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Remember of course that no-one is actually paying 27% of anything into anywhere - all that's happening is that these people are building up a pension promise from future taxpayers which today has an actuarial value of 27% of salary.

Clearly a nice pension - as long as future governments don't cut it back...

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My accountant , based in scotland, all done by email, charges me a flat rate of £25 per vat quarter submission.  I just give him a detailed excel spreadsheet, or he is happy to have remote access to zero / quickbooks etc. 

I would move to these online accounts systems but i cant for the life of my find one that gives a package for sole traders who are vat registered, with FIFO stock control built in. I dont sell time, i sell goods, and my customers are 90% vat registered , so i need to reclaim vat to be competitive or i am immediately 20% more expensive on the purchasing side. 

I agree problem is you need a mini ERP - selling time is easier. There are quite a few but aimed at managed services businesses where you also sell parts as well as time and not overly cheap

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I always wondered this, can you incorperate 3 businesses you are the owner, main shareholder, and MD of all 3, then have them all trade with each other in a closed loop?  Not sure why i would want this but is there any reason why not? 

They becomes associated businesses gets quite complex on the tax and accounting front and you essentially only have one set of allowances across the lot with 3 x the admin

Consolidated accounts are a pain

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It's not a fudge, it's tax law and accounting standards!

I realise exactly what and how they pay it since - I'm a chartered accountant lol!!

'a lot' of tax? The company I work for pays a lower % of tax than I do as an employee. That's the point. The owners of the business also pay less tax as a %.

If we get into absolute terms, I pay 'a lot' more tax than the vast majority of people in the UK. 

The point is equalisation, the point is removing loopholes, the point is simplification.

The point is someone has got to pay for this fricking circus and it should be born by those that gained the most from the government interventions, restrictions and support for their employees and search for a vaccine. 

On one thing we agree, people who got bailed should pay, this that got nothing should not

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Remember of course that no-one is actually paying 27% of anything into anywhere - all that's happening is that these people are building up a pension promise from future taxpayers which today has an actuarial value of 27% of salary.

Clearly a nice pension - as long as future governments don't cut it back...

I imagine the way it works is that in unfunded schemes the 27% of "employers contribution" is the actuarial figure that the employer needs to contribute to pay for the current cohort of pensioners. The figure needs to be adjusted regularly to meet costs, where the employer is the state it can and does help itself to whatever sum of public money it needs.  

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May as well rent it out.

It's rented now. I'd been underpricing it for the tenant, lovely old chap who has moved to Thailand. 

I don't particularly love being a landlord but it's just what's happened and if CGT changes the incentive is to stay this way so I may as well. People do need decent places to rent, run by decent landlords IMO.  

Edited by PeanutButter
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Landlord sounds like such a dirty word (not quite so much where I live as there's an abundance of property in many areas), but I agree with PeanutButter, sometimes people need rentals, so why not offer something decent and at value. My wife had a financial investment that in part, was in commercial real estate. During the first wave, that took a pounding with everyone working from home, and although I have no head for finances, I recommended she buy a place in a very popular coastal resort, that's less likely to be affected by future climate problems. The problem with the location is its full of people buying places (mostly apartments) for seasonal summer renting. Out of season many places have their shutters closed, so it leaves very little on the market for annual renters. She used her investment to buy a place for yearly renting, it's by the sea, but also close to the schools. We haven't got they keys yet, but thank goodness the money came out before this second wave as she'd already taken a loss. It should rent very quickly, and in 17 years or so, we'll hopefully be able to take early retirement and go live there ourselves as it's a location we love too.

Edited by crash-and-burn
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So you will decide to bank the increased tax bill and leave yourself at risk for any new BTL taxes that come along.

Not a risk I would be happy taking, better to sell now.

Yes I prefer future risk. I can’t sell now anyway, I have a new tenant. Even using the 6 month break clause would be distasteful to me unless he wanted to move anyway. I don’t sell under tenants. 

It may well cost me more but them’s the breaks.

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Landlord sounds like such a dirty word (not quite so much where I live as there's an abundance of property in many areas), but I agree with PeanutButter, sometimes people need rentals, so why not offer something decent and at value. My wife had a financial investment that in part, was in commercial real estate. During the first wave, that took a pounding with everyone working from home, and although I have no head for finances, I recommended she buy a place in a very popular coastal resort, that's less likely to be affected by future climate problems. The problem with the location is its full of people buying places (mostly apartments) for seasonal summer renting. Out of season many places have their shutters closed, so it leaves very little on the market for annual renters. She used her investment to buy a place for yearly renting, it's by the sea, but also close to the schools. We haven't got they keys yet, but thank goodness the money came out before this second wave as she'd already taken a loss. It should rent very quickly, and in 17 years or so, we'll hopefully be able to take early retirement and go live there ourselves as it's a location we love too.

Considering future climate change impacts is sensible. As is buying an asset that you can hold for a lifetime. 

Holiday homes should be taxed higher IMO. I don’t enjoy seeing these towns hollowed out in winter. 

