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At What Portfolio Size Would You Consider Professional Advice?
Comments
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The phrase "tax-dodging" isn't very helpful here.
It is either tax evasion (illegal) or tax avoidance (legal).
If it is legal to use Trusts to avoid (or delay) the payment of tax then it is avoidance, not evasion, and using the words "tax-dodging" is misleading.
As a money saving site the use of tax avoidance is something many of us do, and probably generally feel should be encouraged (e.g. 'open an ISA')
Other opinions are available, though we should probably avoid the use of pejorative language when talking about people's lawful tax arrangements, even if we personally don't believe they should be allowed.
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Complying with the letter of the law will keep you out of gaol, not doing what seems right to most people will just get you some sideways glances. You should pay as much tax as require by the law at the appropriate time and if you can use current trust laws to defer tax or pay a different rate then why wouldn't you. In such circumstances don't get annoyed at the tax payer get annoyed at HMRC and the politicians writing the laws.
And so we beat on, boats against the current, borne back ceaselessly into the past.2 -
That is out of date. The law has been changed:
Tax avoidance is illegal. You can now only use tax advantages that Parliament intended. To do otherwise is tax avoidance and is illegal.
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Also depends on what advice you mean. By the different size options I guess you mean about planning investments.
I wouldn't want that, but might consider a fixed fee advice when close to retirement, though there's a lot of YouTube by financial advisers, so probably would not need that.
I just need someone to give me a million or so to test if I am fine at that level.
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So reading this you do have to wonder a bit how to then define tax evasion. Presumably something more like just not declaring income at all ?
So presumably you should refer to using ISA's; pension tax relief, as legitimate tax planning, as you are following the rules in the spirit in which they were set?
What should we call it where a tax benefit ( or maybe some other financial benefit) is gained legally, but that was not part of the initial intention of the legislation, but is not classed as tax avoidance as per this article. Such as high earners using salary sacrifice to still claim child benefit, or using the Small Pot Rule when you really have a large pot, or in fact using Trusts in certain circumstances? Maybe best just described as grey areas ?
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I've always thought of tax evasion as not paying tax by simply hiding things. Whereas tax avoidance involves restructuring one's affairs to change the outcome of a calculation.
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That is a good article, explaining the legal nuances. He says that it is impossible to define what tax avoidance is. We cannot make a blanket statement as to whether it is legal or not.
What we discuss here comes under his first category of normal tax planning.
His second category of successful tax avoidance is coming up with clever way of avoiding tax that a court decides is legal. I doubt whether many of us here would risk that and be successful in court.
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Terms like "avoidance" and "evasion" are interesting to me because, as a US tax payer, I have the annual chore of filing my taxes with the IRS. In the US everyone has the responsibility to pay the right amount of tax depending on their circumstances. Income tax will be withheld from their wages, but tax on things like dividends, capital gains etc might not be withheld by the financial firms and so you have to make sure your sums add up at the end of the year and you might get a refund or have to pay extra. There are many tax strategies involving various exemptions, expenses and even trusts which are completely legitimate and it's seen as foolish not to take advantage of them. Here's an example from a "The Accountant" movie and as a "sole proprietor" of a small business and rental owner I take similar deductions each year.
https://www.youtube.com/watch?v=kDnMVOCULNw
And so we beat on, boats against the current, borne back ceaselessly into the past.0 -
Pay your taxes according to the law and if there is disagreement with how to apply the law then we have courts and judges. Applying personal morality to someone else's reasoned tax position is fruitless…unless it sells lots of papers. I would rater use terms like "planning" for reasoned tax positions.
And so we beat on, boats against the current, borne back ceaselessly into the past.1
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