ISA limit reached.

gadgetmind

dunstonh wrote: »

However, one I do know that started in the 90s with me as their adviser.

We started in the late 80s with PEPs, and have never taken so much as a penny back out, but couldn't always do the max subscription by any means. Neither of our ISAs is even close to £1m individually but they are having a good go between the two.

gadgetmind

ColdIron wrote: »

Now it makes sense. Everyone should pay their fair share of tax ... except me

My projections show me paying more in tax during retirement than I will receive in state pension, plus the pension kicks in a good decade after I'm going to retire.

Zero in tax sounds very nice to me!

ArmyDilllo

gadgetmind wrote: »

My projections show me paying more in tax during retirement than I will receive in state pension, plus the pension kicks in a good decade after I'm going to retire.

Zero in tax sounds very nice to me!

Thank you!
Heheheh.

I'm no IFA, nor am I connected to any, but I often meet with them.
If any one were to genuinely convince me he can invest my money better than me, I might even sign up with him.
I urge you to at least consider having an initial meeting with a couple.
They should be able to assess your individual circumstances and let you know what you can do about your tax situation.
If it can't be fixed now, it can be steered towards a longer term solution.

You might also enjoy hearing about the Inheritance Tax solutions that are available (most of which completely boggled my mind.., and opened my eyes).
IHT is basically entirely voluntary.
Here, I have to say, I have some sympathy with my... stalkers.
IHT was intended to return more wealth to the state and create a more level playing field for all.
But the more you have, it seems, the easier it is to circumvent IHT entirely.
Osbourne's increased IHT allowances only pay lip-service to the masses.
They are utterly irrelevant to someone who knows a little about the topic.

bowlhead99

ArmyDilllo wrote: »

The real money earners pay less tax in their lives than I've paid in a year.

WAKE UP.
The more money you have, the easier it is to [legitimately] keep it.

In their entire lives? Either you have been paying a LOT of tax per year or you have stumbled upon a pretty good wheeze for real money earners. I don't doubt, by the way, that if you have a lot of money and face a lot of potential tax, it is a strong incentive to take advice, which you can afford, and find ways to reduce it. That can include all sorts of things such as use of trusts and re-domicilng yourself.

There are loads of much less palatable means to do it which the Govt leave alone so they can exploit them.
Otherwise3 they'd close down the Cayman Islands*.

There also seems to be some confusion around tax avoidance and tax evasion*.

Are you implying that anything involving Cayman is the latter? It does actually have a very legitimate financial service industry and decent rule of law which is why investment vehicles use it (and other jurisdictions such as BVI or Channel islands) for its tax neutrality. You can't just "close down" a country because it chooses not to have a high rate of personal or corporate income tax.

By the way, I just completed and submitted my tax declaration.
Total honesty, visibility and all above board.
Guess what? No income tax to pay.

Feels great boys, like a little lottery win or something.
I think I shall pop out to celebrate by buying an expensive bad-boy coffee from Costa or Starbucks, with my ill-gotten gains.

Don'cha just love it when people gloat about their financial circumstances online? :beer:

Can't wait until you've done your first IHT course.
Then you'll have something to gripe about.

Oh, you're the kind of person who not only gloats about their personal position but "can't wait" until we find out something that we don't like about our own. You sound nice.

However, perhaps you are mischaracterizing the users of this forum as ill-educated morons who don't understand tax rules and therefore aspire to take some sort of "IHT course" because we don't know how IHT works as we have never taken an interest in reading up about it. If you were told that actually plenty of people are familiar with the rules and a number of us had trained as accounting, tax, legal or financial services professionals, it might blow your tiny mind, so we'd better not tell you.

ArmyDilllo wrote: »

But the more you have, it seems, the easier it is to circumvent IHT entirely.
Osbourne's increased IHT allowances only pay lip-service to the masses.
They are utterly irrelevant to someone who knows a little about the topic.

Did you learn that on your "first IHT course", or in the daily mail?

Some of the solutions to avoid IHT include quite serious re-jigging of assets and lifestyle. If you are not going to go the whole hog of losing your domicile and residence or giving away your assets to other entities, and only holding certain exempt assets in your UK estate, I think "utterly" irrelevant is an exaggeration.

Though clearly if you are a billionaire living offshore then in the grand scheme of things it doesn't really matter whether the UK IHT limit is £300k or £600k or £1m, just like it doesn't matter to you one iota whether the UK annual personal allowance is £11k or £12k.

