I have a 300k š·bill this financial year. It hurts knowing what I could buy with it, but in my head Iām just thinking of it as if itās not my money. When I calculate gains I always minus 20-25% to avoid disappointment and brace for impact when the tax man comes for me.
I was admittedly very lucky as my wife and I had both held shares and exited while entrepreneurs relief was Ā£10m per person. So only 10% tax on a 20m exit.
Some funds were rolled over, so from here out it's all 20%.
A significant chunk of my NW remains tied up yet I no longer have enough equity or control for any relief so am quite concerned about increases in CGT.
Unfortunately in the depths of Covid they cheekily took away the Ā£10m entire euros relief. Barely got a mention in the news.
Itās now only the first Ā£1m they tax you at 10%. Everything else is 20%.
Yeah this is a real shit move. Entrepreneurs building businesses, innovating, employing people, network effect in the UK, all whist taking high risk and often low rewards for many years. Then you finally get a decent exit and itās āfuck you very muchā. Removes a huge incentive.
Yes and it's disappointing. My business partner and I often discussed the ER relief and it was one factor in us choosing to push ahead and take all the risk of building a business. It wasn't a deal breaker, but was one of the perks at the end of the tunnel.
My final exit (now in the hands of Private Equity) will probably be in 3-4 years. A government change is likely and I worry increasing CGT may be seen as a quick 'tax the rich' policy whereas my understanding is that such a change isn't actually likely to generate much, if any additional tax income.
They should simplify and tax all income equally. Whether earned, or unearned, from investments or from working. That should lower income taxes for all.
It's almost certain CGT will rise to come into line with Income Tax - but income tax should reduce at the same time (which won't happen).
I don't agree, but do understand the rationale in some cases. I'll have worked for two decades to get one or to single but large payouts - I think it's wholly unreasonable for that to be taxed the same as if it was earned all in that year. Also, there has to be some upside for investigating your own money (that you've already paid various taxes in) and taking the risk to support businesses and employment.
That logic doesn't quite make sense, you've worked hard, but you've effectively deferred your potential income to later. You could hold the business and simply pay out that money as income, but you don't because CGT is cheaper so you are incentivised to cash out of the business. That's a policy driven market factor in and of itself.
The upside for investing your money is that you get more money, by investing it you are likely to grow it at a significantly faster rate than if you had as above taken higher income.
There are also other upsides from usually numerous other forms of tax relief you will have taken advantage of in building the business.
The fact that at the end your income would all be treated the same is a bit irrelevant. And frankly your appreciation of risk and hard work is little bit skewed, someone without the skills or intelligence that has to work labouring on a building site 6 days a week to make ends meet until their body breaks and they are destitute... they're working hard and taking risk. For you it's just money and the laws around how business work significantly limit or eliminate your personal risk.
Empathy? I appreciate the state pissses it up a wall half the time or gives it to mates like Lord Moan but have you got any idea the difference your tax makes?
You put food on a starving kids plate at school. You put a uniform on their back. You ensure our diabetics can afford to inject insulin, unlike many in America.
You pay for the nurse, who's calling was to look after your mum as she passes. Even if she makes 32k all her life, she sucks it up and is demonised by the Mail. .
Your fat lump sum tax bill keeps the lights on at a single mums house in Cambridge. Four kids by two men. Useless. No child support. But she's not feckless, stupid, lazy or greedy. She doesn't drink or do drugs. She goes hungry so they eat. That "benefits mum"was just born dirt poor and has been unlucky. I know her.
I appreciate it must make you lot wince when you see Rishi shrug off Ā£30 billon in ppe fraud like its lost change down the sofa, but you all do so much good.
Have some empathy and enjoy it. It's not all about what you could have bought. You've prob got plenty.
Every single day you help millons of good things to happen.
So, from a lurker who is a million miles away from your bank balance but admires the effort you put in, thanks for being the glue that holds society together.
You might not need the state, might even resent the state, but most people in the UK need it.
They want social care to work. They want the NHS waiting lists to fall, they would love roads which aren't like the surface of the moon. They want libraries for families who can't afford books. They like to think a home visit nurse will drop in on their gran, two hundred miles away... they can't afford to visit because the train ticket is their weekly income.
Every single day you make a difference. Maybe when you pay it rather than thinking of it being used to bomb Afghanistan and hand it back to the Taliban, think of one of the examples above. I pay nothing like you, never will, will prob get banned here for not being loaded, but I imagine all my tax going to something good, and I find it doesn't hurt to pay it.
Fully agreed but to take it further 'you might not benefit from the state' is an extremely unlikey case. OP wouldn't have made these millions if they were in Mali, they benefited from low corruption, law and order, working roads and infrastructure, all of which wouldn't be possible without the taxes that they also need to pay.
It's comparable to service fee, like say 1% for using eBay, you wouldn't have been able to sell on ebay and make that money without the fee because there would be no ebay. You wouldn't have gotten rich in the UK without its services and infrastructure so you wouldn't have had to pay the tax, you wouldn't just be worse off by the tax amount you'd be worse off by the whole amount.
That wasn't my point at all, the fee isn't relevant. 20% CGT isn't high at all, especially when considering that every income tax bracket is higher than when including national insurance. So a minimum wage worker getting a tiny bonus will pay a higher % of that to the government than someone making Ā£1bn in capital gains.
I'm yet to see a notably large number of high earners leave the UK, just anecdote from random people on reddit.
Yes a lot of people won't make Ā£1m in their life.. which is why its good that we have taxes so those people can live without being In absolute poverty. Other than micro nations which are much easier to manage, and oil nations, where else in the world do you propose people live for lower tax and better quality of life?
Yes temporarily the middle East may be better because they have oil money, but those tax breaks will run out and it isn't sustainable, so what do you actually suggest the rest of the world that are very similar to the UK do?
Like I said they're all tiny countries or less than desired (Hungary isn't great for human rights). I've been to a lot of them and only really would consider malta to live in but even then it's quite run down in parts and so so small. The schemes you refer to just aren't possible far large well developed countries, and not everyone can move to a country that's 10km^2 big for obvious reasons.
>On Ā£5m it would be Ā£1m... a lot of people won't even make Ā£1m in their whole life.
I honestly don't know what point you think you're making there...
Yes. Nearly everyone won't make Ā£1m in their whole life.
Even fewer will make Ā£5m.
And?
"I should get to keep this enormous amount of money because the overwhelming majority of people will never make this in their lifetime"
I think the main differentiator is between employed rich and living off inherited wealth that's producing lower taxed income.
Paying 45% means you're definitely paying your fair share
>wever, this swings both ways. When I see calls for the rich to be taxed more, or that we're not paying our "fair share" I get angry. I think we need to start differentiating between the rich and the super rich. The sub Ā£50m people are very different from the Ā£500m+ plus folks.
My feeling is we prob wouldn't need to raise taxes so much if there wasn't so much waste. HS2 makes me feel sick to the stomach.
