I have several private pensions and I save regularly (because I don't want to be a burden on anyone in my old age). My pension providers are all large, well known companies but I cannot be sure that some where along the line they have part of their investment vehicle set up on the Channel Islands (where corporation tax is 10%) so I guess I am benfiting from tax minimisation.
Does this make me evil?
Also, my wife is from Guernsey and so at some point I guess we stand to inherit her parents estate. Of course we will pay capital gains tax when that happens but all the value of that estate will have been built in a jurisdiction that has no capital gains tax and very low income tax and a substantial part of the value will have been derived from investments in vehicles registered on Guernsey (and thus exempt from capital gains).
Does this also make me evil?
Yes
Phew, thank god for that. I was worried for a minute.
[url= https://farm2.staticflickr.com/1619/25009477184_0406988479_c.jp g" target="_blank">https://farm2.staticflickr.com/1619/25009477184_0406988479_c.jp g"/> [/img][/url][url= https://flic.kr/p/E717fu ]North Melbourne fun[/url] by [url= https://www.flickr.com/photos/mikewsmith/ ]Mike Smith[/url], on Flickr
Gold guillotine? Not very proletarian, if you ask me. Plus, you'll never get a decent edge on it.
No, there's a massive difference between tax efficiency and tax avoidance. There's also a huge grey area between the two that the government should legislate to narrow and clarify where boundaries lie but it sounds like you fall into the former.
However, you knew that didn't you, and just wanted to start an argument. 😀
And a troll...
No. Why would you even think you have to pay more tax than your legally obliged to do so ?
If you have excess income "YOU" decide how best to spend it for the general good.
Why would you pay CGT on an inheritance ? New allowances being phased in mean first £1m pounds is IHT free. Alternatively follow the lead of that national treasure Ronnie Corbert and have your wife's parents gift their wealth to you more than 7 years before their death. Then you can avoid being the scum of the earth by using an offshore company to achieve exactly the same thing
Never ever pay cash in hand for any job and get a VAT receipt. Don't buy any duty free either, just think of the needy. That way your conscience will be clear.
George Osborne's stance on tax avoiders is pretty clear:
[img] 
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@taxi see @grum's comment - this is a follow over from Panama Papers thread
However, you knew that didn't you, and just wanted to start an argument.
No, but I can see why you would think that.
Honestly the thing that infuriates me is the politics in the arguments being trotted out today. None of it is about an actual moral issue. It's purely about points scoring in a political game.
I think if there is any real point to be made it's that if you hold our politicians to a higher moral standard than anyone else, you're asking for trouble.
Why would it be OK for me to benefit in the way I've described above and not the PM?
AVOIDANCE - legal and morally correct
I see. So why did Take That end up with a large bill and a fine, for tax avoidance?
In an effort to retire early I became [i]extremely[/i] tax efficient a few years ago.
I am actually slightly concerned that any new legislation will move me to the wrong side of the line and I will need to change everything.
For the avoidance of doubt, I have no problem with this approach.
So I am probably evil-ish.
You don't pay CGT but the estate is liable for IHT subject to the thresholds and exemptions. Note: *you* don't pay IHT on *your* inheritance, it isn't *yours* at all until IHT has been paid. Of course the boundary between avoidance and evasion is fuzzy, and anyone who places it in a different place to me is *wrong* (joke).
If sCameron was doing it? you will be fine, not evil at all
EVASION - illegal and immoral
AVOIDANCE - legal and morally correct
#jambyfact
The reaction of everyone form the Govt to the people to the owners shows that Google, or Starbucks or FB are not seen as morally correct when they do this - heck even you wanted to tackle avoidance on the other thread - though you did blame the EU for us not being able to do this
DO you often want to curtail morally correct behaviour?
You don't pay CGT but the estate is liable for IHT
Thanks for clarifying that.
Um
I think if someone is making money in the UK then intentionally and knowingly squirreling it offshore to avoid paying UK tax on that UK income then many would judge that to be "evil" as you say.
