homepage
  roll on christmas  
click here to find out more about ship of fools click here to sign up for the ship of fools newsletter click here to support ship of fools
community the mystery worshipper gadgets for god caption competition foolishness features ship stuff
discussion boards live chat cafe avatars frequently-asked questions the ten commandments gallery private boards register for the boards
 
Ship of Fools


Post new thread  Post a reply
My profile login | | Directory | Search | FAQs | Board home
   - Printer-friendly view Next oldest thread   Next newest thread
» Ship of Fools   »   » Oblivion   » Taxes and the rich - do whatever you can to not pay (Page 3)

 - Email this page to a friend or enemy.  
Pages in this thread: 1  2  3 
 
Source: (consider it) Thread: Taxes and the rich - do whatever you can to not pay
chris stiles
Shipmate
# 12641

 - Posted      Profile for chris stiles   Email chris stiles   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Eutychus:
That was certainly one of my fears, but then I discovered that Leave campaigner Boris Johnson has suggested that the super-rich are a put-upon minority, which kind of evens things out, perhaps...

But then that only really matters if his views get the same level of exposure as the current furore over Cameron. Which - unless Johnson's name is found amongst the papers - is rather unlikely at this point.
Posts: 4035 | From: Berkshire | Registered: May 2007  |  IP: Logged
Ricardus
Shipmate
# 8757

 - Posted      Profile for Ricardus   Author's homepage   Email Ricardus   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Eutychus:
'Tax planning' is something everybody does as soon as they have any money at all that can be taxed. Even if that is no more than shopping in a duty free zone or choosing a savings scheme with tax-free interest in preference to one that's taxed.

I don't think there's anything ethically wrong with this. The only alternative is to deliberately set out to pay as much tax as possible!

I think the question is whether one is obeying the letter or the spirit of the rules. For most people it may be debatable whether obeying the letter rather than the spirit is really a sin, but if one is the Prime Minister and therefore in charge of setting those rules, one has a greater responsibility to obey them in spirit as well.

--------------------
Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

Posts: 7247 | From: Liverpool, UK | Registered: Nov 2004  |  IP: Logged
Brenda Clough
Shipmate
# 18061

 - Posted      Profile for Brenda Clough   Author's homepage   Email Brenda Clough   Send new private message       Edit/delete post   Reply with quote 
And woe unto the tycoon who is switching from one mode to another: from energetic tax avoidance to the purity and rectitude of the candidate for office (please, no laughter). Behold the dazzling charitable impulses of Donald Trump.

--------------------
Science fiction and fantasy writer with a Patreon page

Posts: 6378 | From: Washington DC | Registered: Mar 2014  |  IP: Logged
Penny S
Shipmate
# 14768

 - Posted      Profile for Penny S     Send new private message       Edit/delete post   Reply with quote 
Could we reverse the revolutionary cry and claim that there should be no representation without taxation, and no-one involved in extreme avoidance should be able to contribute to political parties or be considered over the opinions of the little people who do pay their taxes? As if...

[ 11. April 2016, 15:03: Message edited by: Penny S ]

Posts: 5833 | Registered: May 2009  |  IP: Logged
quetzalcoatl
Shipmate
# 16740

 - Posted      Profile for quetzalcoatl   Email quetzalcoatl   Send new private message       Edit/delete post   Reply with quote 
There's also a wider aspect of tax avoidance/evasion, not just the technicalities of various financial instruments.

I mean that a rich elite are exiting from our society.

Quoting the tax expert, Nicholas Shaxson, 'you take your money elsewhere, to another country, to escape the rules and laws of the country where you operate', (quoted by Aditya Chakrabortty, see below*).

Of course, you can argue that we can all participate in this avoidance, for example, we can take out ISAs, or take out investments, which take some money abroad, to reduce tax.

The other interesting thing is that the super-rich, simultaneously take their money away, and pursue political power in the countries they have left (financially). I don't think there is a word for this.

*
http://tinyurl.com/hgkvx54

--------------------
I can't talk to you today; I talked to two people yesterday.

Posts: 9878 | From: UK | Registered: Oct 2011  |  IP: Logged
Brenda Clough
Shipmate
# 18061

 - Posted      Profile for Brenda Clough   Author's homepage   Email Brenda Clough   Send new private message       Edit/delete post   Reply with quote 
Big corporations are doing this in the US -- buying a smaller foreign firm and then essentially moving themselves over to Ireland or wherever, avoiding US taxes. Pfizer was the last to try this, and Obama pulled the plug on the tax break. They immediately canceled the merger, demonstrating that this was why they were doing it in the first place.
I would be good with stripping all the CEOs and execs of those firms of their citizenship.

--------------------
Science fiction and fantasy writer with a Patreon page

Posts: 6378 | From: Washington DC | Registered: Mar 2014  |  IP: Logged
quetzalcoatl
Shipmate
# 16740

 - Posted      Profile for quetzalcoatl   Email quetzalcoatl   Send new private message       Edit/delete post   Reply with quote 
I thought that Penny S had got a brilliant slogan, no representation without taxation. Well, this applies to politicians, and I suppose not to companies.

Of course, the big problem is secrecy. If politician Fatso Gatso has stashed $4 billion away in the Splishsplash Islands, where tax is nominal, who would ever know, except Mrs Fatso Gatso? And she quite likes her collection of shoes and diamonds.