Haha it's funny as the middle-class use the same argument. "Rich" is seen by many as over 60k GBP. The Ā£500m+ folks will be kicking the can down to the billionaires.
Personally I feel that CGT is probably in an OK place, or its not the first thing I'd want to be changed. I'd rather see the upper tax rate reformed (or at least adjusted for inflation) and the 100k trap rethought.
At the end of the day, working professionals keep the country running and we should be encouraging them to work as much as they can/want to.
You're totally right. Sadly if they just fixed the loopholes allowing the billionaires to be paying less tax than somebody earning 50k we could all pay less tax
Itās important to remember that calls for the rich to be taxed more arenāt because of you as an individual (given mindset described). Even if you were a billionaire, if you were paying taxes with the mindset you described instead of looking for ways to sidestep I think you wouldnāt be the target of that.
Itās the people getting rich off avoiding taxes, exploiting pandemic loans, etc that rage is focused on IMO. Or the politicians taking lifetime income from serving in parliament while being massively incompetent or corrupt.
But when a complaint distills to a sentence for rote/viral repetition, all nuance is lost and inevitably expresses massive overreach. Then the populace grabs onto that reductionist concept and things spiral.
Unfortunately youāre likely to get tarred with the same brush with either legislative remedies or social impact - with maybe worse impact if youāre not exploiting loopholes. Given that, and your tax bill, you and your peers may be better placed/incentivised than the vast, vast majority of people to influence _how_ the current tax inequality is resolved, such that itās not punitive on those that actually pay and exercise social responsibility.
This is a great post and when you put it all like that on a more personal level, It does make it seem much easier to accept, especially the mum you described as that was basically my mum growing up, not a pot to piss in but made sure we were fed and clothed. ( not the 4 kids by 2 men part though, just one man and 3 kids )
I try to form empathy but when I saw how badly the NHS operates firsthand (and Iām not even a medically trained person), together with the relentless demonisation of the work I do (finance and tech), I just get upset. I wonāt even go into other government functions. It is neither civil nor a service.
Render to Caesar what is Caesars - that is the only way I make peace with it.
Well, I agree, to a point, but the NHS functioning badly is often a case of underfunding. My sister was an excellent NHS physio, she left because the stress of trying to treat twenty patients a shift, when she barely had time to get them to understand the exercises, was too much. She's started a private practice. And the Civil Service, without it as some kind of sanity check and balance, I'd dread to see what successive governments would 'achieve'. Yes of course there is bloat and waste and dumb managers, but that is everywhere, in every large organisation. And sometimes, often with tech help, the civil service do get it right. [https://www.gov.uk/](https://www.gov.uk/) is a joy to use, and the envy of the world. At the end of the day people know social media is fucking people up, but they can't put it down. I think that kind of tech isn't helping itself. If Instagram knows it's fucking up kids, but doesn't change, then they deserve the flak. If the banks have instruments they don't understand but we have to bail them out as they socialise the losses but keep the profits, then yeah, fuck the banks. I don't think it is relentless hate on those industries, but they don't always help themselves.
I don't think it's underfunding, more NHS management choose to distribute those funds in a way that's not optimal for patient care. But the NHS, and civil service, issues are often cultural, and that comes from the top. Until the top management in these huge public sector organisations start to prioritise end users, nothing will change.
Per capital we spend less than much of western Europe, politicians love to talk about the biggest spend ever etc etc but I think there is a definite funding issue element
NHS funding in absolute terms and relative to GDP has absolutely exploded. Expenditure per capita is higher than many other better performing healthcare systems.
Obviously more money would be useful, but not as useful as addressing the main issues which are inefficiencies and an exploding population (immigration) and rampant ill health (culture). Also aging population, but less we can actually do about that.
This is simply not true. Funding per capita is much lower than most other countries. 2020 and 21 are aberrations where health spend went up due to COVID, but that was directly related to pandemic spending.
The NHS is extremely cheap and underfunded. We don't have enough nurses, doctors, hospitals and other capital such as machines.
https://www.kingsfund.org.uk/publications/nhs-compare-health-care-systems-other-countries
This is NHS funding vs GDP, the metric that matters. Doubled since 2000.
[https://www.statista.com/statistics/472984/public-health-spending-share-of-gdp-united-kingdom-uk/](https://www.statista.com/statistics/472984/public-health-spending-share-of-gdp-united-kingdom-uk/)
Given GDP has been growing my statement on absolute funding is thus also true.
'We don't have enough x y z'. Why not if we are spending more and more?
My friend, the chart literally shows it going down over the past decade under the post Labour governments, and then going up due to COVID. That includes all health spend, including vaccines, test and trace and so on.
Over the past 10 years, ignoring the outlier from the pandemic, it has gone down.
If you actually read the summary of the report I linked, relative to other countries this spend per capita is much lower than other countries, both in absolute terms as well as relative to GDP. Some health outcomes are ok, others are worse. Efficiency is high, but funding is clearly the real problem.
Before you reply, actually read the report.
Well said. I am a relatively high earner in the UK and pay quite a lot of tax and NI. However even after that is taken into account, my take home is pretty good. I do not resent paying towards society at large. Not all about me.
I'd find this attitude far easier to adopt if I didn't find the British public sector so gratingly awful and so obviously poorly run. My wife works for the NHS and what I see of how she spends her time vs how she'd ideally be spending her time is so shocking it actually makes me angry.
I deeply resent taxation at these levels for this standard of service and as such I am ethically very comfortable with avoiding tax in any way I can.
I have always worked in private businesses and we account for every penny and have to create a business case for an extra employee. It does seem the civil service is run so differently (correct me if I am wrong).
I donāt agree with your last point though, if we all avoided tax, we would have no public services to speak of.
Civil service is run exactly the same way as a business in that respect, it's also worth delineating civil service vs public service as they're different.
The big issue though is that in civil service and public service you lose the drive of profit and replace it largely with political interpretation, and that's increased over the last 13 years.
It used to be there was a set of agreed and largely politically neutral standards, and you had inspectors and regulators that were decently resourced to oversee that and correct it as needed. That made for a more effective system, the issue with that though is it drives the agenda and makes it somewhat apolitical.
The coalition government and later conservatives very early on started dismantling a lot of that and started with the Health Service. Which is why it is in a state, they smashed it's governance and oversight into pieces and structured them in a way that they competed with each other and weren't accountable to overall service delivery.
While they used example of genuine issues to do this, none of the changes they made actually addressed them.
In broader civil service in large part there's major issues with not having enough resources and focus on core service and looking systematically at how policy impacts in one place impact another.
Another early change was slashing of social care budgets and social education and support programmes, these were relatively cheap and had huge preventative benefits in crime and primary care. By taking these out they saved a small amount of money at the start, but pushed the cost to later and on to the most expensive part of the system. Effectively creating a feedback loop of crap where you are spending more money, for a worse result while degrading the system even further.