Maybe your wifes family did just that historically, maybe not. You can't be accountable for their actions. If I was to inherit such an estate and I felt this was "not on" then I would look into how I can contribute back to society in a meaningful way with the cash that would have been paid to the state.
If I had been a bit lazy with vetting my investments and subsequently found out they had done something I did not agree with my money, I would mitigate this by withdrawing my investment, reinvesting inline with my ethics and values.
What a wonderfully black and white world you live inEVASION - illegal and immoral
AVOIDANCE - legal and morally correct
Why would it be OK for me to benefit in the way I've described above and not the PM?
Because your not taking the position on behalf of the country that "We are all in it together",
Nor are you going large on the tax evasion / unpaid tax piece taking the moral high ground and being a shining example of doing the right thing, or placing yourself fair and square in front of the hypocrisy klaxon chairing a Tax Fraud / Tax Evasion summit.
It would seem so OP... Trolls are Chaotic Evil
https://en.m.wikipedia.org/wiki/Troll_(Dungeons_%26_Dragons)
EVASION - illegal and immoral
AVOIDANCE - legal and morally correct
Well actually there's:
Evasion = illegal
Mitigation = legal and within the intent/letter of the law. A simple example would be an ISA. You get a tax free allowance from the gov't.
Avoidance = legal, but only because of a loophole/goes against the spirit of the law.
Mitigation and avoidance are both legal, but avoidance isn't necessarily morally right.
E.g.
Let's say a director is paid £2m. At the current marginal rate of 50%, nearly half of his or her earnings will go in tax. But if the company pays the director just £50,000 and puts the other £1,950,000 into an employer-financed retirement benefit scheme, and then the next day he or she borrows £1.9m from the pension scheme to spend as they like, the tax bill will be almost nothing
hese structures work so long as everyone agrees that the loan is repayable … but that's where the smoke and mirrors come in. There is a nod and a wink that the pension scheme will never ask for the money back, and the loan stays in place for perpetuity, until the person dies. At death, it disappears. The trustees of the pension scheme meet and agree to write it off,
http://www.theguardian.com/money/2012/jun/22/tax-avoidance-loophole
It's legal, but it's obviously dodgy and not the intent of the law.
Because your not taking the position on behalf of the country that "We are all in it together",
OK but then that suggests that the moral position is not absolute. It suggests that what is moral is realtive to the individual.
Do you agree with that position?
It's legal, but it's obviously dodgy and not the intent of the law.
I think you will find most tax advisers wouldn't think that scheme would have a hope in hell of working, for the sake of its future, I hope the Guardian's own tax planning is more robust.
Why would it be OK for me to benefit in the way I've described above and not the PM?
i) You're a single man who has casual, consensual sex.
ii) The prime minister cheats on his wife whilst publicly proclaiming family values.
I think you will find most tax advisers wouldn't think that scheme would have a hope in hell of working, for the sake of its future, I hope the Guardian's own tax planning is more robust.
That's what the article said, to be fair, but it's just an example of the blurred lines between moral and legal, and spirit of the law vs letter of the law.
Just like it's perfectly legal to put your dog down and then buy a new one two weeks later because it's cheaper than putting it in kennels while you go on your summer holidays. That doesn't make it right!
EFRBs are a variant of Employee Benefit Trusts, although the workings are fundamentally the same.
Whilst some EBTs did indeed work in 2010 they have since come under concerted attack by Government & HMRC (particularly in the Finance Bill 2011) and although there is still not absolute clarity on every EBT (see the various rulings on the Glasgow Rangers scheme which have gone for and against HMRC at various points), I think the idea that they remain a sensible tool for tax "planning" is very misguided.