Well, one thing about that is that the UK seems to administer a ton of these places, so make them give up their financial secrets. But who is going to do that?

--------------------
I can't talk to you today; I talked to two people yesterday.

Posts: 9878 | From: UK | Registered: Oct 2011  |  IP: Logged
quetzalcoatl
Shipmate
# 16740

 - Posted      Profile for quetzalcoatl   Email quetzalcoatl   Send new private message       Edit/delete post   Reply with quote 
The other odd thing about this is the way in which political life throws up these revelations. I often get depressed about the corruption of the rich, and they way they corrupt political life, yet on the other hand, the Panama papers have opened up a debate.

No doubt it will be closed down, and we will all be advised to look at the latest TV reality show, and not bother about such exotica. Still, it is hard to put the toothpaste in the tube, and the shit in the alimentary canal.

Gramsci: 'The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear'.

--------------------
I can't talk to you today; I talked to two people yesterday.

Posts: 9878 | From: UK | Registered: Oct 2011  |  IP: Logged
alienfromzog

Ship's Alien
# 5327

 - Posted      Profile for alienfromzog   Email alienfromzog   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by quetzalcoatl:
Of course, you can argue that we can all participate in this avoidance, for example, we can take out ISAs, or take out investments, which take some money abroad, to reduce tax.

No.

An ISA is a tax-exempt savings device designed specifically to allow individuals to save money and not pay tax on the interest.

Tax-avoidance vehicles in tax-havens are quasi-legal ways of avoiding tax against the design of the government.

It really is quantitatively different. Now, there is a point where the division blurs, and that is where we should have the debate but they really are not the same thing.

AFZ

--------------------
Everyone is entitled to his own opinion, but not his own facts.
[Sen. D.P.Moynihan]

An Alien's View of Earth - my blog (or vanity exercise...)

Posts: 2150 | From: Zog, obviously! Straight past Alpha Centauri, 2nd planet on the left... | Registered: Dec 2003  |  IP: Logged
Penny S
Shipmate
# 14768

 - Posted      Profile for Penny S     Send new private message       Edit/delete post   Reply with quote 
I've got round to reading today's Panama stuff. The man now in charge of HMRC was, in 1999, in a law firm whose clients included Ian Cameron's fund in Panama. But, more than that, in 1999, he put out a press release asking the government to withdraw proposals to tackle tax avoidance, giving wide-reaching powers to the Inland Revenue. He described taxation as 'legalised extortion'.

Guardian report

This is the leader of an entire gang of poachers got into the gamekeeping business, and I can't get my head about it.

Posts: 5833 | Registered: May 2009  |  IP: Logged
Enoch
Shipmate
# 14322

 - Posted      Profile for Enoch   Email Enoch   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Brenda Clough:
Big corporations are doing this in the US -- buying a smaller foreign firm and then essentially moving themselves over to Ireland or wherever, avoiding US taxes. Pfizer was the last to try this, and Obama pulled the plug on the tax break. They immediately canceled the merger, demonstrating that this was why they were doing it in the first place.
I would be good with stripping all the CEOs and execs of those firms of their citizenship.

Brenda, despite what some of our politicians also allege, Ireland is not a tax haven. Nor is it off shore.

There are also some very good business reasons for basing parts of a multinational there. It is in the eurozone. It adjoins the UK which is not. It speaks English. It has a good infrastructure. Its in a convenient timezone. It has an educated and economically sophisticated population. It's also weak on natural resources apart from agriculture. So it is keen to encourage the financial and marketing sector to come there, and gives them a relatively favourable tax treatment.

That is known as tax competition. Most people think that's OK but some people seem to regard it as a sort of intergovernmental cheating. But that's a matter of opinion. It doesn't make Ireland a tax haven or off shore.

Some of our politicians moan about this, but there are good reasons why, if you were the Irish government, you might do the same. If I were them, I would.

Nor, if Ireland offers these encouragements, does that make it wrong for companies to accept them, any more than it's wrong for citizens to take advantage of tax favours governments give them to encourage them to provide pensions for themselves, invest in solar panels or whatever.

[ 11. April 2016, 22:32: Message edited by: Enoch ]

--------------------
Brexit wrexit - Sir Graham Watson

Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008  |  IP: Logged
Doublethink.
Ship's Foolwise Unperson
# 1984

 - Posted      Profile for Doublethink.   Author's homepage     Send new private message       Edit/delete post   Reply with quote 
The problem with tax competition is that what should happen - you look like a good place to do business, I 'll move my operation here - doesn't.

Instead what happens is - you look like a good place to do business, I'll move my address here. Meanwhile taking advantage of the social infrastructure over here to actually run my business, social infrastructure financed by the tax regime over here.

This is why it appears unfair. The business is not paying to support the infrastructure it relies upon, at the same rate as others / at the rate that that infrastructure is being priced.

As if a couple goes shopping, one goes to sit in the asda coffee shop and read the paper and the other goes round Waitrose selecting goods. Then Waitrose dude texts asda dude the purchase list, who then pays asda whatever asda charges for those goods on the grounds they were shopping as a couple and asda has better prices.

