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  • FIRST POST
    • michaels
    • By michaels 2nd Jun 17, 11:10 PM
    • 19,459Posts
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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 8
    • zagfles
    • By zagfles 12th Jun 17, 9:46 PM
    • 12,350 Posts
    • 10,354 Thanks
    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 the transfer of other gains that have been transfered to it through annual bed and ISA which we can now due to the tune of £40k a year, something the vast majority of people could not possibly benefit from
    Originally posted by Keep pedalling
    There's a point re the capital gain within the ISA, which is the main tax break of an ISA for basic rate taxpayers.

    But the other stuff - inheritance is subject to IHT, bed and ISA is subject to CGT. Of course the amounts could be within the respective allowances, but that's an issue with IHT and CGT, not ISAs.

    If you shove an inheritance into an ISA rather than spending it on a world cruise I don't see why you should more tax it (ie the initial capital - as above I take the point about capital gains).
    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.
    Well yes so why consider taxing the pathetic amount of interest earned by cash ISAs when they almost certainly don't even keep up with inflation?

    ISAs also provide simplicity. No need to keep records, have to declare dividends, interest or capital gains on tax returns, tax credits, student loan applications etc.
    • Keep pedalling
    • By Keep pedalling 12th Jun 17, 10:23 PM
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    Keep pedalling
    There's a point re the capital gain within the ISA, which is the main tax break of an ISA for basic rate taxpayers.

    But the other stuff - inheritance is subject to IHT, bed and ISA is subject to CGT. Of course the amounts could be within the respective allowances, but that's an issue with IHT and CGT, not ISAs.

    .
    Originally posted by zagfles
    Inheritances and capital gains are unearned income, it hardly seems fair that you should be able to rake in unlimited amounts of unearned income and pay no tax, when everyone else pays tax on earned income.
    • justme111
    • By justme111 12th Jun 17, 10:30 PM
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    justme111
    I must miss something - how can they be unlimited if there is limited annual ISA allowance?
    • zagfles
    • By zagfles 12th Jun 17, 11:39 PM
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    • 10,354 Thanks
    zagfles
    Inheritances and capital gains are unearned income, it hardly seems fair that you should be able to rake in unlimited amounts of unearned income and pay no tax, when everyone else pays tax on earned income.
    Originally posted by Keep pedalling
    There is inheritance tax and capital gains tax.

    And of course the money inherited would often be saved earned income on which tax would have been paid. Inheritance tax might also have been paid. So do you think it should be taxed a third time as income on the recipient?
    • Anonymous101
    • By Anonymous101 13th Jun 17, 7:28 AM
    • 979 Posts
    • 346 Thanks
    Anonymous101
    There is inheritance tax and capital gains tax.

    And of course the money inherited would often be saved earned income on which tax would have been paid. Inheritance tax might also have been paid. So do you think it should be taxed a third time as income on the recipient?
    Originally posted by zagfles
    Bloody hell at this rate it'll be taxed every time its moved from one form of saving / investment to another!
    • Anonymous101
    • By Anonymous101 13th Jun 17, 7:29 AM
    • 979 Posts
    • 346 Thanks
    Anonymous101
    I must miss something - how can they be unlimited if there is limited annual ISA allowance?
    Originally posted by justme111
    I think the point was that once it was invested into the ISA then any income within and back from the ISA is tax free with no limits.
    • justme111
    • By justme111 13th Jun 17, 7:53 AM
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    justme111
    Going back to the topic and broadening it - I am baffled by democracy as we have it in this country. It is like asking a bunch of 5 y.o. ones to decide how they want to live and what headmaster do they want. Short termism, lies and populism instead of an intelligent debate - or an I missing the latter one and it happens somewhere?
    • atush
    • By atush 13th Jun 17, 9:56 AM
    • 16,296 Posts
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    atush
    I tried explaining income tax to my twin 6 year olds. That didnt go over well.
    • Malthusian
    • By Malthusian 13th Jun 17, 10:04 AM
    • 3,062 Posts
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    Malthusian
    To stash money in the IOM requires considerable contrivance
    Originally posted by pollypenny
    Not at all, you can open an account with Nationwide International or Old Mutual International or the Isle of Man financial provider of your choice by a simple cheque or cash transfer, same as any UK bank.

    To hide money in the IOM would require contrivance but the same would be true of anywhere. *edit* And the IOM would be a very stupid place to attempt to hide money offshore because there are so many reporting channels to HMRC. You would be more likely to successfully hide your money in the UK than in the Isle of Man - by investing in black market enterprises like minicab firms, loansharking, drugs or something.

    Bloody hell at this rate it'll be taxed every time its moved from one form of saving / investment to another!
    by Anonymous101
    Half the country voted for exactly that.
    Last edited by Malthusian; 13-06-2017 at 11:19 AM.
    • seven-day-weekend
    • By seven-day-weekend 13th Jun 17, 10:43 AM
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    seven-day-weekend
    So my idea of hiding my savings wasn't as stupid as I thought it was ......
    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.'
    • woolly_wombat
    • By woolly_wombat 13th Jun 17, 11:11 AM
    • 483 Posts
    • 286 Thanks
    woolly_wombat
    So my idea of hiding my savings wasn't as stupid as I thought it was ......
    Originally posted by seven-day-weekend
    There's a big difference between maximising legal tax shelters such as ISAs and pensions and 'hiding savings'.

    Having said that, some of us are just about old enough to remember a former Shadow Chancellor warning in 1973/74 that there would be "howls of anguish from those rich enough to pay over 75% on their last slice of earnings" and that he would "squeeze property speculators until the pips squeak".

