Is personal tax optional ?

N1AK

chucknorris wrote: »

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 190 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.

Perhaps I'm misunderstanding but I'm pretty sure you can't offload CGT in that way to a spouse https://www.gov.uk/capital-gains-tax/gifts though I'm not sure either way.

If it is legit it sounds like it should be possible to remove £22k of capital gains each year, so I'm surprised it'd take 190 years to remove your liability (wouldn't that be something like £4.3 million in capital gains)

N1AK

Generali wrote: »

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.

This is the UK governments own figures on VAT. Obviously from a few years ago, explained purely by my laziness rather than any expectation that it will have changed. These figures aren't contested, even by the people who have challenged the governments conclusion that VAT is regressive.

I don't know enough about the website taxresearch.org.uk to vouch for the validity of their claims but there analysis of the governments figures, the IFS case against them, and the issues with the IFS claims seems to match with my recollection of this from back then.

Given that you understand full well what progressive means it's disappointing that you continue to use poor proxies to define it here; though the second attempt is a considerable improvement.

chucknorris

N1AK wrote: »

Perhaps I'm misunderstanding but I'm pretty sure you can't offload CGT in that way to a spouse https://www.gov.uk/capital-gains-tax/gifts though I'm not sure either way.

If it is legit it sounds like it should be possible to remove £22k of capital gains each year, so I'm surprised it'd take 190 years to remove your liability (wouldn't that be something like £4.3 million in capital gains)

No you are not misunderstanding, I knew that it isn't a legit method, but I couldn't remember the exact rules, so to keep the post simple, I rejected the method because it would take too long.

It was a typo it would actually take about 120 years, and it isn't a legit method in any case, which is why I just quickly rejected the idea based on the duration.

princeofpounds

I think it's pretty interesting that this thread has been around for some time now, in a forum fill of (arguably) switched-on people, and actually there has been remarkably little practical information about how to avoid tax.


It just goes to show that between the standard schemes, and being a half-corporate, half-individual jet setter, there isn't much avoidance to be done.

Generali

N1AK wrote: »

This is the UK governments own figures on VAT. Obviously from a few years ago, explained purely by my laziness rather than any expectation that it will have changed. These figures aren't contested, even by the people who have challenged the governments conclusion that VAT is regressive.

I don't know enough about the website taxresearch.org.uk to vouch for the validity of their claims but there analysis of the governments figures, the IFS case against them, and the issues with the IFS claims seems to match with my recollection of this from back then.

Given that you understand full well what progressive means it's disappointing that you continue to use poor proxies to define it here; though the second attempt is a considerable improvement.

Cheers, I'll have a dig to see what I can find out.

There are several grey areas in things like this, most notably are tax credits a tax reduction or a benefit...?

I am very surprised to see the poor paying a higher tax rate than the rich as that is in direct contravention of what I've read. I'm not saying it's incorrect and certainly not trying to imply bad faith on your part but it is very surprising.

I guess it could be true if you take wages before benefits but after tax. I struggle to see how the bottom quintile pay so much income tax even then. The bottom quintile earn very little, almost nothing before benefits.

HAMISH_MCTAVISH

princeofpounds wrote: »

I think it's pretty interesting that this thread has been around for some time now, in a forum fill of (arguably) switched-on people, and actually there has been remarkably little practical information about how to avoid tax.


It just goes to show that between the standard schemes, and being a half-corporate, half-individual jet setter, there isn't much avoidance to be done.

Indeed.

Despite the frequent protestations of some to the contrary it's actually pretty hard to avoid paying tax.

You can do a bit with structuring disposals to maximise allowances, or distributing assets/income amongst family members, but that's about it.

HAMISH_MCTAVISH

Generali wrote: »

I am very surprised to see the poor paying a higher tax rate than the rich as that is in direct contravention of what I've read. I'm not saying it's incorrect and certainly not trying to imply bad faith on your part but it is very surprising..

The key component is indirect taxes.

Does this includes all the taxes deliberately designed to make things extortionately expensive in the hope of changing behaviours, such as cigarettes, alcohol, fuel duty, etc?

If so then it's little surprise they make up such a large component of low income earners budgets?

mwpt

HAMISH_MCTAVISH wrote: »

The key component is indirect taxes.

Does this includes all the taxes deliberately designed to make things extortionately expensive in the hope of changing behaviours, such as cigarettes, alcohol, fuel duty, etc?

If so then it's little surprise they make up such a large component of low income earners budgets?

Yes, exactly. I also don't think it's an incredibly meaningful view on taxes to chart them as a percentage of income, but then also not chart the percentage of tax take as a whole.

N1AK

HAMISH_MCTAVISH wrote: »

The key component is indirect taxes.

Does this includes all the taxes deliberately designed to make things extortionately expensive in the hope of changing behaviours, such as cigarettes, alcohol, fuel duty, etc?

If so then it's little surprise they make up such a large component of low income earners budgets?

In a lot of ways the picture is more complex than one picture can demonstrate. Clearly it is based on the correct definition of taxation (and thus ignores benefits). However even if that assumption was contentious it's irrelevant to my point: VAT is regressive.

Hamish has nicely summarised a major reason why the graph looks that way (duty designed as a disincentive to consume).

I'm inclined to the view that our overall tax/benefit system is broadly progressive even if I'm less sure at the higher levels; but again, this doesn't mean that we should make changes to make it less progressive.

N1AK

mwpt wrote: »

Yes, exactly. I also don't think it's an incredibly meaningful view on taxes to chart them as a percentage of income, but then also not chart the percentage of tax take as a whole.

If you're talking about whether a tax system is progressive or not then it's only meaningful to talk about it as a proportion of income as that's exactly what the terms progressive/regressive are talking about.

I doubt anyone seriously contests that most tax is paid by the small proportion of the population who have the highest incomes.