@ransos because the scheme they where invested in was decalred evasion (basically)
FWIW I have been shown similar schemes and decided they where not for me/too dodgy
@balls - yes basically thats exactly what the Labour dinar and wind farm owner did. Also don't forget paying yourself a salary/bonus attracts tax at 45% (assuming you are a top earner) plus 2% NI + 12.8% employers NI
@JY I think it would be easier for you if I just shortened my username, save you all that typing 😉 How about IMO ? I'm not ready yet for IMHO 8)
@ransos because the scheme they where invested in was decalred evasion (basically)
No, it was avoidance. The tribunal said so, and I consider their opinion to have more weight than yours.
it's just an example of the blurred lines between moral and legal, and spirit of the law vs letter of the law.
No its an example of a shit scheme and gives a false impression of the ease with which tax can be avoided and how the UK tax system works in reality.
It's only evil if this plays when you walk in the room. (If I was organising the next Tory conference, it might be worth a career limiting move 🙂
@ransos - happy to read the summing up - do you have a link ? There is some newish language/requirements where you have to declare all such schemes and then are reviewed for "spirit and purpose" (my words) and if successfully challenged they are declared against the rules, i.e. not legal. As I have posted numerous times pop stars/media/journalists/sports people are some of the worst abusers of the tax system - we need a scoop on Russell Brand that right on man of the people that pays more rent (why doesn't he buy eh ?) in Hoxton/East London than it costs to rent in Chelsea/Belgravia
Apply to be the Prime Minister, sounds a perfect job for you OP. 😆
[i]What a wonderfully black and white world you live in [/i]
The Govt make the rules and we follow them. Can't get much more black and white than that.
No, it was avoidance. The tribunal said so, and I consider their opinion to have more weight than yours.
Which is the correct answer, there is extraordinary naivety about the law on these matters and a complete lack of understanding of the difference between civil and criminal law. Tax evasion is a crime which will be heard before the criminal courts, other tax disputes, including avoidance schemes, are matters for the civil courts - starting at the tax tribunal. If it is heard by a tax tribunal it is not evasion.
we need a scoop on Russell Brand
What else could give clarity on the PM's position and probity on this issue than that?
why doesn't he buy eh ?
Oh its that isn't it 😕
JY the PMs tax position has always been clear - his father setup an offshore trust to provide for his family and to legally avoid paying IHT (which as I have repeatedly said its a daft tax as its its so easily legally avoided and is largely only paid by the middle classes who don't plan for it - £4.6bn this year by the way, a record). You can avoid it via a trust, giving the money away 7 years before your death or just dying whilst living the last year of your life in an IHT free country. I suppose its not news to me as I have always followed the story.
@ransons - understood - would still be happy to read it - will try and Google it. As I said I was shown many of the tax swerves including the film ones which have pushed a number of ex-footballers into bankruptcy. I can't imagine the Take That ones looked remotely legit, I don't really understand why they wouldn't just live in Villars (near Montreux) or Monaco as many of the F1/tennis players do
You keep going on about a trust, there is no evidence that I have seen of such a thing, they may have been one but there is nothing concrete.
Many of the film schemes were fine, they were designed to meet the requirements of a specific government incentive. Unfortunately they were misunderstood as they were deferral schemes so whilst you saved tax on day 1 and you had liabilities in the later years, typically years 8 to 15. Unfortunately too many punters did not realize or were not advised of this and didn't have the money to pay the liabilities.
EDIT:
why doesn't he buy eh ?
He has in Henley.
I don't really understand why they wouldn't just live in Villars (near Montreux) or Monaco as many of the F1/tennis players do
Because they are boring places to live.
So everything that is immoral is also illegal?The Govt make the rules and we follow them. Can't get much more black and white than that.
the PMs tax position has always been clear
That will be why he has had to issue so many statements this week on that very issue.
Even the tory spin doctors and cameron loyal attack hounds are not saying that 😆
I agree we all knew, well we should have, from where his dad got his money and how dave prospered due to this. It was not a secret.
That will be why he has had to issue so many statements this week on that very issue.
Be fair: he got there at the fifth attempt.
[i]So everything that is immoral is also illegal? [/i]
Surely 'immoral' is in the eyes of the person making the judgement, so me having a beer on expenses (and the company setting this cost against its corporation tax) would be seen as 'immoral' by some people?