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The reason why unless need the money, second or more rented or holiday homes are not sold even if there is extra CGT to pay, is because there is nowhere to put the money and people believe going by past experience there will always be capital growth an income if required and low borrowing costs to use as cheap money leaverage......as councils are finding themselves short of funds, they could up CT charges on empty property or holiday property......some areas both towns and cities have plenty of empty furnished and unfurnished homes, empty sometimes for months at a time.......give people an incentive to sell......low taxes, cheap borrowing, capital growth and regular income only encourages property and land speculation as a place to hoard money.....that is why so many do it and so many aspire to do it.;)

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The avoidable tax. 

It sounds good but as I mentioned on another thread this discourages sales.

If you own a house ‘worth’ £500k and knew if you sold it you would get £420k (ie in this made up example of mine CGT is £80k) would you sell? What happens is the house is stripped out for an overdue refurb, sold onto the kids, family or friend for £350k (genuine valuation done) and passed on. 

Not saying CGT increases are fundamentally a wrong idea rather it might not increase revenue....it depends on the finer detail. 

It’s a funny tax. On shares Etc it is completely avoidable because a £12.5k allowance with partial sales each year completely tax free Profits. £12.5k (or £25k a couple) is a huge amount of pure profit for 99% of the population. House differ though because they can’t be split. 

This will make an interesting watch but large CGT charges may make property become yielding assets to be past on rather than saleable assets. 

Hopefully some decent price falls by the removal of all the daft house price props should help mitigate CGT 😂😉
 


 

 

CGT is based on the value of the asset, even if given away or sold for £1

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CGT is based on the value of the asset, even if given away or sold for £1

That can't be right, surely it's only on the "gain" ? Who says what the value is? Is there a Government body / quango who decides the current value of everything?  What if it's a rare painting, surely it's value is only what someone will pay for it? So you bought it for £100k and sell it for £100k, so no gain no tax. You cant be "forced to auction it to the highest bidder. 

Also how do HMRC check? Is CGT not done via the "honour system" where there are no fixed market published prices. I understand buy say 100 Tesla shares for £1 , sell them 8 years later for £1001 , £100k gain.  But surely this is also on the honour system as do you not just declare this £100k gain on your Self Assessment Tax Return?  I see no boxes on a tax return where it asks for proof of purchase price and proof of sale price price documents to prove CGT gain? 

What if you never "bought" an asset but "created it" , then sold it? What is the Capital gain then?  Is the aquired vlaue classed as £0 so the gain is 100%.  

Say Banksy does his art on the side of your house and lets you keep it.  You never bought it, then you have the cladding bricks carefully de-mortered and the painting removed in 1 peice and you sell it at auction for £1m.  Was there any capital gain?  Was the Banksy not worth £1m when he gave it to you? or is your capital gain £1m , 100% ?

 

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Say Banksy does his art on the side of your house and lets you keep it.  You never bought it, then you have the cladding bricks carefully de-mortered and the painting removed in 1 peice and you sell it at auction for £1m.  Was there any capital gain?  Was the Banksy not worth £1m when he gave it to you? or is your capital gain £1m , 100% ?

 

Any non-wasting assets over 6k, I would have thought. 

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That can't be right, surely it's only on the "gain" ? Who says what the value is? Is there a Government body / quango who decides the current value of everything?  What if it's a rare painting, surely it's value is only what someone will pay for it? So you bought it for £100k and sell it for £100k, so no gain no tax. You cant be "forced to auction it to the highest bidder. 

Also how do HMRC check? Is CGT not done via the "honour system" where there are no fixed market published prices. I understand buy say 100 Tesla shares for £1 , sell them 8 years later for £1001 , £100k gain.  But surely this is also on the honour system as do you not just declare this £100k gain on your Self Assessment Tax Return?  I see no boxes on a tax return where it asks for proof of purchase price and proof of sale price price documents to prove CGT gain? 

What if you never "bought" an asset but "created it" , then sold it? What is the Capital gain then?  Is the aquired vlaue classed as £0 so the gain is 100%.  

Say Banksy does his art on the side of your house and lets you keep it.  You never bought it, then you have the cladding bricks carefully de-mortered and the painting removed in 1 peice and you sell it at auction for £1m.  Was there any capital gain?  Was the Banksy not worth £1m when he gave it to you? or is your capital gain £1m , 100% ?

 

In that example your cost is £Nill. So the full gain is taxable. Thats easy... Same as making something, although if you sell it- that's a business transaction and would be subject to corp tax / personal tax rather than CGT.

 

You are right that you can have lots of fun and games with "value".

A more interesting example would be a father selling part of the family business to his son...

What's it worth?

There is no market... no pool of buyers.. so the lack of liquidity is argued as a big haircut with HMRC.

You could then put in a clause that says the son has to carry on being employed by the business to maintain the stake.. another big haircut in value.

From starting position of the shares are worth £200k you can easily argue them down to £50k if that is your aim. Of course the father gets less for his shares.. but its avoiding something else. (Note for IHT i get there is business relief but making point with regards to value argument easier)

Edited by captainb
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Considering future climate change impacts is sensible. As is buying an asset that you can hold for a lifetime. 

Holiday homes should be taxed higher IMO. I don’t enjoy seeing these towns hollowed out in winter. 

Indeed.

FHL need yo be taxed at 2x equivalent resi council tax rather than zilch, nada, that small business rate relief offers.

Treasury were updating FHL taxing. Then covid hit.

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