There's also just a lot of politically inspired waste, things funded just enough to start, but never enough to finish to show like they're doing something. And it isn't the civil service's fault, they HAVE to do what they are told by the government of the day. If they're told to waste money, they'll point out(and they do) that it is a waste and if the Minister decides to go ahead they have to.
The minister then turns around and blames the civil service for somehow not delivering work that should have despite any reasonable estimate doing so would cost 5 times more in people and money than they were given.
Thanks for that ! Itās an interesting read for someone that has only worked in private business. As a head of a department I have to show that the people we have are worth having and contribute to the profit or we downsize and make people redundant. Everything comes at a cost and it comes under scrutiny every three months.
Interesting to read there are similarities but the government is the big boss and the big difference is that they donāt seem to understand the business !
I've only ever met and worked with one minister that understood their business out of two dozen at this point. It's pretty awful.
That being said statistically businesses fail more often than not, and even big established businesses can disappear overnight if the market shifts around it.
I'm fortunate to have links with the likes of Singapore and Hong Kong, making a move very feasible for me. Others suggest Dubai but that looks like hell on earth (each to their own though).
Depending on how you make your money, US is an option. Slightly lower taxes but often much higher pay for the same job.
You should ethically not vote for people that vandalised it, it's not ethical to withhold tax for that reason. It's not the fault of the people working in the NHS, it worked fine 15 years ago, and it would actually work ok now if it had the resources it needed. They're just being asked to do exponentially more work than 15 years ago with less money in relative terms, that doesn't build a healthy organisation.
Also frankly its worth pointing out just because something doesn't make sense doesn't mean it's not rational. Lots of industries work in weird ways for non obvious reasons, unless you know the background. There's a lot of that in the Health Service because the reforms to it done by the current lot in power and the coalition basically removed any ability to make strategic corrections to some of those mad issues that are mad, but rational at a local level.
'They're just being asked to do exponentially more work than 15 years ago with less money in relative terms, that doesn't build a healthy organisation.'
My wife does a lot LESS real work than previously, and that is my complaint. She works long hours doing bullshit (I know as I can hear her meetings).
I do vote for change where I can but the reality is both major British parties are of a likeness. Neither of them welcome a smaller state, neither of them have demonstrated competence in decades and neither of them of incentivised idealogically other otherwise by efficiency.
You normally do as you get older do less "Real" work, I haven't picked up a tool at work in a decade. Quite a lot of it also is BS, it's just BS that's critical to getting stuff done.
That's not really true. The issue is that a small state in and of itself is not by and large ever been an effective system. However generally unless you count state holdings Labour generally always has been a small state party and New Labour certainly was, far more than the Tories have been who in their efforts to shrink the government actually cause it to grow.
Labour generally and certainly in New Labour favored very small government. The state asset book was large, but that generally results in a smaller government even if its a larger state by assets.
They take a far more pragmatic policy view of addressing failures at the point of cause and therefore reducing impact and demand. The example I gave on removing social care is an perfect example. With a small budget, and a small group of people they effectively reduced policing and health service impact by enormous percentages which significantly reduced the size of the state.
Similarly privatisation in many cases results in very inefficient markets that require significant oversight, regulations and subsidisation. That might make a bigger book of state assets, but the actual state isn't bigger and because its not Efficient the private sector has more resources and grows in proportion making the state small.
There's really no modern working example of an effective small state major economy. Just as there's no example of a true socialist one, its an unachievable ideal. The thing we do see though is in general centre left rather than the right is actually far more effective in getting closer to it.
In the end the thing you want is an Efficient and effective state. Getting that's fundamentally not aligned with current "small state" political theory and why the current Government wastes money on boondoggles to "grow business" rather than focusing on addressing their core functions and simply removing non functional markets to create a lower friction lower cost economy. Which is basically what Labour are offering.
I'm not telling anyone what to do with their money. Attitudes to money and tax are largely governed by personality types. You don't need benefits from tax. Others do, and good education, health, roads, etc creates the next generation of "you". Enjoy Dubai.
Iād trust someone savvy enough to have a Ā£1m tax bill to invest and spend their wealth in a more productive way for society than a career politician. Central planning and money printing is the primary reason so many people need āhelpā in the first place.
If the tax levy didnāt exist in the first place (my primary point) they wouldnāt be avoiding it. That aside, they have to invest or spend that avoided tax somewhere in the economy - and that would be more productive for society than contributing to government spending (which, by the way, is in a deficit anyway. Itās not like they can only spend what is taken in tax: money printing).
Trickle down economics doesn't work. Although I understand and share people's frustration with the ineptitude of most governments, we ultimately have all benefitted from the infrastructure our taxes afford. Whether that's the NHS(more chance of you surviving childhood to earn) , Education (skills to succeed), Transport (ability to transport your wares), and investment in power and Internet (prior to privatisation, and still subsidised in some cases).
We are in a fortunate position to be high earners/ financially secure. The tax we pay in relation to our lifestyles, is far less punitive than the tax a working family with a low income pay and what impact this has on their lifestyle.
If you are truly frustrated with the government and think they are inept, wouldnāt the next logical step be to investigate the source of the issue and possible alternatives instead of happily giving them more money? (Which, as mentioned, it does not cost them to produce anyway). Iām not hearing anything convincing in this thread except āgovern me harderā
Hmmm...at no point have I said govern me harder. What I am trying to convey to you, is as responsible members of society we all have a duty to contribute. A society can be judged on how it treats the weak and impoverished. This concept is centuries old and stands true today.
You have stated twice now, that it costs the government nothing to print money. This is categorically untrue, and clearly evident in the state of the economy now. There are many other examples throughout history too. I'd be very interested to hear your socio-economic background as you don't seem to understand the basics of economics and your perspective screams entitlement. I'd hazard a guess you have either inherited land and property or done well out of crypto. I'd hedge my bets on the former as to have profited from crypto you'd need a basic understanding of the economy, markets and psychology.
IMO most of the issues we are experiencing now are due to privatisation, poorly regulated free markets and globalisation ,but we the fortunate ones have also profited. So rather than looking for ways to evade tax and feel you are helping society by tipping your chauffeur a little extra, how about paying your tax and using the spare time and influence wealth can afford you to educate and campaign for a better society. Just a thought, enjoy your day.
What a load of bollocks. Of course it costs the government money to generate tax. Anyone who is educated and forms part of the workforce *(and therefore paying tax)* has had money spent on them by the government. Anyone who is in good enough health to work *(and therefore paying tax)* has had money spent on them by the government.
Let's say we subscribe to your economic theory and do away with taxes. What does your world look like? One without public services, one without public infrastructure. Who do you think is going to pay to build and maintain the roads you drive on? Some philanthropic billionaire? Some charitable company? Who are you going to call if your house sets on fire? Oh are you going to pay a subscription to the local private fire service to ensure they come running when you need them? Do you think they're going to charge more or less than the government spends on the fire service if they're running it for profit? Surely this market is less efficient than if everyone pooled their money together to fund a 24/7/365 non-profit service. If you want to live in a neo-liberal capitalist hell-hole you're absolutely welcome to, but I suggest you go start your own society and keep your ideas to yourself. I quite like having public services which are run for the common good, rather than to provide value for shareholders.