--------------------
All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome. George Orwell

Posts: 19219 | From: Erehwon | Registered: Aug 2005  |  IP: Logged
Doublethink.
Ship's Foolwise Unperson
# 1984

 - Posted      Profile for Doublethink.   Author's homepage     Send new private message       Edit/delete post   Reply with quote 
(How can Ireland not be off-shore ? Its an island, and a foreign territory ?)

--------------------
All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome. George Orwell

Posts: 19219 | From: Erehwon | Registered: Aug 2005  |  IP: Logged
mr cheesy
Shipmate
# 3330

 - Posted      Profile for mr cheesy   Email mr cheesy   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Doublethink.:
The problem with tax competition is that what should happen - you look like a good place to do business, I 'll move my operation here - doesn't.

Instead what happens is - you look like a good place to do business, I'll move my address here. Meanwhile taking advantage of the social infrastructure over here to actually run my business, social infrastructure financed by the tax regime over here.

This is why it appears unfair. The business is not paying to support the infrastructure it relies upon, at the same rate as others / at the rate that that infrastructure is being priced.

As if a couple goes shopping, one goes to sit in the asda coffee shop and read the paper and the other goes round Waitrose selecting goods. Then Waitrose dude texts asda dude the purchase list, who then pays asda whatever asda charges for those goods on the grounds they were shopping as a couple and asda has better prices.

I think this is where I part company with this argument. Unless all countries in the EU (for the sake of this discussion) have exactly the same tax system, I can't see how realistically it would be possible to prevent countries from attempting to attract businesses by changing their corporation tax regimes.

The problem comes when the corporations use their headquarters address in a low-tax EU jurisdiction when conducting most/all of their business in higher tax jurisdictions via clever accounting tricks. So they try to tell us that they sell large amounts of coffee from the shops in the UK but, oh no there's no corporation tax to pay because the British arm had to pay £squillions to a holding company operating out of a PO Box in Luxembourg.

Or the broadly similar idea that one can be a non-dom (or even more bizarrely an inherited non-dom) whilst spending the vast majority of a life in the UK.

To me that is not a problem with competition with tax codes between EU countries but to do with wealthy individuals and corporations trying to avoid paying tax in the jurisdictions that they're actually trading or living in.

--------------------
arse

Posts: 10697 | Registered: Sep 2002  |  IP: Logged
chris stiles
Shipmate
# 12641

 - Posted      Profile for chris stiles   Email chris stiles   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Enoch:

There are also some very good business reasons for basing parts of a multinational there. It is in the eurozone. It adjoins the UK which is not. It speaks English. It has a good infrastructure. Its in a convenient timezone. It has an educated and economically sophisticated population.

Yes, there are some good reasons for setting up business in Ireland. Equally though, as mr_cheesy points out below, a number of companies are using Ireland as part of a general scheme of tax arbitrage and avoidance, via arrangements such as the Double Irish:

https://en.wikipedia.org/wiki/Double_Irish_arrangement

(Virtually all those companies named have a larger base in some other European country, in the case of Apple the discrepancy is probably the largest).

Posts: 4035 | From: Berkshire | Registered: May 2007  |  IP: Logged
anoesis
Shipmate
# 14189

 - Posted      Profile for anoesis   Email anoesis   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Eutychus:
'Tax planning' is something everybody does as soon as they have any money at all that can be taxed. Even if that is no more than shopping in a duty free zone or choosing a savings scheme with tax-free interest in preference to one that's taxed.

I don't think there's anything ethically wrong with this. The only alternative is to deliberately set out to pay as much tax as possible!

Wot? I had not, prior to reading your post, even heard of the phrase 'tax planning'. But I can assure you that at no point have I made a deliberate choice to pay as much tax as possible. Not because of piety or because I'm astonishingly squeaky-clean either. Just because, well, tax. It exists. So what? So do flies. I don't invite flies into my house and I suppose ideally I'd prefer they weren't there, but firstly, if they suddenly all disappeared I might be worried there was something a bit wrong with the ecosystem, and secondly, I'm damned if I'm going to spend half my waking hours twitching and walking around with a can of spray-poison because something might leave a dirty spot on my ceiling. It just.doesn't.matter.that.much. Which is why I have only ever been able to understand tax avoidance by the mega-rich as an ideological fight. After all, it's not as though they will have to go without anything if they pay their share.

--------------------
The history of humanity give one little hope that strength left to its own devices won't be abused. Indeed, it gives one little ground to think that strength would continue to exist if it were not abused. -- Dafyd --

Posts: 993 | From: New Zealand | Registered: Oct 2008  |  IP: Logged
Alan Cresswell

Mad Scientist 先生
# 31

 - Posted      Profile for Alan Cresswell   Email Alan Cresswell   Send new private message       Edit/delete post   Reply with quote 
Likewise, I haven't actively "tax planned". I have ISAs, but the tax benefits were secondary to my choices. The cash ISA currently earns next to no interest anyway, but when it was paying interest the product I have paid more than equivalent taxable products while retaining some ethical considerations. The investment ISAs were simply the easiest way to invest for the longer term, the introduction of ISAs had simply removed equivalent taxable products from the market.

--------------------
Don't cling to a mistake just because you spent a lot of time making it.