For me it's very simple, if I don't obey the rules then I am doing something illegal and can face prosecution (either criminal or civil). Morals don't come into it in any way, although I will argue that the Govt spending my taxes on illegal wars/acts and/or just plain wastage is 'immoral'.
Worth a listen - it's only a few minutes long but it's good to hear someone challenge the very pompous and ill informed John Humphreys.
[url= http://www.bbc.co.uk/programmes/p03qdlwc ]Today Programme - Tax Specialist corrects John Humphreys[/url]
Worth a listen - it's only a few minutes long but it's good to hear someone challenge the very pompous and ill informed John Humphreys.
Precision is important in these matters, but I am not entirely comfortable with his description of it as a hedge fund - although that has become a much abused term.
dp
Why would you pay CGT on an inheritance ?
You don't pay CGT but the estate is liable for IHT subject to the thresholds and exemptions
Not in all cases... The statements above are correct if assets are sold by the estate and the proceeds of sale are passed to a beneficiary (or distributed between a number of beneficiaries), but... If assets are transferred to a beneficiary and then sold by the beneficiary, then the beneficiary becomes liable for any capital gain on growth between date of death and date of sale of the asset. So sometimes a beneficiary can end up with a capital gains liability from an inheritance.
Interesting @hopkin until recently there was no uk CGT to pay on uk property if you where a foreign owner, I suspect that applied to trusts as well
For me it's very simple, if I don't obey the rules then I am doing something illegal and can face prosecution (either criminal or civil). Morals don't come into it in any way
Shagging your step-daugher or your brother's wife isn't illegal... I would think most people might have a slight ethical problem with those activities though.
EVASION - illegal and immoral
AVOIDANCE - legal and morally correct
Hmmm. It's not always easy to say Tax Avoidance is always legal. A Tax scheme may be tested in court because of its complexity and found not so.
So at which point was it moral?
[i]Shagging your step-daugher or your brother's wife isn't illegal... I would think most people might have a slight ethical problem with those activities though. [/i]
Except we are talking about money.
The point that I'm making isn't that hard to understand is it? That basing your actions on what you can legally get away with isn't necessarily a great way to behave. Which is what you are suggesting with regards to money.
@grum I agree but its a matter of degree - the money could have been gifted 7 years prior - no trust no issue ?
@mefty on Monaco or Villars being boring 1) not sure they spend very much time there 2) living in the mountains or by the sea isn't boring to me. IMO they live in Villars as its easy access to Sion airport for private jet and you can have a big house, if you want more interesting you could try Verbier. All this and you can still spend 90 days in UK, first thing I said to a mate who landed a major sports mgmt job which would take him all over the world was to base himself outside the UK - he pays less than 10% instead of 40% + and why not it may not last a long time, fickle business
I know what they are like I have friends who have houses in Villars and Verbier, indeed a couple of them have big houses, but they are holiday homes they wouldn't dream of living there full time. Likewise my cousin who actually is effectively a Swiss national left as soon as she and her husband retired, I have only one friend who enjoys living there but even he commutes weekly to London. People have different tastes.
Morality and tax - most of it is hogwash. Robert Nozick got closest to the truth......
Bon nuit
Indeed people have different tastes @merry - it was you however who suggested no one would want to live there as its boring. I know plenty of people who live in the mountains as a lifestyle choice including the guy worth $100's millions I mentioned (other thread I think). 90 days a year in the UK would do me fine. I spent 2 yrs trying to get an asset mgmt business off the ground - I would have been based in Verbier. If you look at someone like Hamilton how much time dies he really spend at home ? Given the choice he picks a low tax jurisdiction as his base/home.
it was you however who suggested no one would want to live there as its boring
No, I was just offering up a reason why the Take That guys may not want to move there, which you had suggested they should if they wanted to avoid tax.
We're not all in it together, it's every man for himself.
If the prime minister and his chancellor won't play fair then surely it's become a free for all!
