Adarmo

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About Adarmo

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  1. Adarmo

    The 80k man

    No I was stating that the current threshold is £325k. Fact is if you have two parents living in a house worth a significant amount then you can inherit £1m tax free. My point all along is that it's crazy to tax unearned wealth at a rate below (or at zero) the rate of tax on earned income. It is not abstract socialist moralising, I would be in favour of the state being a maximum of 25% of the economy as advocated by Keynes but that would involve halving it. However, if we must fund the current status quo then this is a more equitable and better way of doing it. I'm not sure where you've come up with state intervention? The state already intervenes on this just the tax thresholds are higher. And I'll say it again, the increase in tax take from IHT would be offset with a reduction in income tax.
  2. Adarmo

    The 80k man

    It would be, but why would London be devoid of people? It is land value, not apartment value, so that building plot for £25m with 250 apartments on it is only £100k LVT per apartment. Someone like me would suffer more, detached house on a good plot probably worth around £300k as a building site.
  3. Adarmo

    The 80k man

    So my point isn't directed at Boomers. I don'[t agree with your arguments at all. Morally, the state can't encourage work (through years of education investment) and then snatch back half of what you earn when you get a job? I think the argument is then that tax is amoral? A country needs tax to pay for it's protection, infrastructure, services etc. How much tax is a function of the government and the electorate but my point stands, it is crazy to tax someone nothing for getting £1m while it is fine to tax them 40% + for working for it. At the moment, the very opposite of what WF describes takes place. Keep your massive under occupied home and you benefit from an even bigger tax break on death (fat use that is for you). Fail to see the issue at all with taxing unearned wealth gain at the marginal rate of income. Around here (Wokingham) £300k gets you about the same and the average Boomer probably lives in an £750k to £1m house. Not typical of the country agreed.
  4. Adarmo

    The 80k man

    I don't understand your point? If the rules came in as WF suggested and suddenly boomers are keen on selling and downsizing then that creates a supply f expensive property to market that hasn't been seen fora while. Most people would be second steppers to buy those places so what would likely happen is a freeing up and movement of the market. I think that it might actually impair prices in the long run since houses are always given special tax status by every past government so any more to tax them might make people have to think a little harder about putting their money elsewhere. Ultimately the top end has an impact on the bottom end if that's the point you're making?
  5. Adarmo

    The 80k man

    Maybe, but the suppressing factor would be that cash is realised by selling properties at the top end of the market. Great for all the people involved the chain of sale of houses, great for old duffers, great for young. Wight Flight for PM.
  6. Adarmo

    The 80k man

    I like this more than my original idea!
  7. Adarmo

    The 80k man

    One of my favourate things around teh end of the cold war is that (apparently) some US government department mamaged to work out that the Russians would try and match them militarily man for man, plane for plane, tank for tank etc. The Yanks soon realised that the way to win without it going hot was just to build loads of extensive stuff like carrier groups, nuclear subs and a fancy space program. I made my own jam once. Only ate one jar of eight. Still int eh cupboard. Then I bought more jam the other day because it looked nice and was on offer.
  8. Adarmo

    The 80k man

    What you're describing is a well known phenomenon, salience. The more salient a tax is the more it is resisted. IHT is a good exaple of this. Another is council tax. Ask the average bloke in the the pub how much income tax he paid last year (assuming he's not filling in tax returns) and he'll not have a clue. Ask him what his council tax is and he'll tell you to the nearest hundred. So yes you're right, the pitch sucks because people are unable to look at an overall tax take and timing of that take. In the UK an only child can inherit £1m before paying any tax at all. Most of my video games are FPS. I like being financially secure but that comes from work rather than a planned inheritance. I'm not sure about the French example and it is very difficult to compare our economies and workforce. But, the French also suffer higher income tax. They are likely less motivate d in my experience because their labour laws are inane. Take Canada as the opposite example, zero inheritance tax I think, but they all seem pretty motivated to work. What I was talking about is the rational of taxing someone nothing to have £1m transferred to them for doing nothing, or taxing someone a fortune for working their botties off all day.
  9. Adarmo

