppose it depends on what kind of society one wants to build. I am sure in so.e of those using ISA would be considered "tax avoidance" and frowned upon. Keeping in mind limited allowance we are not talking about millions which would generate large amounts of tax free income as a result of clever machinations where sky is the limit. If one feels that further taxing those who got 500 k into ISA is the right thing to do then lowering the yearly limit is an option. But wait , it just being raised trying to promote prudence and save rather than spend now and depend on state attitude. For the record I stand no chance accumulating half a million so it is not a matter of self-interest. I agree current 20 k (is it 20 k?) ISA allowance goes beyond encouraging an average member of public to save so I guess it could be halved without affecting the spirit of it. I am not sure it would make much of a difference in a budget though. Introducing taxes on already accumulated ISAs would been extremely unfair as it would be rewriting rules of the game retrospectively and I hope not to ever see it happen.
    • Chrysalis
    • By Chrysalis 12th Jun 17, 4:39 PM
    • 1,985 Posts
    • 916 Thanks
    Chrysalis
    its right as long as the government says its right.

    I would agree with your claims it isnt worth it if its taxed IF the tax was at 100%, but it is not.

    Children do get tax, in the form of VAT.

    I did post earlier saying I think alot of taxes should be removed, and instead just massively raise income taxes. But that was shot down, as people revealed their true colours that they simply dont like paying tax, to them its all about themselves and not society.

    For me I work to provide for myself yes, but I also work to provide for the country. Anyone who thinks otherwise I think is selfish. I personally think I am massively undertaxed, I would happily pay another 10% in income tax.

    There is individuals I know who would rather spend more money than they would pay otherwise just to avoid tax, its all crazy. People are so obsessed with tax its unreal.
    Last edited by Chrysalis; 12-06-2017 at 4:41 PM.
    • EnglishMohican
    • By EnglishMohican 12th Jun 17, 5:45 PM
    • 164 Posts
    • 85 Thanks
    EnglishMohican
    .......
    For me I work to provide for myself yes, but I also work to provide for the country. .........
    Originally posted by Chrysalis
    You are not alone, we all work to provide for the country as short of emigrating, we have no choice in the matter.

    What percentage of tax one pays depends on how much income one has and how much you spend on buying things. So if you happen to earn £10000 per year, then increasing your tax payment by 10% is not very generous.

    If you happen to receive a huge amount of income, then you probably have enough money not to notice the reduction in your standard of living if you paid 10% more tax so still not very generous of you

    If you happen to be on say £22000 and struggling to pay a mortgage, feed and cloth your family while holding down a tough job then paying 10% more tax than at present would be very generous.
    • zagfles
    • By zagfles 12th Jun 17, 7:25 PM
    • 12,350 Posts
    • 10,354 Thanks
    zagfles
    Seems a perfect justifiable argument to at least impose significant restrictions on the amount of money one can shield from tax in this way. I see no good reason why someone earning £30K/year should pay over £6K in income tax and NI whereas someone receiving £30K/year from ISA'd investments should pay nothing.

    ISAs were once just an ecouragement for the average person to save a bit, now they are a opportunity for major tax avoidance by the relatively wealthy.
    Originally posted by Linton
    Money going into an ISA has already been taxed. Dividend income from an ISA is taxed (corporation tax) which can't now be reclaimed, and interest on most cash ISAs is less than inflation so why should people be taxed on an investment which is losing value in real terms?
    • zagfles
    • By zagfles 12th Jun 17, 7:29 PM
    • 12,350 Posts
    • 10,354 Thanks
    zagfles
    its right as long as the government says its right.

    I would agree with your claims it isnt worth it if its taxed IF the tax was at 100%, but it is not.

    Children do get tax, in the form of VAT.

    I did post earlier saying I think alot of taxes should be removed, and instead just massively raise income taxes. But that was shot down, as people revealed their true colours that they simply dont like paying tax, to them its all about themselves and not society.

    For me I work to provide for myself yes, but I also work to provide for the country. Anyone who thinks otherwise I think is selfish. I personally think I am massively undertaxed, I would happily pay another 10% in income tax.

    There is individuals I know who would rather spend more money than they would pay otherwise just to avoid tax, its all crazy. People are so obsessed with tax its unreal.
    Originally posted by Chrysalis
    Yes and the Labour manifesto really epitomised this selfishness - "we'll massively raise public spending but someone else will pay for it - we won't raise taxes on you" (unless you're on the top 5%).

    The IFS shot their figures to bits and pointed out that the only way they'd achieve the spending increases they want is to raise taxes on ordinary people, but of course people are too selfish to vote for that so they didn't propose it.
    • Keep pedalling
    • By Keep pedalling 12th Jun 17, 9:16 PM
    • 3,746 Posts
    • 4,013 Thanks
    Keep pedalling
    Money going into an ISA has already been taxed. Dividend income from an ISA is taxed (corporation tax) which can't now be reclaimed, and interest on most cash ISAs is less than inflation so why should people be taxed on an investment which is losing value in real terms?
    Originally posted by zagfles
    We did not pay any tax on much of the nearly £400k we have sitting in our ISAs as some of it was inherited, and some of it has come from capital gains within the ISA and from gains in non ISA investments that have been transfered to it through annual bed and ISA which we can now do to the tune of £40k a year, something the vast majority of people could not possibly benefit from

    2 thirds of the amount of savings held in ISA are still cash, and I am willing to bet that most of that is with the smaller savers who have yet to figure out what a waste of time that is. The large uplift in annual ISA allowances, and the pathetic interest rates that can be earned within cash ISA have shifted the benefits offered by ISAs have deffinately moved to favour the more well off, knowledgable investors like us.
    Last edited by Keep pedalling; 12-06-2017 at 10:25 PM.
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