Posts: 32413 | From: East Kilbride (Scotland) or 福島 | Registered: May 2001  |  IP: Logged
Doublethink.
Ship's Foolwise Unperson
# 1984

 - Posted      Profile for Doublethink.   Author's homepage     Send new private message       Edit/delete post   Reply with quote 
I think we are agreeing with each other mr cheesy ?

[ 12. April 2016, 11:44: Message edited by: Doublethink. ]

--------------------
All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome. George Orwell

Posts: 19219 | From: Erehwon | Registered: Aug 2005  |  IP: Logged
Dave W.
Shipmate
# 8765

 - Posted      Profile for Dave W.   Email Dave W.   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Alan Cresswell:
Likewise, I haven't actively "tax planned". I have ISAs, but the tax benefits were secondary to my choices. The cash ISA currently earns next to no interest anyway, but when it was paying interest the product I have paid more than equivalent taxable products while retaining some ethical considerations. The investment ISAs were simply the easiest way to invest for the longer term, the introduction of ISAs had simply removed equivalent taxable products from the market.

I'm surprised to hear that. Do you mind saying what kind of product you're referring to?
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004  |  IP: Logged
Alan Cresswell

Mad Scientist 先生
# 31

 - Posted      Profile for Alan Cresswell   Email Alan Cresswell   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Dave W.:
I'm surprised to hear that. Do you mind saying what kind of product you're referring to?

A fairly basic investment fund - a mix of shares, bonds and a bit of cash. In a relatively safe mix. Nothing very fancy. Suitable for relatively small investments of a few thousand pounds, with the option of investing a small amount regularly rather than just a lump sum. And, not tied into a fixed term or part of a pension scheme. I'm sure such funds still exist that aren't ISA's, but with ISAs dominating they seem to have been pushed out of the market - certainly when we took out our investment ISAs a few years back our financial advisor only produced different ISA options, and no other option. There are fixed term funds (initial lump sum, maturing after x number of years), high return funds (with the caveat that they may not perform as well as hoped - ie: they are higher risk), funds if you have more than the ISA limit to invest.

--------------------
Don't cling to a mistake just because you spent a lot of time making it.

Posts: 32413 | From: East Kilbride (Scotland) or 福島 | Registered: May 2001  |  IP: Logged
Sipech
Shipmate
# 16870

 - Posted      Profile for Sipech   Author's homepage     Send new private message       Edit/delete post   Reply with quote 
ISAs have effectively been made redundant, now that there's a £1,000 personal savings allowance (£500 for higher rate tax payers). With interest rates as artificially suppressed as they are, there's naff all interest to be earned gross anyway, so unless you have a massive lump of cash sitting around, you're unlikely to earn more than £1,000 of interest in a given year, making the vast majority of savings accounts little different from an ISA as far as tax is concerned.

--------------------
I try to be self-deprecating; I'm just not very good at it.
Twitter: http://twitter.com/TheAlethiophile

Posts: 3791 | From: On the corporate ladder | Registered: Jan 2012  |  IP: Logged
Alan Cresswell

Mad Scientist 先生
# 31

 - Posted      Profile for Alan Cresswell   Email Alan Cresswell   Send new private message       Edit/delete post   Reply with quote 
Cash ISAs are effectively redundant - there are plenty of other products with higher interest rates and, as you say, effectively no tax for the majority of people.

Investment ISAs however are still the best option for small investors. And, the new ISAs for first time buyers are exceptionally good value - not for the tax benefits or interest, but the extra the government will add.

--------------------
Don't cling to a mistake just because you spent a lot of time making it.

Posts: 32413 | From: East Kilbride (Scotland) or 福島 | Registered: May 2001  |  IP: Logged
Marvin the Martian

Interplanetary
# 4360

 - Posted      Profile for Marvin the Martian     Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Enoch:
Ireland ... is keen to encourage the financial and marketing sector to come there, and gives them a relatively favourable tax treatment.

That is known as tax competition. Most people think that's OK but some people seem to regard it as a sort of intergovernmental cheating. But that's a matter of opinion. It doesn't make Ireland a tax haven or off shore.

I'm not sure I see the difference between Ireland offering low taxes in order to encourage corporations to go there and Panama offering low taxes in order to encourage corporations to go there.

--------------------
Hail Gallaxhar

Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003  |  IP: Logged
Sioni Sais
Shipmate
# 5713

 - Posted      Profile for Sioni Sais   Email Sioni Sais   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by Enoch:
Ireland ... is keen to encourage the financial and marketing sector to come there, and gives them a relatively favourable tax treatment.

That is known as tax competition. Most people think that's OK but some people seem to regard it as a sort of intergovernmental cheating. But that's a matter of opinion. It doesn't make Ireland a tax haven or off shore.

I'm not sure I see the difference between Ireland offering low taxes in order to encourage corporations to go there and Panama offering low taxes in order to encourage corporations to go there.
Regulation and transparency could be two differences between a business friendly economy and one that is open to abuse.