    When he was Chancellor he was forced, in 1976, to go cap-in-hand to the IMF for a loan.
    • seven-day-weekend
    • By seven-day-weekend 13th Jun 17, 11:15 AM
    • 29,493 Posts
    • 55,147 Thanks
    seven-day-weekend
    There's a big difference between maximising legal tax shelters such as ISAs and pensions and 'hiding savings'.

    Having said that, some of us are just about old enough to remember a former Shadow Chancellor warning in 1973/74 that there would be "howls of anguish from those rich enough to pay over 75% on their last slice of earnings" and that he would "squeeze property speculators until the pips squeak".

    When he was Chancellor he was forced, in 1976, to go cap-in-hand to the IMF for a loan.
    Originally posted by woolly_wombat
    Yes, I too am old enough, to remember 'the best Prime Minister we never had' https://en.wikipedia.org/wiki/Denis_Healey
    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 13th Jun 17, 11:26 AM
    • 3,062 Posts
    • 4,420 Thanks
    Malthusian
    A Robin Hood tax would of course affect pensions and ISAs as much as it would unwrapped funds - we can safely assume they would not be able to reclaim it. It would be the Gordon Brown Tax Grab II: Grab Harder.

    The only way to avoid it would be to have your money invested completely offshore. And we return to the problem that investing offshore is usually very tax-inefficient for a UK investor, unless you plan on living offshore as well.
    • Crystal_Pixie
    • By Crystal_Pixie 13th Jun 17, 12:33 PM
    • 47 Posts
    • 18 Thanks
    Crystal_Pixie
    .

    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.
    Originally posted by michaels

    Not quite true - there are some private company final salary schemes that are still very much alive and still in the black.


    Still think pensions are the best investment at the moment.
    • Chrysalis
    • By Chrysalis 13th Jun 17, 1:16 PM
    • 1,985 Posts
    • 916 Thanks
    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.
    Originally posted by EnglishMohican
    so if I understand you correctly, someone earning 22k would be struggling more than someone earning 10k?

    Struggling is not struggling to buy toys, pay for premium tv, or funding a second car, when we talking about bare essentials someone on 22k is not going to be struggling. for reference my average earnings are 15k-20k range.

    Ultimately the more one earns, the less 10% means to them as the other 90% is a bigger number.

    Not to mention the government is not asking for 10%, they not even asking for 1%.

    If you think life is hard on 22k, try living on 5k.
    • atush
    • By atush 13th Jun 17, 3:50 PM
    • 16,296 Posts
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    atush
    And the IOM would be a very stupid place to attempt to hide money offshore because there are so many reporting channels to HMRC.
    The IOM is now FATCA'd up the backside. They give info to any govt that asks. Incl the USA.
    • EnglishMohican
    • By EnglishMohican 13th Jun 17, 6:22 PM
    • 164 Posts
    • 85 Thanks
    EnglishMohican
    so if I understand you correctly, someone earning 22k would be struggling more than someone earning 10k?
    Originally posted by Chrysalis
    If that is your understanding then I suggest you read what I wrote again.

    Effectively, I said that somebody earning £10000 could offer to pay an extra 10% income tax at no cost to themselves. Not really very generous.

    Somebody earning 100k would end up paying an extra £3k (given my maths is roughly right). I am glad you agree with me that that would not reduce their standard of living by anything very basic.

    It is the people in the middle income group (my 22k example) who lose out on the more crucial parts of their standard of living.

    .......for reference my average earnings are 15k-20k range. .......
    Originally posted by Chrysalis
    So in very rough terms you are offering to contribute an extra £100 per year. But we do not know your circumstances to evaluate what that means to you. (I do not expect you to provide them - it would be too intrusive.)
    If you have a recent university degree then on your present salary, the rest of us are going to end up paying for your education - that would not be the case if you earned 22k.
    You pay less NI than somebody on 22k and depending on your situation you kind offer might result in you receiving extra benefits that more than compensate for your £100.

    Clearly, I do not know your circumstances and you could be making a very generous offer - my respect in that case.

    But advocating an increase in income tax when you are at the end of the pay spectrum that is most likely to receive the benefits of that extra government largesse without paying much towards it does not make you a better person than the OP wanting to retain his/her money to allow them to pay their own way.
    • bigadaj
    • By bigadaj 13th Jun 17, 7:52 PM
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    bigadaj
    Tax is rarely popular, but noting that income tax was originally introduced to finance war with the French is popular with some!
    • michaels
    • By michaels 13th Jun 17, 8:13 PM
    • 19,459 Posts
    • 88,992 Thanks
    michaels
    Bloody hell at this rate it'll be taxed every time its moved from one form of saving / investment to another!
    Originally posted by Anonymous101
    You mean like a Robin Hood / Tobin tax?

    The very clear message is that only spending all your money straight away is to be encouraged, any form of saving means you clearly have more money than you need so it should be taxed again (and again etc etc)
    Cool heads and compromise
    • atush
    • By atush 13th Jun 17, 9:04 PM
    • 16,296 Posts
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    atush
    Tax is rarely popular, but noting that income tax was originally introduced to finance war with the French is popular with some!
    Originally posted by bigadaj
    Good one lol.

    Last summer I had to go back to france and my gite and try to explain to my neighbors the whole brexit thing.

    Now they will ask me to explain this debacle. Oh yeah, and the trump thing. That is a whole other sh*t bomb.

    Maybe i shouldnt take my summer holiday? I might spend the whole time trying to explain the unexplainable to french people? My french is OK, but not sure it is good enough for that.
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