10% CGT rate.

silvercue

Hoenir said:

No reason why capital gains shouldn't be treated any differently to income. Bring them into line. Simplfying the tax  system is beneficial to all. 

That is a matter of opinion.  Not everyone would agree.  

John464

Hoenir said:

No reason why capital gains shouldn't be treated any differently to income. Bring them into line. Simplfying the tax  system is beneficial to all. 

As has been pointed out, the capital gain and income may be negative after inflation is taken into account.  But its still taxed.
And investing for capital gains involves risk.  There has to be a good incentive to take that risk if we really are going to get the growth they say they will achieve.
 
On the other hand company owners may declare their income as capital gain or dividends to pay less tax?

Whatever, its not about what is right - its about whatever promises are going to win votes.

John464

masonic said:

CKhalvashi said:

CKhalvashi said:

talexuser said:

I would have thought taxing offshore investment would be the first thing to do for a patriotic government wishing investment in the UK? 

Overseas investments already are taxed at the same rate as domestic investments, although there is often a foreign tax credit if applicable. 

Stopping British businesses from expanding overseas wouldn't be a viable option and would likely cost more than it gains. Remember that most of the profits are likely ultimately repatriated to the UK.

Knowing it's bad etiquette to quote oneself, one potentially easy additional tax to take that would probably be domestically popular may be a basic rate tax for non-residents on dividends at the 7.5% mark.

I don't have ready statistics for the amount of dividends repatriated overseas annually, but in general this would be reduced to about 5% under most DTTs anyway should certain conditions be met.

It will also be offsettable against most taxes abroad and an increasing number of countries do operate with such taxes. As I can see, the UK is an outlier in not doing this.

Presumably London listed ETFs domiciled in Ireland and Luxembourg held by UK residents would be seen to be repatriating dividends overseas, even if they were paid straight back to their investors in the UK. So such a move might change some behaviour amongst UK investors.

Am I right in thinking that if we UK residents hold an ETF domiciled in Ireland, like VWRL, we pay the same dividends and capital gains tax on VWRL as a UK listed share like M&S?

masonic

John464 said:

masonic said:

CKhalvashi said:

CKhalvashi said:

talexuser said:

I would have thought taxing offshore investment would be the first thing to do for a patriotic government wishing investment in the UK? 

Overseas investments already are taxed at the same rate as domestic investments, although there is often a foreign tax credit if applicable. 

Stopping British businesses from expanding overseas wouldn't be a viable option and would likely cost more than it gains. Remember that most of the profits are likely ultimately repatriated to the UK.

Knowing it's bad etiquette to quote oneself, one potentially easy additional tax to take that would probably be domestically popular may be a basic rate tax for non-residents on dividends at the 7.5% mark.

I don't have ready statistics for the amount of dividends repatriated overseas annually, but in general this would be reduced to about 5% under most DTTs anyway should certain conditions be met.

It will also be offsettable against most taxes abroad and an increasing number of countries do operate with such taxes. As I can see, the UK is an outlier in not doing this.

Presumably London listed ETFs domiciled in Ireland and Luxembourg held by UK residents would be seen to be repatriating dividends overseas, even if they were paid straight back to their investors in the UK. So such a move might change some behaviour amongst UK investors.

Am I right in thinking that if we UK residents hold an ETF domiciled in Ireland, like VWRL, we pay the same dividends and capital gains tax on VWRL as a UK listed share like M&S?

The rates for capital gains and income from traditional offshore investments are the same as domestic investments, yes. But they are entered as foreign on your tax return. Ideally you'd hold your investments in a tax wrapper and not have to pay attention to any of this.

John464

masonic said:

John464 said:

masonic said:

CKhalvashi said:

CKhalvashi said:

talexuser said:

I would have thought taxing offshore investment would be the first thing to do for a patriotic government wishing investment in the UK? 

Overseas investments already are taxed at the same rate as domestic investments, although there is often a foreign tax credit if applicable. 

Stopping British businesses from expanding overseas wouldn't be a viable option and would likely cost more than it gains. Remember that most of the profits are likely ultimately repatriated to the UK.

Knowing it's bad etiquette to quote oneself, one potentially easy additional tax to take that would probably be domestically popular may be a basic rate tax for non-residents on dividends at the 7.5% mark.

I don't have ready statistics for the amount of dividends repatriated overseas annually, but in general this would be reduced to about 5% under most DTTs anyway should certain conditions be met.

It will also be offsettable against most taxes abroad and an increasing number of countries do operate with such taxes. As I can see, the UK is an outlier in not doing this.

Presumably London listed ETFs domiciled in Ireland and Luxembourg held by UK residents would be seen to be repatriating dividends overseas, even if they were paid straight back to their investors in the UK. So such a move might change some behaviour amongst UK investors.

Am I right in thinking that if we UK residents hold an ETF domiciled in Ireland, like VWRL, we pay the same dividends and capital gains tax on VWRL as a UK listed share like M&S?

The rates for capital gains and income from traditional offshore investments are the same as domestic investments, yes. But they are entered as foreign on your tax return. Ideally you'd hold your investments in a tax wrapper and not have to pay attention to any of this.

Thanks - thats what I thought and have put on my self assessment - I just wanted to double check I am not giving this 'government'any more money than I have to!!
Unfortunately for years I did not take advantage of the ISA allowances because there was no extra tax on dividends and the CGT allowance covered the shares I had. 
But, of course, the Government has since moved the goalposts and, despite using the full allowance since Osborne started double taxing dividends, most of my investments are unwrapped
I am not able to avoid tax by claiming to live abroad or whatever the £billionaires do

talexuser

CKhalvashi said:

Stopping British businesses from expanding overseas wouldn't be a viable option and would likely cost more than it gains. Remember that most of the profits are likely ultimately repatriated to the UK.

Interesting point about profits repatriated. Why do we let foreigners buy monopoly privatised utilities? There are not many privatisations you can point to now as being a great success story.

eskbanker

talexuser said:
There are not many privatisations you can point to now as being a great success story.

If you see Sid, tell him that too!

John464

talexuser said:

CKhalvashi said:

Stopping British businesses from expanding overseas wouldn't be a viable option and would likely cost more than it gains. Remember that most of the profits are likely ultimately repatriated to the UK.

Interesting point about profits repatriated. Why do we let foreigners buy monopoly privatised utilities? There are not many privatisations you can point to now as being a great success story.

Same reason as we pay absurd amounts of money for useless PPE I guess
Vested interests hire Members of Parliament to help them fleece the taxpayer - second jobs etc

CKhalvashi

talexuser said:

CKhalvashi said:

Stopping British businesses from expanding overseas wouldn't be a viable option and would likely cost more than it gains. Remember that most of the profits are likely ultimately repatriated to the UK.

Interesting point about profits repatriated. Why do we let foreigners buy monopoly privatised utilities? There are not many privatisations you can point to now as being a great success story.

I don't disagree with you.

The simple fact though is that if CGT is at income tax rates, many will simply take the money annually instead of reinvesting into businesses whether that is here or abroad.

The current system compensates for risk.

InvesterJones

CKhalvashi said:

The simple fact though is that if CGT is at income tax rates, many will simply take the money annually instead of reinvesting into businesses whether that is here or abroad.

The current system compensates for risk.

I'm not sure that's a fact. Nor do I think it's up to the tax system to be the compensator for risk - price (and therefore return) should do that already.