--------------------
"He isn't Doctor Who, he's The Doctor"

(Paul Sinha, BBC)

Posts: 24276 | From: Newport, Wales | Registered: Apr 2004  |  IP: Logged
Dave W.
Shipmate
# 8765

 - Posted      Profile for Dave W.   Email Dave W.   Send new private message       Edit/delete post   Reply with quote 
Thanks for the answer, Alan. In my experience with the US counterpart, the Individual Retirement Account (IRA), the special tax treatment is a characteristic of the account, not the asset held within the account - I don't think there's anything you can buy within an IRA that you can't buy in a regular, non-tax advantaged brokerage account. I've owned shares in the same mutual fund in both kinds of account, and the only difference was that I didn't have to pay tax on dividends from the shares in the IRA.
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004  |  IP: Logged
Alan Cresswell

Mad Scientist 先生
# 31

 - Posted      Profile for Alan Cresswell   Email Alan Cresswell   Send new private message       Edit/delete post   Reply with quote 
For an ISA the non-taxable characteristic is with the account. Yes, I could probably find out the details of the shares and bonds that the fund has and buy equivalent components myself, receiving the dividends directly (and, paying tax on it). But, the fund has shares in multiple companies (spreading the risk) and bonds. It would be a lot of work to do that myself, much easier to simply invest in a fund someone else manages. Before the introduction of ISAs with relatively large investment limits (previously there had been ISAs, and PEPs before that, with tax advantages but limited to investments of only a few thousand pounds per year) there would have been similar funds for those who wanted to invest slightly more than the ISA limit. But, with the raising of the ISA limit they would have been squeezed out of the market - why invest in a fund which is taxed when there is an equivalent that is not taxed?

There are still funds for people who have more than the ISA limit to invest, but they would be out of the range of the cash I'm ever likely to have to invest. Those would include the "tax free" offshore funds.

--------------------
Don't cling to a mistake just because you spent a lot of time making it.

Posts: 32413 | From: East Kilbride (Scotland) or 福島 | Registered: May 2001  |  IP: Logged
no prophet's flag is set so...

Proceed to see sea
# 15560

 - Posted      Profile for no prophet's flag is set so...   Author's homepage   Email no prophet's flag is set so...   Send new private message       Edit/delete post   Reply with quote 
ISA, IRA. Did a search on what these things are. Is ISA just for any form of savings or for retirement? "Individual savings/retirement account" seems to be what the abbreviations mean. Is this correct?

What is a PEP?

RRSP and RRIF for retirement in Canada. Registered Retirement Saving Plan, and Registered Retirement Income Fund . RRIFs are created from RRSPs. We also have TFAs - Tax Free Savings Accounts.

The Cdn limits on annual RRSP are something like $24,900 if you make more than about $120. For TFAs, which are not tied to income, the limit is $5,500. You can put any kind of investment in these. Cash, stocks, fund shares. The interest in TFAs is untaxable when withdrawn. RRSP/RRIF is taxable at the rate you have when it is withdrawn. Those of us without pensions rely on these for retirement which creates a fair bit of anxiety for many.

The number of people in Canada with fully-funded pensions have declined since the 1980s. Pension contributions from both employer and employee are put into an investment account. If the market or interest rates are good or bad, this will determine the pension income. Fully-funded pensions are those that allow retirement after some calculation between age and years of service and some indexed percentage of best years of pay.

My conclusion about pensions is that people are more anxious about retiring these days than the generations before and will have to work longer whether they want to or not. My father is collecting his 30th year of fully funded pension. Which exceeds the contributions he made.

[ 13. April 2016, 01:32: Message edited by: no prophet's flag is set so... ]

--------------------
Out of this nettle, danger, we pluck this flower, safety.
\_(ツ)_/

Posts: 11498 | From: Treaty 6 territory in the nonexistant Province of Buffalo, Canada ↄ⃝' | Registered: Mar 2010  |  IP: Logged
Alan Cresswell

Mad Scientist 先生
# 31

 - Posted      Profile for Alan Cresswell   Email Alan Cresswell   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by no prophet's flag is set so...:
ISA, IRA. Did a search on what these things are. Is ISA just for any form of savings or for retirement? "Individual savings/retirement account" seems to be what the abbreviations mean. Is this correct?

What is a PEP?

ISAs are for any form of saving, and not linked to retirement although investment funds are (by their nature) long term and often used to provide an additional nest egg for retirement. Funds can be removed at any time without loss of tax benefits, whereas for a retirement fund that would result in a loss of the tax benefit if cashed in prior to retirement.

PEPs (Personal Equity Plans) were precursors of ISAs - they were investment funds, the cash equivalent was a TESSA (Tax Exempt Special Savings Account). Both accounts were replaced by ISAs, initially with seperate limits for cash and investment (£3,000 cash and £4,000 investment per annum). In 2014 the limit was raised to £15,000, which could be split anyway you wanted between cash and investment.

--------------------
Don't cling to a mistake just because you spent a lot of time making it.

Posts: 32413 | From: East Kilbride (Scotland) or 福島 | Registered: May 2001  |  IP: Logged
Dave W.
Shipmate
# 8765

 - Posted      Profile for Dave W.   Email Dave W.   Send new private message       Edit/delete post   Reply with quote 
Alan, I wonder if you and I perhaps don't mean quite the same thing by "account" and "fund". In the usage I'm familiar with, an account is like a bucket which can contain various assets - cash, bonds, individual stocks, mutual funds, or a mixture of any of these. Each mutual fund, in turn, may purchase many different assets.
quote:
Originally posted by Alan Cresswell:
For an ISA the non-taxable characteristic is with the account.

