60% tax trap - any way out (other than pension conribs)?

boomboomboom

Jeremy535897 said:

If your wife needs capital items that qualify for capital allowances, you could become a partner, and if the capital allowances create a loss, allocate 99% of that loss to you in the tax year it arises (but only from the date you become a partner). When the business makes a taxable profit, allocate 99% of the profits to her, assuming she is a basic rate taxpayer.

There is no point buying things just to get a tax deduction. You would also become jointly and severally liable for the partnership debts.

My mind is blown. I don’t quite have the head for all of that. Is there such a thing as a tax accountant that could look at my situation and help me minimise what I pay?

Could I start a photography business where I offer for sale my photographs and so any traveling I do is offset against my business. And of course I’ll never sell a single photograph because I am terrible at it!! The business would incur expenses coincidentally inline with visits to Alton Towers and when I take my kids to motorcross - because that area of photography is my ‘specialty’.

boomboomboom

lisyloo said:

Check if your employer does salary sacrifice for cars?
if you have genuinely exhausted salary sacrifice and pensions then the only other option I’m aware of is to work less.

@lisyloo my employer do offer a salary sacrifice electric car scheme but they are so expensive and I own my current car, admittedly it’s diesel, but I don’t think the figures justify it. I don’t commute so travel very little.

boomboomboom

penners324 said:

Work less and get less take home pay?

Even those £1s that I get out of every £2 I earn at the upper end are useful 😉 

boomboomboom

Albermarle said:

Or realise you are better off than 99.5% of the world, and stop worrying about tax.

As they say only two things certain in the world- Death & Taxes.

Having faced death I can assure you it’s actually more comforting than you might appreciate. My thoughts during that period were that I couldn’t get dying wrong so it was actually one of the few times in my life that I felt truly relaxed and at peace. Weird huh. Tax however is terrifying!

But yep yours is my first back-handed compliment on here heh and you are right to issue it to me. I am acutely aware I may sound ungrateful (first world problems etc), and my conscience doesn’t need any more gratitude. Like most of us though I think, I live to my means and do not feel rich by any stretch. I am in my late 40s and worked through a ropey -albeit it interesting and credible- career of small companies only in the past few years after working my !!!!!! off for the career I now have.  Through my own business going bust and then surviving cancer as well as my age I genuinely feel on the back foot ploughing over half of my salary into savings/pension. So I am not sure if “worry” is the right word here, and I have enough gratitude for all of us, but I can now relax a little knowing -thanks to you lot- that I am doing pretty much all I can (from a tax point of view). Thanks though @Albermarle for the wake up 🙏

Jeremy535897

boomboomboom said:

Jeremy535897 said:

If your wife needs capital items that qualify for capital allowances, you could become a partner, and if the capital allowances create a loss, allocate 99% of that loss to you in the tax year it arises (but only from the date you become a partner). When the business makes a taxable profit, allocate 99% of the profits to her, assuming she is a basic rate taxpayer.

There is no point buying things just to get a tax deduction. You would also become jointly and severally liable for the partnership debts.

My mind is blown. I don’t quite have the head for all of that. Is there such a thing as a tax accountant that could look at my situation and help me minimise what I pay?

Could I start a photography business where I offer for sale my photographs and so any traveling I do is offset against my business. And of course I’ll never sell a single photograph because I am terrible at it!! The business would incur expenses coincidentally inline with visits to Alton Towers and when I take my kids to motorcross - because that area of photography is my ‘specialty’.

To claim trading losses against other income, the loss making trade has to be carried on commercially with a view to profit. Lots of people try to turn hobbies into trades. Antique dealers are a common example.

Albermarle

But yep yours is my first back-handed compliment on here heh and you are right to issue it to me. I am acutely aware I may sound ungrateful (first world problems etc)

I do not think you sounded ungrateful. My 'philosophy' ( if you could call it that ) is one of the great things about having lots of money ( relative to the general population anyway ) is that you do not have to worry about money. So maybe better to reconsider for your own peace of mind why you think Tax however is terrifying!

Well done for beating cancer, maybe with some help from the NHS?(paid for by tax  )