ArmyDilllo

bowlhead99 wrote: »

Are you implying that anything involving Cayman is the latter? It does actually have a very legitimate financial service industry and decent rule of law which is why investment vehicles use it (and other jurisdictions such as BVI or Channel islands) for its tax neutrality. You can't just "close down" a country because it chooses not to have a high rate of personal or corporate income tax.

https://www.youtube.com/watch?v=2oElLtJ00Po

grey_gym_sock

the suggestion that the caymans, and similar jurisdictions, are doing nothing wrong, is very disingenuous.

nobody (outside the caymans) cares very much what rate the caymans tax economic activity that actually takes place there. very little does take place there, and it's their business how they tax it. the problem is that they are a secrecy jurisdiction, and that enables people to record activity that happens in other jurisdictions as if it happens in the caymans, thereby avoiding compliance with the tax - and other - laws of the jurisdictions where the activity actually takes place.

it is also disingenuous to describe this as perfectly legal. a lot of this subversion of other legal systems is blatantly illegal. it includes laundering the proceeds of crime - e.g. thefts by kleptocratic dictators, and the profits of drug trafficking. it includes illegal tax evasion. as well the tamer attempts by multinational companies to pay less tax by exploiting weaknesses in, and mismatches between, national tax systems. some of the latter is legal - but not all. one of the effects of secrecy is to avoid legal scrutiny; somebody may have a legal argument that that their use of caymans means they are not due to pay UK tax, but if HMRC don't even know what they're doing (due to the secrecy), they won't get the chance to disagree, and have the courts settle the matter if necessary.

where armydilllo is going wrong is not with resenting that the richest can often cheat the tax system. but with then going on to resent every penny of tax that he's paying. a better approach is to fix the international tax system, to shut down most of the abuse.

this is actually perfectly do-able. governments are now at least talking about cracking down on tax avoidance and evasion. (the tax justice movement can take most of the credit for that.) and there is even some action, though so far it is very incomplete. and if you leave loopholes, the tax abusers may well switch tactics to keep using the remaining loopholes. so continued pressure on governments is needed.

but it's now pretty what the basic tools to tackle tax abuse are, if we can only follow through and implement them without leaving loopholes:

- country-by-country reporting (CBCR) by multinational (groups of) companies needs to be published. this gives figures for activity in each jurisdiction - including sales, profits, number of employees, tax paid - which is a useful guide for spotting potential tax abuse. this reporting is now going to happen, but not in public - it will only be given to some tax authorities - not even to all the tax authorities in which the group operates. it needs to be made public.

- unitary taxation of multinational companies. this is a some ways a follow-up to CBCR. completely get rid of the issues where tax slips between the cracks of different jurisdictions, by instead measuring the worldwide profits of the group, and dividing it up among the jurisdictions where it operates according to a formula based on some combination of
a) location of employees
b) location of sales
c) location of physical assets

- public registers of the beneficial owners of companies, so that ownership cannot be hidden. and the same for the beneficiaries of trusts, and other legal structures - otherwise, people determined to have secrecy will just migrate to the most opaque legal structure left. again, there is some progress with this, but not in every jurisdiction, and not applying to all legal structures, so there are still big loopholes.

- automatic information exchange between jurisdictions. e.g. presumably (though i don't know) the caymans will give HMRC info they hold when HMRC ask about a specific caymans company. but that's of limited use if HMRC don't know what to ask for. (nor if caymans don't hold info about beneficial ownership: see the previous point.) there has been some progress here, mainly relating to reporting on interest in deposit accounts in the names of individuals - but not covering accounts in the names of companies, or assets other than deposit accounts. so lots more to be done.

bigfreddiel

dunstonh wrote: »

They are real. We have several clients with over a million on ISAs.

I've always thought that if you can advise others who become millionaires from your advice then you as their advisor will also be a millionaire. Is that in fact true?

Cheers fj

Eco_Miser

bigfreddiel wrote: »

I've always thought that if you can advise others who become millionaires from your advice then you as their advisor will also be a millionaire. Is that in fact true?

There's a big difference between having a million in investments and becoming a millionaire by investing.

The first may be entirely by saving your surplus income, or by inheritance.

bowlhead99

grey_gym_sock wrote: »

- automatic information exchange between jurisdictions. e.g. presumably (though i don't know) the caymans will give HMRC info they hold when HMRC ask about a specific caymans company but that's of limited use if HMRC don't know what to ask for.