This sounds like a US-style IRA. But with this:
quote:
Yes, I could probably find out the details of the shares and bonds that the fund has and buy equivalent components myself, receiving the dividends directly (and, paying tax on it). But, the fund has shares in multiple companies (spreading the risk) and bonds. It would be a lot of work to do that myself, much easier to simply invest in a fund someone else manages.
ISTM you're not talking about an account any more, but about an asset within the account. The features you describe (diversity, professional management) are common to mutual funds (e.g.) - but shares of such mutual funds can be purchased within either a tax-advantaged account (like an IRA) or a regular brokerage account. In neither case would you have to buy the individual components yourself.
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004  |  IP: Logged
chris stiles
Shipmate
# 12641

 - Posted      Profile for chris stiles   Email chris stiles   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Dave W.:

ISTM you're not talking about an account any more, but about an asset within the account. The features you describe (diversity, professional management) are common to mutual funds (e.g.) - but shares of such mutual funds can be purchased within either a tax-advantaged account (like an IRA) or a regular brokerage account.

Yes, this is mostly the case with the ISAs Alan is talking about. The UK equivalent of the mutual funds with be Unit Trusts(UTs) and OIECs(Open Ended Investment Companies). They can be held both inside and outside an ISA.

Historically the UK market for such funds was not as well developed as that in the US, and prior to the introduction of ISAs most wrappers charged quite high fees (we didn't really have the kinds of low cost index funds that Vanguard popularised in the US). One of the measures that the government put in place when ISAs were introduced were guidelines on the level at which charges could be levied. As a result, to this day there is usually a difference on the charges levied on buying a UT inside an ISA and buying the same UT outside the ISA.

Posts: 4035 | From: Berkshire | Registered: May 2007  |  IP: Logged
TonyK

Host Emeritus
# 35

 - Posted      Profile for TonyK   Email TonyK   Send new private message       Edit/delete post   Reply with quote 
So, Mr Corbyn (see, I'm being polite again! For the moment anyway!) has submitted for public scrutiny a copy of his (alleged) tax return to HMRC for 2014/5.

He boasted about how much tax he paid, and said that he had no income other than what he earned.

However, this self-styled advocate of responsible tax handling, this persecutor of those finding legal ways to reduce their tax levels, has at least one serious question to answer (which AFAICS he has not done yet.)

There was not a mention on his purported tax return of his state pension (worth a basic £6K approx. per year - more if he has accumulated any supplementary state pension) nor of any private pensions - he has at least one.

If this was a copy of his actual tax return, then I wonder when HMRC will take action and what penalties he will face?

If it is not a copy of his actual tax return - then why is he claiming it is?

A Labour party spokesman is reported as saying that Mr Corbyn's pensions were 'taxed at source, so there were no problems'. False on two accounts - state pension is always paid gross, and in any case all sources of income, whether taxed or note must be declared on the tax form.

Like I said earlier - I longer trust any of them...

--------------------
Yours aye ... TonyK

Posts: 2717 | From: Gloucestershire | Registered: May 2001  |  IP: Logged
Brenda Clough
Shipmate
# 18061

 - Posted      Profile for Brenda Clough   Author's homepage   Email Brenda Clough   Send new private message       Edit/delete post   Reply with quote 
And, on this side of the pond, Donald Trump won't release his tax returns.

--------------------
Science fiction and fantasy writer with a Patreon page

Posts: 6378 | From: Washington DC | Registered: Mar 2014  |  IP: Logged
Penny S
Shipmate
# 14768

 - Posted      Profile for Penny S     Send new private message       Edit/delete post   Reply with quote 
P'raps what we need from Mr Corbyn is his Tax Code notification, which will detail the way his pension has been factored in by HMRC. It is on mine, anyway.
Posts: 5833 | Registered: May 2009  |  IP: Logged
Doc Tor
Deepest Red
# 9748

 - Posted      Profile for Doc Tor     Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by TonyK:
A Labour party spokesman is reported as saying that Mr Corbyn's pensions were 'taxed at source, so there were no problems'. False on two accounts - state pension is always paid gross, and in any case all sources of income, whether taxed or note must be declared on the tax form.

Having dealt with this for my mother last year, you're wrong.

While the state pension is paid gross, the tax code applied by the HoC will take this into account, by taxing the total (pension + earned income) via PAYE.

So the Labour spokesbeing was absolutely correct. He's taxed at source.

--------------------
Forward the New Republic

Posts: 9131 | From: Ultima Thule | Registered: Jul 2005  |  IP: Logged
TonyK

Host Emeritus
# 35

 - Posted      Profile for TonyK   Email TonyK   Send new private message       Edit/delete post   Reply with quote 
Doc Tor - I agree that the PAYE code on one of his other income sources will be adjusted accordingly to pay the tax required - but whereas private pensions deduct tax and pay net, State Pension is paid gross to the individual - it is not taxed at source, but the tax is still deducted. However, I agree that it is in effect paid net.

Regardless, pension income must still be declared with all other income, whether taxed at source or not, on the tax form. I don't know offhand whether or not it is a criminal offence to fail to declare income, but it seems to me to be tax evasion.