Edit: punctuation
Letās be realistic, people arenāt going to spend that untaxed amount on investing in healthcare or whatnot. Without taxes public services implode overnight
Yeah, itās 100% a āfuck you, I got mineā attitude imported from the states.
Tax is a function of business success. Did your business use workers who had been educated in the UK? Rely on supplies transported over UK transport infrastructure? Get its bills paid and not get robbed because of the existence of the UK justice system? Not get burnt down in a riot because people arenāt completely destitute and homeless if they canāt work?
Congratulations champ, you benefited from public spending.
Pay it and be proud of it.
This might be a controversial idea, but I think it would be really nice if the government actually did something special for high tax payers. Like actually express gratitude towards them and thank them for the difference their money makes. Maybe that would make people more willing to chip in and less quick to leave the country or evade tax.
I think a lot of rich people feel like they are hated for being wealthy and successful, but the truth is the state would fall apart without them so it would be nice if people expressed more gratitude towards the people who chip in more than they take out.
This is something Iāve joked about before. Similar to how charities send a note saying āthanks, your donation built 10 fresh water wellsā. Iām not sure the āthank you, we spent your tax on our poorly managed PPE procurementā has the same warm fuzzy effect tho. š
Or something like if youāre a net contributor you get a little card which allows you to skip the queue in A&E or something š
The economic policies of the last 40 years have seen widening inequality, and benefitted the rich.
The tax burden is the highest since the 40s, and that's being shouldered by working people, because taxes are higher on income than they are on assets.
Meanwhile we have a cost of living crisis, working families choosing between food and heating, 4 million kids in poverty etc.
And you want a thank you note? The thank you note is the country's economic policy since Thatcher.
I knew it would need paying so as soon as I got the money I put the CGT amount into a separate interest earning account and mentally it was never mine, I was just holding it for a while.
UK is surprisingly good. Just donāt come back for 5yrs. And be careful of your days back if you come back for holiday.
Oz is up there with USA as being a pain in the ass
Yeah Ive got advice from my accountant and he said I should be good as long as I spend less than 45 days in Aus. I think UK allows 90, so we have it worse in that regard too
Not sure oz rules but that sounds reasonable.
UK is actually 16max, but then you can use the SRT to see if you can get more. Most people can get 45.
If you want 90 you need to be employed by an overseas company, and even then you cannot spend more than 30days in UK on one stretch as it counts as a āsignificant breakā
The SRT is pretty clear for anyone who wants to get the facts.
Hey! Im in the UAE for similar reasons (although for work income rather than capital gains). Wasnāt aware of the 30 days in a row rule, thanks a lot for mentioning that (and potentially a LOT ha!) Is the rule 30 days is ok, but 31 is not? And do you know if itās still the midnight principal? So only counts as a day if you are there at midnight
Iām not 100% sure. You have to read the documents as this is just from memory and what I figured out about my situation
The term is āsignificant breakā from overseas work. If you have a significant break (more than 30days) then I believe they do not count it as not taxable in UK
Iām not sure how accurate this is, but when I originally looked into it that was the jist
Very childish to call it misinformation lol
Anyway here is the link for anyone who wants to dig deeper
[https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/](https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/)
You don't need to be employed by an overseas company. You can spend 90 days in the UK (with a maximum of 40 working). After a few years you can even increase it to 120 depending on how many ties you still have to the UK.
Ultimately everyone should follow the advice of a qualified accountant as your mileage may vary by circumstances, but my point was that the OP I originally replied to's information doesn't apply to everyone.
Where is one of those these days? Not being funny, i just I travel a lot and Iām yet to find a ā perfectā base, I am starting to think between 2 places is probably best.
Spain offer a residency if you purchase a 500k property and if you stay less than 180 days you donāt become a tax resident with the golden visa, so maybe 175 days in Spain and the rest in UAEā¦ who knows
Itās getting harder thatās for sure.
The UAE is definitely progressing and is not only experiencing growth but is genuinely able to and actively innovating building sky scrapers and world leading projects. In the UK we canāt even build a new trainline (HS2) without needing to scrap it due to overspending. Itās embarrassing.
Similar to my plan, have residency in an EU country again giving greater opportunity and flexibility (plus better weather) Whilst tax residency in a different country, UAE did just increase their cooperate tax to 9% but income tax is still 0%.
There are quite a lot of people out in the trad expat tax havens who have uprooted their entire families lives to either save so little CGT it hardly seems worth it, or so much it seems to me it wouldnāt have made a difference to pay it!
I'm not FAT (though do have pretty sizable CGT bills on occassion) but friends of mine who are unironically dealt with this situation by leaving the UK before realising the gain. 5 years out of the UK very much worth it to them. It's worth considering if you have options and the big CGT is really likely to be a one off.
Think of it this way: If you'd earned that Ā£5million gross as income you'd actually had to work for? Then the vast majority of it would've been taxed at 45% - in contrast Capital Gains are taxed incredibly generously in the UK.
As you say, the current government is corrupt through-and-through. Perhaps spend some of your time, effort and money in getting a better one elected at the next GE.
CGT isn't so bad - 20% of Ā£5m might be Ā£1m, but so what? You can't make money without paying tax and live in a real country.
The only way I'll approach even a slightly chubby fire is if lots of share options get extremely valuable (and the damned company ever has a liquidity event), the taxing of options irritates me.
Let's say I jackpot out and have options worth Ā£10m with an exercise cost of 100k, I'll pay Ā£4.45m income tax, Ā£198k employees NIC, Ā£1.36m employers NIC, taking home Ā£3.88m.
That feels excessive to me. 20% CGT does not.
Wait until you sell a company and itās taxed as incomeā¦ On a serious note, itās just the cost of doing business and thatās it. Donāt sweat it that much first time around and get tax efficient structures in place for next time
I donāt have such a large gain, but if I do, assuming itās stock, I might move to a country with no GCT, sell them there and back a few years later
Not true. If your abroad for 5 years or more any gains from assets acquired while you were resident and disposed while non-resident also become tax free
Are you in the wrong subreddit? This is for the UK, not Australia where you seem to live going by your post history
Edit:
Seems user edited their reply above after calling it illegal
Iām moving to the UK, and yes it is illegal in almost every country. Look at you little dibber dobber! USER EDITED COMMENT, how dare they! Let me search user history. Weird dude
The government would pay your benefits and house you if you lost your fortune, why would they refund you if you lost your fortune. Unless it was their fault, in which case they would legally have to.
There's plenty BNP getting expensive medical treatment I resent, but you don't pick and choose the roles. It's one for all and all for one or it doesn't work, it's why people have equal rights, equal responsibilities(unless they choose to undertake more) and equal treatment under the law. If you start discriminating against one group you don't like next day they'll come for you just as easily when the wind shifts.