You presume wrong: the 'automatic' bit means the Caymans give HMRC information about the Cayman financial accounts of UK resident individuals or UK companies, or other passive holding companies whose ultimate controllers are UK resident individuals, on an annual basis - without HMRC needing to ask for it. It is a fixed annual exchange every September, which the banks and financial institutions facilitate by reporting to their local tax authority at some point between year end and that date it's going to be passed on to HMRC.

there has been some progress here, mainly relating to reporting on interest in deposit accounts in the names of individuals - but not covering accounts in the names of companies, or assets other than deposit accounts. so lots more to be done.

By 'information about financial accounts' that I mentioned above, I mean for bank accounts: the balances, interest and other credits; for brokerage accounts: balances, dividend receipts, interest income, proceeds of investment redemptions, amounts withdrawn; for investment funds: values/balances and distributions/redemptions; also cash value insurance contracts. It is not just deposit accounts.

And neither it is not just accounts held by individuals, it is accounts held by UK companies or by holding companies controlled by UK resident individuals (or for trusts, those controlled by UK trustees or settled by UK residents or whose beneficiaries are UK residents).

If you are a UK resident who has set up a Luxembourg holding company with your wife to hold an investment in a Bermudan hedge fund, and also to have the 'Lux-co' invest into a BVI holding company which will in turn then open up a bank account in Cayman and invest into a private investment fund in Guernsey...

... then at the end of the year, the Bermudan hedge fund will report the balance of the Luxembourg holdco's equity interest in it, together with the gross credits and redemption proceeds taken by Lux-co during the year, with your and your wife's name stamped on it, to HMRC. Meanwhile, the Cayman bank will report the bank account balance and interest earned by the BVI holding company to the Cayman authority, with your and your wife's name stamped on it, who will report that on to HMRC. At the same time the Guernsey investment fund will report the value of the BVI company's holding together with any redemption proceeds, to Guernsey tax authority, with your names on it, who will pass it to HMRC.

This data has been exchanged going back to 2014. For the current year, the expansion of automatic exchange of info for tax purposes covers a lot more countries ; so for example if your Luxco opens up a bank account in Mexico or South Africa, the banks in those two countries will (via their local tax authorities) tell both Luxembourg tax authority and UK HMRC next summer what the balance was at year end and what was earned there.

If you have a deposit account in Argentina and your wife has a broker in Faroe Islands, they are both getting reported to HMRC for 2016 too (and if you do it through your BVI holdco instead, you still get reported, because no bank or broker in Argentina or the Faroes is going to open up an account for a BVI holdco without knowing who the owner /controlling party is). When your BVI co goes to open up their accounts, the firms would want the BVI and Lux corporate documentation (showing the shareholder and director registers) to satisfy their anti-money laundering rules, and they would want your NI number or UTR to satisfy their tax reporting rules.

So, sure, there is more to do, which includes the stuff you were talking about - "public registers of the beneficial ownership of companies", but there is plenty of reporting happening already, which the financial services industry has spent loads of money on in the last few years.

The public register stuff is not going to happen in a lot of jurisdictions, it will just be for tax and law enforcement to look at, not for the general public to have a gander, nor for the press to go on fishing expeditions. In the UK, the legislation for registers of "people with significant control" only came in this April and we were the first place in the world to do it. The crown dependencies / overseas territories like Channel Islands and Cayman won't start to bring it in until next year, because they have taken some convincing and negotiating to get on side.

But someone like Donald Trump is never going to bring in public registers for his country, because he's "pro business" and anti regulations. I can set up a new company in Delaware today, and no member of the public will know who really owns it and I'll never have to file any accounts with their equivalent of Companies House.

gadgetmind

ArmyDilllo wrote: »

I'm no IFA, nor am I connected to any, but I often meet with them.
If any one were to genuinely convince me he can invest my money better than me, I might even sign up with him.

Most IFAs subcontract constructing portfolios and choosing investments as this isn't where they add value.

I'm happy to read up on pensions, CGT, IHT, etc. legislation and to construct complex mathematical models to let me optimise money flow into various pots, reduce my tax bill, play "what if", etc. Maybe you're confident doing this too? But for whatever reason, most people aren't, and this is where an IFA can bring value.