Is personal tax optional ?

getmore4less

I seem to recall it is not easy to buy property on IOM that's why it seems cheap.

HappyMJ

chucknorris wrote: »

Yes, as far as I can see there is no way to avoid paying CGT on our properties (that certainly is not optional), but I/we intend to sell anyway. So the CGT can't be avoided, what I am looking at is the best way forward after the CGT payment. Going forward I can bed and breakfast my shares to mitigate CGT when I sell to transfer (unlike the property equity).

Although I have mitigated some CGT recently by switching my shares and locking in a notional loss in that I can carry forward and off-set against future CGT.

I deleted the post that you quoted, because I discovered (I have only just started looking at this) that there was IOM tax legislation introduced in 2006 'Distributable profits charge' which sought to tax people using a limited company to avoid paying tax, by not distrubting company profits. This was later replaced by 'Attribution regime for individuals' which was something along the same lines, this itself looks as if it has been replaced, so it is looking a lot more complicated than I first thought. It may be that we have to wait until (if) we actually relocate there.

Even if the whole idea becomes unworkable, the IOM does have favourable tax rates with only a 10% lower and 20% upper tax band, no stamp duty, no CGT and a 30% tax free lump sum on pensions, that would save us about £35k per annum. But all this is jumping the gun, we might not like the IOM enough to want to live there.

Depending on how much there is you can take advantage of your full CGT allowance each year by selling shares in your property to your partner each tax year then you partner can sell the whole lot once they have 100% of the property after a few years.

chucknorris

HappyMJ wrote: »

Depending on how much there is you can take advantage of your full CGT allowance each year by selling shares in your property to your partner each tax year then you partner can sell the whole lot once they have 100% of the property after a few years.

My wife owns more property than I do (in value), she owns 3 houses in Hackney, I own 4 flats in Battersea and we both jointly own a house in Tottenham Hale. Glad to hear any suggestions but we can't see a way out of paying it, it would take about 120 years to mitigate the CGT by selling shares to each other. My CGT bill will be slightly mitigated by having lived in 3 of them and some losses being carried forward. We could move into them, but we really don't want to move back into London, that might change of course, but I can't see it happening.

chucknorris

getmore4less wrote: »

I seem to recall it is not easy to buy property on IOM that's why it seems cheap.

I know on Guernsey there is a local and foreigner market, are you saying that the IOM also has that? I'll google it.

Nope, the property market is an open one, no homes are reserved for locals:

http://www.ft.com/cms/s/0/1d529eb8-0f8e-11e5-b968-00144feabdc0.html

Thrugelmir

I'd have thought that somewhere like Malta would suit you better Chuck. Far better climate.

chucknorris

Thrugelmir wrote: »

I'd have thought that somewhere like Malta would suit you better Chuck. Far better climate.

I agree, but my wife didn't particularly like Malta, I have already suggested it to her, I liked it enough to have a closer look. We plan to winter in Spain/the Algarve anyway, so the IOM isn't as bad as it first sounds from a weather point of view.

Generali

chucknorris wrote: »

I agree, but my wife didn't particularly like Malta, I have already suggested it to her, I liked it enough to have a closer look. We plan to winter in Spain/the Algarve anyway, so the IOM isn't as bad as it first sounds from a weather point of view.

How can you fail to love an island that won the George Cross?

chucknorris

Generali wrote: »

How can you fail to love an island that won the George Cross?

I really liked Gozo too, but probably a bit too quiet to live there.

N1AK

Generali wrote: »

Not so much in the UK although it is what a lot of people will tell you.

So many things are VAT-free or low VAT that it isn't particularly regressive.

...The rich pay almost all the tax and the poor practically none if you account for benefits.

I fail to see how it's wrong to say VAT us regressive, given that you go on to say it is in the next sentence? Even the IFS who criticised the government for claiming VAT was regressive got their hands burnt because the figures they used actually showed VAT to be regressive.

Your evidence for an overall progressive system is also worryingly misguided. Progressive doesn't mean that the rich pay more tax, it means that their taxation is higher as a proportion of their income.

I happen to agree with you that taxation should be considered holistically, and that for the most part UK taxation is progressive; that doesn't mean I think we should be moving taxation from clearly progressive taxes (income tax) to regressive (VAT) ones.

Generali

N1AK wrote: »

I fail to see how it's wrong to say VAT us regressive, given that you go on to say it is in the next sentence? Even the IFS who criticised the government for claiming VAT was regressive got their hands burnt because the figures they used actually showed VAT to be regressive.

Your evidence for an overall progressive system is also worryingly misguided. Progressive doesn't mean that the rich pay more tax, it means that their taxation is higher as a proportion of their income.

I happen to agree with you that taxation should be considered holistically, and that for the most part UK taxation is progressive; that doesn't mean I think we should be moving taxation from clearly progressive taxes (income tax) to regressive (VAT) ones.

I don't think VAT is very regressive as charged in the UK. If you have a link to research that shows otherwise I'd happily revisit my opinion.

I understand full well what progressive means. If the poorest half of the population pay no tax at all on a net basis then I think it's fair to say that tax is very progressive.