    The 80k man

    What is interesting about the Reagan example is that tax revenues actually increased by a slower amount than when the tax rates were higher in the earlier years and that is despite the US finallly starting to come out of stagflation (not to do with the tax cuts FYI but due to wider 'Reaganomic policies'). Tax revenues raise almost every year pretty much regardless of income tax tinkering. Reducing the very highest marginal income tax rates is not exactly slashing taxes either, we are talking about tax rates of the very highest earners If what you say is true (and it isn't) what is the optimal tax rate and where is the Laffer Curve equation? Answer: most research papers place the optimal tax rate between 60% and 70% (oddly the rate that the highest earning Americas were paying at the margins before the Reagan tax cuts) Next question, why isn't that the tax rate? Answer: because of competition for government. The revenue maximising condition is no the socio-economic welfare maximisnig one. Most researchers place virtually every country to the left of the optimal point i.e. lower tax rates than would maximise tax revenues. Reagan was a demented actor. He followed his advisors many of whom were well connected and very rich. What they succeeded in doing was tripling the national debt in eight years and having the top 1% income double and that in itself might have been down to the tax cuts since the wealthy would pay themselves higher salaries rather than taking capital gains. Finally, according to a 2003 Treasury study, the tax cuts in the Economic Recovery Tax Act of 1981 resulted in a significant decline in revenue relative to a baseline without the cuts, approximately $111 billion (in 1992 dollars) on average during the first four years after implementation or nearly 3% GDP annually.[73][74] Other tax bills had neutral or, in the case of the Tax Equity and Fiscal Responsibility Act of 1982, a (~+1% of GDP) increase in revenue as a share of GDP. https://en.wikipedia.org/wiki/Reaganomics
  10. Adarmo

    The 80k man

    Fantastic strategy FH! Great use of tax efficiency plus regular investing like this makes use of the pound-cost-averaging which is probably the keystone of investing, along with reinvesting dividends.
  11. Adarmo

    The 80k man

    There was a great model in the olden days of using VCTs to gross up your pension contributions, in a sort of different way around to the way you are describing, so money into VCT, get tax refund plus investment back and push into SIPP. However, the rub is getting your investment back. Most VCTs you'll be lucky to not lose the tax relief. We only recommended them for guys with nowhere else to stick their money..
  12. Adarmo

    The 80k man

    Fair points, and also the govt is bothered about having this situation as cashflow negative for them. They';d rather a retirement ISA since no tax relief at source but the tax relief comes later. Another way of robbing the future I guess is one way to look at it.
  13. Adarmo

    The 80k man

    You can if you liquidate one company via a Members Voluntary Liquidation. But be very careful.You cannot wind up 2019 Ltd and open 2020 Ltd doing exactly the same thing. You should only consider MVL if you do not intend to carry out any similar trading via a Limited company for a significant period of time. This cannot be used as an avoidance strategy. https://www.icaew.com/technical/tax/tax-faculty/taxline/taxline-2019/july-2019/1-company-distributions-in-a-winding-up The relevant legislation is at s396B and s404A, ITTOIA 2005. It is a targeted anti-avoidance rule (TAAR), which treats distributions made to an individual in respect of share capital in the winding up of a UK resident company as a distribution subject to income tax, rather than subject to capital gains tax, if four conditions are met. Paraphrasing, the conditions are: Condition A – the individual has at least a 5% interest in the company immediately before the winding up. Condition B – the company is, or was, at any time in the two years up to the start of the winding up, a close company. Condition C – at any time in the two years from the date on which the distribution is made the individual, or a partnership or company in which they are involved or a connected person, directly or indirectly, carries on a trade or activity which is the same as, or similar to, that carried on by the company or an effective 51% subsidiary of the company. Condition D – it is reasonable to assume, having regard to all the circumstances, that the main purpose or one of the main purposes of the winding up is, or forms part of arrangements that are, the avoidance or reduction of an income tax charge.
  14. Adarmo

    The 80k man

    Because there is only a CGT with Ent.Rel if the company is sold, and if the case is that you're selling a company with £1m in cash in it for £1m it's sort of obvious you're doing it to evade tax which would be very illegal. However, if you sell one company to another and the value is based on something other than the value of cash sitting on the balance sheet and you stick to the rules/spirit of the tax code you'd be ok. They make the rules to stop people doing just that. They make it complex because accountants go on secondment to HMRC and the Treasury and advise on tax strategy and then they come back into their firms an expert in this area and charge out at £400/hour. Personally I hate this set up. There are some fantastically bright people working in tax and legal consultancies effectively doing nothing other than minimising a tax liability. These guys could literally be curing cancer or building fusion reactors or figuring out how to stop odd socks coming out of washing machines.
  15. Adarmo

    The 80k man

    A director can just loan the company money at a whim. I can extend a line of credit to you to buy my company and you repay me over time provided we're both happy with that. You don't need the cash for the loan. However, in your example you are evading tax since there is already cash in the business and it forms probably all of the balance sheet (if he's an actor). The example I provided is essentially to generate a future cashflow suffering a lower rate of tax from future revenues.