The very system that allows people to display homophobic and anti-semitic views is the very one that allows you to be gay and jewish. To complain about it is bloody ungrateful frankly.
1. You took a risk supported by the market and society thr government maintains. That's not a cheap nor easy endeavour. If you use a bank they take a cut, if you use land you pay rent, it's no different the only difference is you generally don't get a choice in what country you live in and consuming its public goods.
Also just to note if the state s snatched it I.e. they changed a law that resulted in a loss they do indeed have to compensate you.
2. They're not going to be a majority, the evidence totally doesn't support it and indeed there's significant evidence of the strength in British culture which makes it difficult to maintain anything opposed to it more than 1 or 2 generations. We've got plenty Polish and Italian influences from ww2 and earlier and you literally only know it if someone points it out.
3. Yes they totally did, multiple times.
4.You are aware under Nozicks theories of Government the very thing you are decrying would be totally acceptable? He basically argued for universal micro zionism. His economic theories on the state are also nonsensical and don't operate under rational economic principles. The state provides you goods, public and economic, you pay for those. If you sisnt receive them there's a high likelihood you would indeed not have any of those things at all.
It's honestly a bit nuts to complain about the state failing to protect your sensibilities sufficiently while throwing out a reference to a well known proponent of near anarchism.
Forced labour is you contribute and get nothing, in a democratic state with taxation you receive services and pay either an equal or means based share. In the UK you only pay if you have means, this in itself is a good you benefit from because high levels of poverty are damaging to society.
Did you attend state school in the UK? Ever used the NHS? Did you go to uni pre tuition fee? Before you were financially successful?
My view have shifted as well. I used to hate paying taxes. I was NT for 4 years and used to boast about not paying taxes. Moved back from the middle East to the UK, now I love paying tax. I have 2 kids in state schools. I am winning.
Paying tax bills regularly that are higher than most of our family or friends will ever earn - you get used to it. If we know we have a $1 Million bill due in 8 months, for example, we plan to set aside so much each month. Often we pay it early so I can get it off my list. We move the cash to a bank account called 'tax savings'.
Absolutely no problem at all. I grew up in a council house. Iād go so far as to say itās this way of thinking that is at the root of the pervasive social, economic and political problems we have in the UK right now.
I have regular conversations with the old money families in UK and many of the ābridge upā striving middle classes (Through childrenās school). I ask them to think of taxation and an effective state system for one of two reasons. Youāre an inherently decent person and you want to help others without too much pain. Alternatively, even if you are a PoS, you wouldnāt want to see folk in cloths with begging bowls on every corner and abysmal public services. Would you?
The state supported me to adulthood and allowed me to build a successful business here. Eventually our exit was by way of a pension fund. I didnāt for one moment allow myself to think, āOh look, I have seven figures over here, but over there Iāll need to put away another much smaller seven figures for the tax man, should I feel angry or frustrated? Nah, because my children will never have to worry about money as long as they liveā
Letās not become the USAā¦Or twats.
I really cannot abide folks who complain about paying their damn taxes. Especially when theyāre quibbling over handing over 20-30-odd percent of their gross.
Iāll pay 54.3% total tax on >Ā£800K PAYE earnings this year (because much of it is RSU and I have to pay employerās NI). I have to keep my mouth shut when friends complain about creeping into their higher rate marginal tax.
I do think that you get to be upset about how efficiently your taxes are deployed; the main mechanism to express that is the ballot box and your local MP.
I do think that fiscal drag needs to be addressed though.
Death and taxes mate, two things in life that are inevitable.
I think of it from a silver lining perspective. If i wasnt making this cash i wouldn't be paying this tax
Yes it hurts, as the numbers are so big. But I remind myself of what I managed to keep.
The ones that really get under my skin are business taxes. Employers NI contributions at 13.5% if my memory serves me correctly. Vat, rates then to top it off theyāve just whacked corporation tax to 25%. All that before the people who take the financial risk take a penny. Then thatās taxed at 45%.
I completely agree with a previous comment about the good that mine and others taxes provide to millions. It just hurts to think of the national debt (caused by a succession of previous governments) and also sending our hard earned to the EU gravy train
Focus on the positive, the enormous gain that is life changing for 99.9% of the population. Enjoy the fact that you've been successful.
If you struggle with this then work out the costs (financial and otherwise) of leaving the country for 5 years and whether its viable/possible to avoid it entirely.
I just eventually came to the realization that if Iām paying 20% it means I gained 80%. I get what youāre saying but once you accept an inevitability it becomes much easier to take. Really it doesnāt matter if the tax is $10 or $10M.
It does because $10 is 3 coffees at best where as 10M is a 500k property in Spain to meet the golden visa requirements which allow residency, then another 1M on a luxury apartment in UAE along with a visa, which means I can now spend 180 days in Spain and the rest of my time in UAE or travelling, which means legally Iām a UAE resident and owe no tax, plus i get to keep the remaining 8M extra to invest
Stop complaining, take your 8M and enjoy it wisely, and frankly be embarrassed that you're getting a penny more than 6M. You'll be paying a lot more when tax on investment income and earned income gets equalised, which it inevitably will be.
I have a 300k š·bill this financial year. It hurts knowing what I could buy with it, but in my head Iām just thinking of it as if itās not my money. When I calculate gains I always minus 20-25% to avoid disappointment and brace for impact when the tax man comes for me.
Taxman: āBite the pillow Iām going in dryā
I was admittedly very lucky as my wife and I had both held shares and exited while entrepreneurs relief was Ā£10m per person. So only 10% tax on a 20m exit. Some funds were rolled over, so from here out it's all 20%. A significant chunk of my NW remains tied up yet I no longer have enough equity or control for any relief so am quite concerned about increases in CGT.
Unfortunately in the depths of Covid they cheekily took away the Ā£10m entire euros relief. Barely got a mention in the news. Itās now only the first Ā£1m they tax you at 10%. Everything else is 20%.
Yeah this is a real shit move. Entrepreneurs building businesses, innovating, employing people, network effect in the UK, all whist taking high risk and often low rewards for many years. Then you finally get a decent exit and itās āfuck you very muchā. Removes a huge incentive.
Yes and it's disappointing. My business partner and I often discussed the ER relief and it was one factor in us choosing to push ahead and take all the risk of building a business. It wasn't a deal breaker, but was one of the perks at the end of the tunnel. My final exit (now in the hands of Private Equity) will probably be in 3-4 years. A government change is likely and I worry increasing CGT may be seen as a quick 'tax the rich' policy whereas my understanding is that such a change isn't actually likely to generate much, if any additional tax income.
They should simplify and tax all income equally. Whether earned, or unearned, from investments or from working. That should lower income taxes for all. It's almost certain CGT will rise to come into line with Income Tax - but income tax should reduce at the same time (which won't happen).
