How to correctly gift shares to spouse, CGT changes

scoobyjones1

eskbanker said:

scoobyjones1 said:
Add to that the cuts to thresholds for tax on dividends and interest from 2k to 1k to 500 and this will discourage many savers and make life more difficult.

But my point was that there hasn't been any change to interest thresholds, just CGT and dividend ones, so I don't follow your argument about savers, as opposed to investors?

The rest of your post was largely a strawman - nobody was discussing IHT or claiming that overall tax take isn't increasing, and I'm not disputing that fiscal drag is an issue, but that's not a 'vicious threshold cut'....

Seems to me you are nit picking and deflecting here. It is a vicious move for me and surely many, many investors. And I merely meant investors  / savers as largely one and the same group. Many savers do invest to try and beat inflation. Besides if they do not raise savings interest / dividends thresholds in line with inflation, or to take account of higher interest rates than that IS a real term cut. They are being short sighted as this will take money out of the economy just as austerity has. Sure, they will have a bumper take this year...just going into an election (funny that!) but the next Government will also have this benefit and likely an even bigger pot. It is highly unlikely though that the next Gov will raise CGT thresholds. Maybe they will help the lower paid and raise the income tax thresholds... hope so.

eskbanker

For someone who doesn't want to argue politics, you do seem determined to bring politics into this!  Anyway, as I made clear, I was simply challenging one specific part of what you posted (the confusion between savers and investors) rather than seeking to engage with a wider rant - if you consider that to be nit-picking and deflecting then so be it!

Reed_Richards

I don't agree with this distinction between "savers" and "Investors".  Surely if you were saving for some event a long way into the future, say 20 years hence, you would be crazy to avoid stocks or funds, based on anything that has happened in the past.

eskbanker

Reed_Richards said:

I don't agree with this distinction between "savers" and "Investors".  Surely if you were saving for some event a long way into the future, say 20 years hence, you would be crazy to avoid stocks or funds, based on anything that has happened in the past.

If they were the same thing, this board would have a shorter title!

It seems to me that it's both valid and useful to differentiate between cash deposit products where capital is protected and equities, funds, etc, where the risk (and reward) profile is different, but that's not to say that a given individual has to be one thing or the other.

However, when someone makes an assertion that 'vicious' cuts will discourage "investors and savers", that identifies the two activities separately, so I was just highlighting that the cuts referred to only affect the former and not the latter.

Malthusian

Reed_Richards said:

But that is because it's the guaranteed safe option.  It also could involve a fair bit of time and trouble, although seemingly not in this case.  But nobody who has posted here yet appears to be sure whether it's really necessary.  

It is necessary if you want to avoid the risk of a completely pointless and easily avoidable argument with HMRC in which you start from a losing position. For me that compresses to "necessary", your mileage may vary.

Reed_Richards said:

I don't agree with this distinction between "savers" and "Investors".  Surely if you were saving for some event a long way into the future, say 20 years hence, you would be crazy to avoid stocks or funds, based on anything that has happened in the past.

The distinction between "saving" (cash) and "investors" (investments) is not as universal as people sometimes treat it here. There are even policies which are definitely investments but commonly referred to by the industry as "tax-exempt savings plans" (qualifying life policies).

The distinction is still useful because people who describe themselves as "investors" are inherently more likely to be people for whom investment is suitable, while people who describe themselves as "savers" are less likely to want to take investment risk.

Crazy to avoid stocks if you are saving for something 20 years in the future? Not really. Not everyone is well equipped to cope with their money going up and down at random. For some people, saving in cash may be the right choice. They can always save twice as much to account for inflation (in the hope that it remains at benign levels, of course). 

eskbanker

Malthusian said:

The distinction between "saving" (cash) and "investors" (investments) is not as universal as people sometimes treat it here. There are even policies which are definitely investments but commonly referred to by the industry as "tax-exempt savings plans" (qualifying life policies).

....and one of the most popularly-recommended methods of holding investments is in an Individual Savings Account!

I do agree that it's often unhelpful to dogmatically pick up newbie posters on choice of terminology (although I'm sure I'll have done it) if they innocently say, as many do, that they're looking for a (cash) ISA to 'invest' in, but IMHO if both terms are being used alongside each other (as opposed to inadvertently using one as if it was a synonym for the other) then it's valid to discuss the clear difference between them in terms of recent changes in tax treatment.