--------------------
Yours aye ... TonyK

Posts: 2717 | From: Gloucestershire | Registered: May 2001  |  IP: Logged
chris stiles
Shipmate
# 12641

 - Posted      Profile for chris stiles   Email chris stiles   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by TonyK:

Regardless, pension income must still be declared with all other income, whether taxed at source or not, on the tax form. I don't know offhand whether or not it is a criminal offence to fail to declare income, but it seems to me to be tax evasion.

What tax was being evaded?
Posts: 4035 | From: Berkshire | Registered: May 2007  |  IP: Logged
quetzalcoatl
Shipmate
# 16740

 - Posted      Profile for quetzalcoatl   Email quetzalcoatl   Send new private message       Edit/delete post   Reply with quote 
Fuck me, tax havens are estimated to hold £20 trillion in hidden assets, but Corbyn hasn't written down his pension! Hold the front page, we have a winner.

--------------------
I can't talk to you today; I talked to two people yesterday.

Posts: 9878 | From: UK | Registered: Oct 2011  |  IP: Logged
mr cheesy
Shipmate
# 3330

 - Posted      Profile for mr cheesy   Email mr cheesy   Send new private message       Edit/delete post   Reply with quote 
It seems to me that there is a major difference between not properly declaring something with no tax implications (a UK pension already taxed) on one hand and expecting everyone to believe your abbreviated tax declaration that isn't even a full tax return and which you've admitted includes capital gains from a fund in a tax-haven on the other.

The former might indeed be a technical breach which may (or may not) require a fine and an adjustment. The latter is just asking us to believe that a document that you're waving about as true because you say it is true.

Fairly obviously, if you were trying to hide monies from tax, they wouldn't appear on your tax return and it wouldn't be as easy as saying "oh, hang on, you've not filled the box for your pension".

[ 13. April 2016, 20:56: Message edited by: mr cheesy ]

--------------------
arse

Posts: 10697 | Registered: Sep 2002  |  IP: Logged
Sioni Sais
Shipmate
# 5713

 - Posted      Profile for Sioni Sais   Email Sioni Sais   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by chris stiles:
quote:
Originally posted by TonyK:

Regardless, pension income must still be declared with all other income, whether taxed at source or not, on the tax form. I don't know offhand whether or not it is a criminal offence to fail to declare income, but it seems to me to be tax evasion.

What tax was being evaded?
We won't know unless we see his tax return. In that respect he's just like Cameron and Osborne (although I suspect their numbers are larger and their accountants are smarter).
Posts: 24276 | From: Newport, Wales | Registered: Apr 2004  |  IP: Logged
chris stiles
Shipmate
# 12641

 - Posted      Profile for chris stiles   Email chris stiles   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Sioni Sais:
We won't know unless we see his tax return.
[/qb]

Which HMRC have seen - and their verdict is that it's a technical error - the kind of error someone may make if they were filing their tax return themself.

If there had been a financial impact the papers would be full of it by now. As it is, they are forced to go with the less compelling 'man who works for 30 years gets paid for 30 years' story.

Posts: 4035 | From: Berkshire | Registered: May 2007  |  IP: Logged
mr cheesy
Shipmate
# 3330

 - Posted      Profile for mr cheesy   Email mr cheesy   Send new private message       Edit/delete post   Reply with quote 
As Mark Steel says:

quote:
It also turns out Corbyn paid too much tax, having stated he earned more than he did. We could quibble about the too much/too little detail – but he paid the wrong amount. This seems to be the Conservative argument about tax avoidance: we’re all up to it in our own way, so if you give your son three quid for mowing the lawn without paying VAT, you’re no different to an investment banker squirreling £10bn in the Virgin Isles so he can keep the lot and buy a Rembrandt to use as a dishcloth.

If you express discontent about it, you’re asked ‘do you have an ISA, because THAT’S tax avoidance’? I suppose it is. If you buy an apple rather than spending that money on a house, you’re sneakily avoiding stamp duty. Who are you to complain about Google?



--------------------
arse

Posts: 10697 | Registered: Sep 2002  |  IP: Logged
sharkshooter

Not your average shark
# 1589

 - Posted      Profile for sharkshooter     Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Baptist Trainfan:
... I also have a question: if one is super-rich, why does one feel the need to avoid/evade tax? ...

It is not always that one feels the need to avoid tax. Tax planning has been authorized in England (and Canada) since the Duke of Westminster tax case in 1934, where we find this gem:

quote:
Every man is entitled if he can to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow tax-payers may be of his ingenuity, he cannot be compelled to pay an increased tax.
The legal issue arises when one uses the provisions of a tax act to arrive at a result which is not in the spirit of the act. This is when tax planning becomes aggressive tax planning (another word for tax avoidance). This is something which is extremely difficult to enforce, because each step in such a plan is legal in and of itself, but the result is offensive.

Tax evasion is a different matter, and includes simple issues like failing to report income, or failing to pay a sales tax when one is due.