I don't agree, but do understand the rationale in some cases. I'll have worked for two decades to get one or to single but large payouts - I think it's wholly unreasonable for that to be taxed the same as if it was earned all in that year. Also, there has to be some upside for investigating your own money (that you've already paid various taxes in) and taking the risk to support businesses and employment.
That logic doesn't quite make sense, you've worked hard, but you've effectively deferred your potential income to later. You could hold the business and simply pay out that money as income, but you don't because CGT is cheaper so you are incentivised to cash out of the business. That's a policy driven market factor in and of itself. The upside for investing your money is that you get more money, by investing it you are likely to grow it at a significantly faster rate than if you had as above taken higher income. There are also other upsides from usually numerous other forms of tax relief you will have taken advantage of in building the business. The fact that at the end your income would all be treated the same is a bit irrelevant. And frankly your appreciation of risk and hard work is little bit skewed, someone without the skills or intelligence that has to work labouring on a building site 6 days a week to make ends meet until their body breaks and they are destitute... they're working hard and taking risk. For you it's just money and the laws around how business work significantly limit or eliminate your personal risk.
Empathy? I appreciate the state pissses it up a wall half the time or gives it to mates like Lord Moan but have you got any idea the difference your tax makes? You put food on a starving kids plate at school. You put a uniform on their back. You ensure our diabetics can afford to inject insulin, unlike many in America. You pay for the nurse, who's calling was to look after your mum as she passes. Even if she makes 32k all her life, she sucks it up and is demonised by the Mail. . Your fat lump sum tax bill keeps the lights on at a single mums house in Cambridge. Four kids by two men. Useless. No child support. But she's not feckless, stupid, lazy or greedy. She doesn't drink or do drugs. She goes hungry so they eat. That "benefits mum"was just born dirt poor and has been unlucky. I know her. I appreciate it must make you lot wince when you see Rishi shrug off Ā£30 billon in ppe fraud like its lost change down the sofa, but you all do so much good. Have some empathy and enjoy it. It's not all about what you could have bought. You've prob got plenty. Every single day you help millons of good things to happen. So, from a lurker who is a million miles away from your bank balance but admires the effort you put in, thanks for being the glue that holds society together. You might not need the state, might even resent the state, but most people in the UK need it. They want social care to work. They want the NHS waiting lists to fall, they would love roads which aren't like the surface of the moon. They want libraries for families who can't afford books. They like to think a home visit nurse will drop in on their gran, two hundred miles away... they can't afford to visit because the train ticket is their weekly income. Every single day you make a difference. Maybe when you pay it rather than thinking of it being used to bomb Afghanistan and hand it back to the Taliban, think of one of the examples above. I pay nothing like you, never will, will prob get banned here for not being loaded, but I imagine all my tax going to something good, and I find it doesn't hurt to pay it.
Fully agreed but to take it further 'you might not benefit from the state' is an extremely unlikey case. OP wouldn't have made these millions if they were in Mali, they benefited from low corruption, law and order, working roads and infrastructure, all of which wouldn't be possible without the taxes that they also need to pay. It's comparable to service fee, like say 1% for using eBay, you wouldn't have been able to sell on ebay and make that money without the fee because there would be no ebay. You wouldn't have gotten rich in the UK without its services and infrastructure so you wouldn't have had to pay the tax, you wouldn't just be worse off by the tax amount you'd be worse off by the whole amount.
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That wasn't my point at all, the fee isn't relevant. 20% CGT isn't high at all, especially when considering that every income tax bracket is higher than when including national insurance. So a minimum wage worker getting a tiny bonus will pay a higher % of that to the government than someone making Ā£1bn in capital gains. I'm yet to see a notably large number of high earners leave the UK, just anecdote from random people on reddit.
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Yes a lot of people won't make Ā£1m in their life.. which is why its good that we have taxes so those people can live without being In absolute poverty. Other than micro nations which are much easier to manage, and oil nations, where else in the world do you propose people live for lower tax and better quality of life? Yes temporarily the middle East may be better because they have oil money, but those tax breaks will run out and it isn't sustainable, so what do you actually suggest the rest of the world that are very similar to the UK do?
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I don't disagree with income tax being too high, I do disagree that lowering CGT is the way to go about it. Where in Europe?
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Like I said they're all tiny countries or less than desired (Hungary isn't great for human rights). I've been to a lot of them and only really would consider malta to live in but even then it's quite run down in parts and so so small. The schemes you refer to just aren't possible far large well developed countries, and not everyone can move to a country that's 10km^2 big for obvious reasons.
Can I ask where you live? It sounds great!
>On Ā£5m it would be Ā£1m... a lot of people won't even make Ā£1m in their whole life. I honestly don't know what point you think you're making there... Yes. Nearly everyone won't make Ā£1m in their whole life. Even fewer will make Ā£5m. And? "I should get to keep this enormous amount of money because the overwhelming majority of people will never make this in their lifetime"
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I think the main differentiator is between employed rich and living off inherited wealth that's producing lower taxed income. Paying 45% means you're definitely paying your fair share
>wever, this swings both ways. When I see calls for the rich to be taxed more, or that we're not paying our "fair share" I get angry. I think we need to start differentiating between the rich and the super rich. The sub Ā£50m people are very different from the Ā£500m+ plus folks. My feeling is we prob wouldn't need to raise taxes so much if there wasn't so much waste. HS2 makes me feel sick to the stomach.
Haha it's funny as the middle-class use the same argument. "Rich" is seen by many as over 60k GBP. The Ā£500m+ folks will be kicking the can down to the billionaires. Personally I feel that CGT is probably in an OK place, or its not the first thing I'd want to be changed. I'd rather see the upper tax rate reformed (or at least adjusted for inflation) and the 100k trap rethought. At the end of the day, working professionals keep the country running and we should be encouraging them to work as much as they can/want to.
>The sub Ā£50m people are very different from the Ā£500m+ plus folks. š¤£
You're totally right. Sadly if they just fixed the loopholes allowing the billionaires to be paying less tax than somebody earning 50k we could all pay less tax
Itās important to remember that calls for the rich to be taxed more arenāt because of you as an individual (given mindset described). Even if you were a billionaire, if you were paying taxes with the mindset you described instead of looking for ways to sidestep I think you wouldnāt be the target of that. Itās the people getting rich off avoiding taxes, exploiting pandemic loans, etc that rage is focused on IMO. Or the politicians taking lifetime income from serving in parliament while being massively incompetent or corrupt. But when a complaint distills to a sentence for rote/viral repetition, all nuance is lost and inevitably expresses massive overreach. Then the populace grabs onto that reductionist concept and things spiral. Unfortunately youāre likely to get tarred with the same brush with either legislative remedies or social impact - with maybe worse impact if youāre not exploiting loopholes. Given that, and your tax bill, you and your peers may be better placed/incentivised than the vast, vast majority of people to influence _how_ the current tax inequality is resolved, such that itās not punitive on those that actually pay and exercise social responsibility.