Anyway, this is all veering ever further away from the question of how to transfer assets between spouses, although I think that particular subject had been exhausted....

scoobyjones1

eskbanker said:

For someone who doesn't want to argue politics, you do seem determined to bring politics into this!  Anyway, as I made clear, I was simply challenging one specific part of what you posted (the confusion between savers and investors) rather than seeking to engage with a wider rant - if you consider that to be nit-picking and deflecting then so be it!

Believe me, I do not want to argue politics. I was merely answering your points. I was here asking for help and advice and I thank you for yours. You were the one looking into other things! Best.

scoobyjones1

Reed_Richards said:

I don't agree with this distinction between "savers" and "Investors".  Surely if you were saving for some event a long way into the future, say 20 years hence, you would be crazy to avoid stocks or funds, based on anything that has happened in the past.

Exactly Reed, It was me that said Investors and Savers and I meant a group of people in general...some would be merely savers, some pure investors but for most that would involve both. People may open an ISA, some will use it to save cash and some to invest in stocks. This was the general group of folks I was referring to. All are effected by the tax thresholds in some way and these being frozen or cut makes it harder to save and/or invest.

Hoenir

scoobyjones1 said:

eskbanker said:

scoobyjones1 said:
These vicious threshold cuts will discourage investors and savers, lose business for providers and create massive backlogs for HMRC who are already over stretched.

The only winners will be financial advisers...in the short term.

Which 'vicious threshold cuts' impact savers?

The reduced CGT and dividend allowances can obviously affect investors, although the £20K annual ISA allowance should mitigate that for all but the wealthiest, and those who have sufficient assets to engage financial advisers are arguably a more suitable population to shoulder a higher burden of taxation than those less well off....

I'm not here to argue politics and we cannot afford financial advisers. If you have a position of shares built up over many years, maybe an inheritance already subject to a lifetime of taxation then another 40% tax after death, not in a SIPP or ISA, to cut the threshold from 12k plus to 6 to 3 is vicious in my opinion. Especially when they promised not to, only 3/4 years ago. Add to that the cuts to thresholds for tax on dividends and interest from 2k to 1k to 500 and this will discourage many savers and make life more difficult. They are doing this to raise more tax revenue of course. Add in the freeze on Income Tax thresholds, pushing many more people into tax and higher rate tax, then they certainly will have a bumper take this year and even more so next. We are being taxed more than we were 70 years ago and it's all a bit under the radar for many people. You may be aware and no doubt you have planned ahead...but that's not most folk!

Then consider how badly "savers" are treated in other tax jurisdictions. They can only dream of tax free ISA's as an example.. 

scoobyjones1

Malthusian said:

Reed_Richards said:

But that is because it's the guaranteed safe option.  It also could involve a fair bit of time and trouble, although seemingly not in this case.  But nobody who has posted here yet appears to be sure whether it's really necessary.  

It is necessary if you want to avoid the risk of a completely pointless and easily avoidable argument with HMRC in which you start from a losing position. For me that compresses to "necessary", your mileage may vary.

Reed_Richards said:

I don't agree with this distinction between "savers" and "Investors".  Surely if you were saving for some event a long way into the future, say 20 years hence, you would be crazy to avoid stocks or funds, based on anything that has happened in the past.

The distinction between "saving" (cash) and "investors" (investments) is not as universal as people sometimes treat it here. There are even policies which are definitely investments but commonly referred to by the industry as "tax-exempt savings plans" (qualifying life policies).

The distinction is still useful because people who describe themselves as "investors" are inherently more likely to be people for whom investment is suitable, while people who describe themselves as "savers" are less likely to want to take investment risk.

Crazy to avoid stocks if you are saving for something 20 years in the future? Not really. Not everyone is well equipped to cope with their money going up and down at random. For some people, saving in cash may be the right choice. They can always save twice as much to account for inflation (in the hope that it remains at benign levels, of course). 

How does "saving twice as much" account for inflation? Unless you can find a savings interest rate above inflation...which I haven't seen?