--------------------
Let the words of my mouth, and the meditation of my heart, be acceptable in thy sight, O LORD, my strength, and my redeemer. [Psalm 19:14]

Posts: 7772 | From: Canada; Washington DC; Phoenix; it's complicated | Registered: Oct 2001  |  IP: Logged
PaulTH*
Shipmate
# 320

 - Posted      Profile for PaulTH*   Author's homepage     Send new private message       Edit/delete post   Reply with quote 
quote:
originally posted by Uriel:
Cameron needs to come clean on this - what happened to his father's offshore money, where is it now, where could it go in the future. And most importantly, does he agree or disagree with his father's actions in denying the Treasury large sums of tax revenue

A few years ago, David Cameron critcised the comedian Jimmy Carr, because he was using a tax loophole involving a company in Jersey, which meant he was only paying around 2% tax. Cameron referred to this as "immoral." I take the same view now as I did then. There's no such thing as an immoral avoidance of tax. What people do is either legal or illegal. None of us pays tax because we enjoy it. We do so because we're required to. I would, for example, always Gift Aid my donations to my church because I would rather the church has a bit of extra money from me, and the state less.

If anyone is avoiding tax in an illegal way, they can and should be prosecuted for it. If they've found a legal loophole, they are doing nothing wrong until that loophole is closed. This is what governments, with international cooperation, should be doing. They should be eliminating loopholes and tax havens which allow mostly the rich to stash their money in a way which avoids the tax the rest of us have no opportunity to avoid. I doubt if Cameron thinks his father did wrong to deny the treasury vast sums of money, and neither do I if he was acting within the law. Tax avoidance by the well off needs to be tackled by law and governments working together to shut down the opportunities for it to happen.

--------------------
Yours in Christ
Paul

Posts: 6387 | From: White Cliffs Country | Registered: May 2001  |  IP: Logged
Gee D
Shipmate
# 13815

 - Posted      Profile for Gee D     Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by sharkshooter:
quote:
Originally posted by Baptist Trainfan:
... I also have a question: if one is super-rich, why does one feel the need to avoid/evade tax? ...

It is not always that one feels the need to avoid tax. Tax planning has been authorized in England (and Canada) since the Duke of Westminster tax case in 1934, where we find this gem:

quote:
Every man is entitled if he can to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow tax-payers may be of his ingenuity, he cannot be compelled to pay an increased tax.
The legal issue arises when one uses the provisions of a tax act to arrive at a result which is not in the spirit of the act. This is when tax planning becomes aggressive tax planning (another word for tax avoidance). This is something which is extremely difficult to enforce, because each step in such a plan is legal in and of itself, but the result is offensive.

Tax evasion is a different matter, and includes simple issues like failing to report income, or failing to pay a sales tax when one is due.

How do you determine "the spirit of the act"? Ultimately, a court reads and interprets the Act using the words chosen by the legislature. The interpretation (at least here) can be assisted by reading a part of the proceedings of the legislature, but they cannot override the words finally adopted.

Take this example: I can choose whether to spend some money buying shares, or to carry out renovations/improvements to my house. If I choose the former, I pay tax on the income from the shares and when I sell them, I pay capital gains tax on any increase in price (much simplified, but you can get the gist of it). If I carry out the work, I have chosen a course or ordering my affairs which results in my income being less than it might otherwise be. By carrying out the work to my own house, there is no capital gains tax on any increase in value attributable to the work I did. Am I wrong to take the latter course? Is paying less tax somehow against some spirit of the Act? Why?

--------------------
Not every Anglican in Sydney is Sydney Anglican

Posts: 7028 | From: Warrawee NSW Australia | Registered: Jun 2008  |  IP: Logged
simontoad
Ship's Amphibian
# 18096

 - Posted      Profile for simontoad   Email simontoad   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by quetzalcoatl:
I thought that Penny S had got a brilliant slogan, no representation without taxation. Well, this applies to politicians, and I suppose not to companies.

Of course, the big problem is secrecy. If politician Fatso Gatso has stashed $4 billion away in the Splishsplash Islands, where tax is nominal, who would ever know, except Mrs Fatso Gatso? And she quite likes her collection of shoes and diamonds.

Well, one thing about that is that the UK seems to administer a ton of these places, so make them give up their financial secrets. But who is going to do that?

I hate bloody Fatso Gatso.

--------------------
Human

Posts: 1571 | From: Romsey, Vic, AU | Registered: May 2014  |  IP: Logged
Soror Magna
Shipmate
# 9881

 - Posted      Profile for Soror Magna   Email Soror Magna   Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Penny S:
Could we reverse the revolutionary cry and claim that there should be no representation without taxation ...

Well, that was sort of Mitt Romney's 47% argument - that people who don't pay income tax are "takers", not "makers", in Paul Ryan's terms. Except that could also be applied to the 1% stashing billions in offshore mattresses. They clearly have no intention to make or create anything with that wealth.

Oopsie.

--------------------
"You come with me to room 1013 over at the hospital, I'll show you America. Terminal, crazy and mean." -- Tony Kushner, "Angels in America"

Posts: 5430 | From: Caprica City | Registered: Jul 2005  |  IP: Logged



Pages in this thread: 1  2  3 
 
Post new thread  Post a reply Close thread   Feature thread   Move thread   Delete thread Next oldest thread   Next newest thread
 - Printer-friendly view
Go to:

Contact us | Ship of Fools | Privacy statement

© Ship of Fools 2016

Powered by Infopop Corporation
UBB.classicTM 6.5.0

 
follow ship of fools on twitter
buy your ship of fools postcards
sip of fools mugs from your favourite nautical website
 
 
  ship of fools