Yeah! Last one to the bottom loses!If the prime minister and his chancellor won't play fair then surely it's become a free for all!
The famous quote from Lord Clyde in 1929:
[I]"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"[/I]
Morally - if anyone has a problem with the moral implications of tax arrangements there is only one very simple solution. [u]Make it illegal[/u]. If you don't, tough, just deal with it.
But anyway, looking at Cameron. As much as a prick he may be and whatever else he's done or benefitted from, in this case he's done nothing wrong. His father might have, but he and his wife had investments in an offshore fund, and on cashing in UK tax was due and paid in normal ways. Zip, zero, nothing immoral about it and there's no tax avoidance or evasion going on.
The only avoidance going on was as said from his father who set up the fund to avoid inheritance taxes (legally). Taxes which I strongly disagree with anyway, but life is summed up as Birth, Death and Taxes, all three interconnected.
What's pissing me off about all this is there's a backlash now against any form of offshore investment. It's all perfectly legal so long as you pay the UK taxes if you extract the money into the UK, and on top of that most of us benefit from offshore fund investments in savings, pensions and such. Most corporates invest in funds overseas. Most of those working in larger corporates are likely benefiting from such investments.
On top of this, his investment was £11k and he made a profit to turn it into £30k. Hardly something to kick up a fuss about. Can't even buy a shed in London for £30k.
As much as a prick he may be and whatever else he's done or benefitted from, in this case he's done nothing wrong.
+1 (and I'm far from being a fan)
And if he'd just fessed up when asked 1st time round, it would be a non story.
Ironic that his only real job was in PR!
Go on then I'll bite. How do I make these offshore tax havens illegal if it is very simple?Morally - if anyone has a problem with the moral implications of tax arrangements there is only one very simple solution. Make it illegal. If you don't, tough, just deal with it.
Also that quote is a joke. In no way is the inland revenue "not slow". Tax law lags way behind the tax dodgers. Funnilly enough there has been a bit of success with ordinary members of the public exerting moral pressure on tax avoiding (but legal) big business. That is usually much faster that any change in the law.
Also that quote is a joke. In no way is the inland revenue "not slow"
The quote is nearly 100 years old! Long before we have 100s of MBAs doing nothing but inventing tax avoidance vehicles as a full time job.
we have 100s of MBAs doing nothing but inventing tax avoidance vehicles as a full time job.
To be honest MBAs aren't very good at it, you want much more flexible thinkers.
To be honest MBAs aren't very good at it, you want much more flexible thinkers.
Eh? How does having a particular post grad disqualify you from flexible thinking?
How does having a particular post grad disqualify you from flexible thinking?
Probably doesn't, just my personal experience.
Lord Clyde's approach died in law with the GAAR.
Probably doesn't, just my personal experience.
Sorry you had that problem. How did you manage to stop being inflexible in your thinking then?
Living where I do I've probably paid a greater proportion of my income in tax than anyone else on here (around 50% in my most active years), and have made no attempt to "optimise" or avoid tax. Am I stupid?
Yes, but only because everyone is... tax is basically a scheme whereby peoples money is taken off them to pay for weapons, so that the rich can have wars to increase their wealth.
Obviously, there is all health care and stuff too, as you need a sufficiently healthy and motivated workforce to stimulate your country's economy on behalf of the banks.
Have you ever considered investing in landmines, cluster bombs or nuclear weapons? That's where the real money is, especially if you combine such investment with Energy Companies (oil and gas are still in vogue for now).
Such investments also encourage favourable media distortion to help cover your back, though you may find if you become too successful, you will be ruined by the cabals that control such interests that they may maintain control...
How did you manage to stop being inflexible in your thinking then?
Pure Maths
Living where I do I've probably paid a greater proportion of my income in tax than anyone else on here (around 50% in my most active years), and have made no attempt to "optimise" or avoid tax. Am I stupid
Only as stupid as someone on PAYE, plenty of self righteous lefties who are employed via there own single person company because the marginal tax is lower ala Ken Livingstone