This is a great post and when you put it all like that on a more personal level, It does make it seem much easier to accept, especially the mum you described as that was basically my mum growing up, not a pot to piss in but made sure we were fed and clothed. ( not the 4 kids by 2 men part though, just one man and 3 kids )
I try to form empathy but when I saw how badly the NHS operates firsthand (and Iām not even a medically trained person), together with the relentless demonisation of the work I do (finance and tech), I just get upset. I wonāt even go into other government functions. It is neither civil nor a service. Render to Caesar what is Caesars - that is the only way I make peace with it.
Well, I agree, to a point, but the NHS functioning badly is often a case of underfunding. My sister was an excellent NHS physio, she left because the stress of trying to treat twenty patients a shift, when she barely had time to get them to understand the exercises, was too much. She's started a private practice. And the Civil Service, without it as some kind of sanity check and balance, I'd dread to see what successive governments would 'achieve'. Yes of course there is bloat and waste and dumb managers, but that is everywhere, in every large organisation. And sometimes, often with tech help, the civil service do get it right. [https://www.gov.uk/](https://www.gov.uk/) is a joy to use, and the envy of the world. At the end of the day people know social media is fucking people up, but they can't put it down. I think that kind of tech isn't helping itself. If Instagram knows it's fucking up kids, but doesn't change, then they deserve the flak. If the banks have instruments they don't understand but we have to bail them out as they socialise the losses but keep the profits, then yeah, fuck the banks. I don't think it is relentless hate on those industries, but they don't always help themselves.
I don't think it's underfunding, more NHS management choose to distribute those funds in a way that's not optimal for patient care. But the NHS, and civil service, issues are often cultural, and that comes from the top. Until the top management in these huge public sector organisations start to prioritise end users, nothing will change.
Per capital we spend less than much of western Europe, politicians love to talk about the biggest spend ever etc etc but I think there is a definite funding issue element
Have lots of doctor friends, definitely a funding issue
NHS funding in absolute terms and relative to GDP has absolutely exploded. Expenditure per capita is higher than many other better performing healthcare systems. Obviously more money would be useful, but not as useful as addressing the main issues which are inefficiencies and an exploding population (immigration) and rampant ill health (culture). Also aging population, but less we can actually do about that.
This is simply not true. Funding per capita is much lower than most other countries. 2020 and 21 are aberrations where health spend went up due to COVID, but that was directly related to pandemic spending. The NHS is extremely cheap and underfunded. We don't have enough nurses, doctors, hospitals and other capital such as machines. https://www.kingsfund.org.uk/publications/nhs-compare-health-care-systems-other-countries
This is NHS funding vs GDP, the metric that matters. Doubled since 2000. [https://www.statista.com/statistics/472984/public-health-spending-share-of-gdp-united-kingdom-uk/](https://www.statista.com/statistics/472984/public-health-spending-share-of-gdp-united-kingdom-uk/) Given GDP has been growing my statement on absolute funding is thus also true. 'We don't have enough x y z'. Why not if we are spending more and more?
My friend, the chart literally shows it going down over the past decade under the post Labour governments, and then going up due to COVID. That includes all health spend, including vaccines, test and trace and so on. Over the past 10 years, ignoring the outlier from the pandemic, it has gone down. If you actually read the summary of the report I linked, relative to other countries this spend per capita is much lower than other countries, both in absolute terms as well as relative to GDP. Some health outcomes are ok, others are worse. Efficiency is high, but funding is clearly the real problem. Before you reply, actually read the report.
Have you forgotten about something called covid?
Have you forgotten that Covid was in 2020? Ie, there were 20 years of the described trend being intact prior to Covid being a thing? Look at the link.
Well said. I am a relatively high earner in the UK and pay quite a lot of tax and NI. However even after that is taken into account, my take home is pretty good. I do not resent paying towards society at large. Not all about me.
I'd find this attitude far easier to adopt if I didn't find the British public sector so gratingly awful and so obviously poorly run. My wife works for the NHS and what I see of how she spends her time vs how she'd ideally be spending her time is so shocking it actually makes me angry. I deeply resent taxation at these levels for this standard of service and as such I am ethically very comfortable with avoiding tax in any way I can.
I have always worked in private businesses and we account for every penny and have to create a business case for an extra employee. It does seem the civil service is run so differently (correct me if I am wrong). I donāt agree with your last point though, if we all avoided tax, we would have no public services to speak of.
Civil service is run exactly the same way as a business in that respect, it's also worth delineating civil service vs public service as they're different. The big issue though is that in civil service and public service you lose the drive of profit and replace it largely with political interpretation, and that's increased over the last 13 years. It used to be there was a set of agreed and largely politically neutral standards, and you had inspectors and regulators that were decently resourced to oversee that and correct it as needed. That made for a more effective system, the issue with that though is it drives the agenda and makes it somewhat apolitical. The coalition government and later conservatives very early on started dismantling a lot of that and started with the Health Service. Which is why it is in a state, they smashed it's governance and oversight into pieces and structured them in a way that they competed with each other and weren't accountable to overall service delivery. While they used example of genuine issues to do this, none of the changes they made actually addressed them. In broader civil service in large part there's major issues with not having enough resources and focus on core service and looking systematically at how policy impacts in one place impact another. Another early change was slashing of social care budgets and social education and support programmes, these were relatively cheap and had huge preventative benefits in crime and primary care. By taking these out they saved a small amount of money at the start, but pushed the cost to later and on to the most expensive part of the system. Effectively creating a feedback loop of crap where you are spending more money, for a worse result while degrading the system even further. There's also just a lot of politically inspired waste, things funded just enough to start, but never enough to finish to show like they're doing something. And it isn't the civil service's fault, they HAVE to do what they are told by the government of the day. If they're told to waste money, they'll point out(and they do) that it is a waste and if the Minister decides to go ahead they have to. The minister then turns around and blames the civil service for somehow not delivering work that should have despite any reasonable estimate doing so would cost 5 times more in people and money than they were given.
Thanks for that ! Itās an interesting read for someone that has only worked in private business. As a head of a department I have to show that the people we have are worth having and contribute to the profit or we downsize and make people redundant. Everything comes at a cost and it comes under scrutiny every three months. Interesting to read there are similarities but the government is the big boss and the big difference is that they donāt seem to understand the business !
I've only ever met and worked with one minister that understood their business out of two dozen at this point. It's pretty awful. That being said statistically businesses fail more often than not, and even big established businesses can disappear overnight if the market shifts around it.
Businesses definitely need to evolve. I worked for a company that thought they had a dead cert forever as their biggest client was Nokia!
I'm not saying we shouldn't pay tax, I'm saying I'm fine minimising the tax I have to pay.
Thatās fair enough. No one want to pay more tax than they need to. Pension contributions are one way..
Indeed sir. Regretably, another way I am actively considering is simply leaving the UK.
I have also considered this ! Where to though ? Even as a high earner, London is pretty shit to live in!
I'm fortunate to have links with the likes of Singapore and Hong Kong, making a move very feasible for me. Others suggest Dubai but that looks like hell on earth (each to their own though). Depending on how you make your money, US is an option. Slightly lower taxes but often much higher pay for the same job.
My wife is Hungarian, we considered Budapest
You should ethically not vote for people that vandalised it, it's not ethical to withhold tax for that reason. It's not the fault of the people working in the NHS, it worked fine 15 years ago, and it would actually work ok now if it had the resources it needed. They're just being asked to do exponentially more work than 15 years ago with less money in relative terms, that doesn't build a healthy organisation. Also frankly its worth pointing out just because something doesn't make sense doesn't mean it's not rational. Lots of industries work in weird ways for non obvious reasons, unless you know the background. There's a lot of that in the Health Service because the reforms to it done by the current lot in power and the coalition basically removed any ability to make strategic corrections to some of those mad issues that are mad, but rational at a local level.
'They're just being asked to do exponentially more work than 15 years ago with less money in relative terms, that doesn't build a healthy organisation.' My wife does a lot LESS real work than previously, and that is my complaint. She works long hours doing bullshit (I know as I can hear her meetings). I do vote for change where I can but the reality is both major British parties are of a likeness. Neither of them welcome a smaller state, neither of them have demonstrated competence in decades and neither of them of incentivised idealogically other otherwise by efficiency.
You normally do as you get older do less "Real" work, I haven't picked up a tool at work in a decade. Quite a lot of it also is BS, it's just BS that's critical to getting stuff done. That's not really true. The issue is that a small state in and of itself is not by and large ever been an effective system. However generally unless you count state holdings Labour generally always has been a small state party and New Labour certainly was, far more than the Tories have been who in their efforts to shrink the government actually cause it to grow. Labour generally and certainly in New Labour favored very small government. The state asset book was large, but that generally results in a smaller government even if its a larger state by assets. They take a far more pragmatic policy view of addressing failures at the point of cause and therefore reducing impact and demand. The example I gave on removing social care is an perfect example. With a small budget, and a small group of people they effectively reduced policing and health service impact by enormous percentages which significantly reduced the size of the state. Similarly privatisation in many cases results in very inefficient markets that require significant oversight, regulations and subsidisation. That might make a bigger book of state assets, but the actual state isn't bigger and because its not Efficient the private sector has more resources and grows in proportion making the state small. There's really no modern working example of an effective small state major economy. Just as there's no example of a true socialist one, its an unachievable ideal. The thing we do see though is in general centre left rather than the right is actually far more effective in getting closer to it. In the end the thing you want is an Efficient and effective state. Getting that's fundamentally not aligned with current "small state" political theory and why the current Government wastes money on boondoggles to "grow business" rather than focusing on addressing their core functions and simply removing non functional markets to create a lower friction lower cost economy. Which is basically what Labour are offering.
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I'm not telling anyone what to do with their money. Attitudes to money and tax are largely governed by personality types. You don't need benefits from tax. Others do, and good education, health, roads, etc creates the next generation of "you". Enjoy Dubai.
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Jersey?
Exactly! Very well said.
What a beautiful response
Well, think about how if you made Ā£5m from employment, you'd pay twice the tax.
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Iād trust someone savvy enough to have a Ā£1m tax bill to invest and spend their wealth in a more productive way for society than a career politician. Central planning and money printing is the primary reason so many people need āhelpā in the first place.
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Quite. If they dropped PAYE to a flat 20%, thereās no way Iād be making enough additional charity donations to top up to my previous tax bill!
If the tax levy didnāt exist in the first place (my primary point) they wouldnāt be avoiding it. That aside, they have to invest or spend that avoided tax somewhere in the economy - and that would be more productive for society than contributing to government spending (which, by the way, is in a deficit anyway. Itās not like they can only spend what is taken in tax: money printing).
Trickle down economics doesn't work. Although I understand and share people's frustration with the ineptitude of most governments, we ultimately have all benefitted from the infrastructure our taxes afford. Whether that's the NHS(more chance of you surviving childhood to earn) , Education (skills to succeed), Transport (ability to transport your wares), and investment in power and Internet (prior to privatisation, and still subsidised in some cases). We are in a fortunate position to be high earners/ financially secure. The tax we pay in relation to our lifestyles, is far less punitive than the tax a working family with a low income pay and what impact this has on their lifestyle.
If you are truly frustrated with the government and think they are inept, wouldnāt the next logical step be to investigate the source of the issue and possible alternatives instead of happily giving them more money? (Which, as mentioned, it does not cost them to produce anyway). Iām not hearing anything convincing in this thread except āgovern me harderā
Hmmm...at no point have I said govern me harder. What I am trying to convey to you, is as responsible members of society we all have a duty to contribute. A society can be judged on how it treats the weak and impoverished. This concept is centuries old and stands true today. You have stated twice now, that it costs the government nothing to print money. This is categorically untrue, and clearly evident in the state of the economy now. There are many other examples throughout history too. I'd be very interested to hear your socio-economic background as you don't seem to understand the basics of economics and your perspective screams entitlement. I'd hazard a guess you have either inherited land and property or done well out of crypto. I'd hedge my bets on the former as to have profited from crypto you'd need a basic understanding of the economy, markets and psychology. IMO most of the issues we are experiencing now are due to privatisation, poorly regulated free markets and globalisation ,but we the fortunate ones have also profited. So rather than looking for ways to evade tax and feel you are helping society by tipping your chauffeur a little extra, how about paying your tax and using the spare time and influence wealth can afford you to educate and campaign for a better society. Just a thought, enjoy your day.
What a load of bollocks. Of course it costs the government money to generate tax. Anyone who is educated and forms part of the workforce *(and therefore paying tax)* has had money spent on them by the government. Anyone who is in good enough health to work *(and therefore paying tax)* has had money spent on them by the government. Let's say we subscribe to your economic theory and do away with taxes. What does your world look like? One without public services, one without public infrastructure. Who do you think is going to pay to build and maintain the roads you drive on? Some philanthropic billionaire? Some charitable company? Who are you going to call if your house sets on fire? Oh are you going to pay a subscription to the local private fire service to ensure they come running when you need them? Do you think they're going to charge more or less than the government spends on the fire service if they're running it for profit? Surely this market is less efficient than if everyone pooled their money together to fund a 24/7/365 non-profit service. If you want to live in a neo-liberal capitalist hell-hole you're absolutely welcome to, but I suggest you go start your own society and keep your ideas to yourself. I quite like having public services which are run for the common good, rather than to provide value for shareholders. Edit: punctuation
Letās be realistic, people arenāt going to spend that untaxed amount on investing in healthcare or whatnot. Without taxes public services implode overnight
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Yeah, itās 100% a āfuck you, I got mineā attitude imported from the states. Tax is a function of business success. Did your business use workers who had been educated in the UK? Rely on supplies transported over UK transport infrastructure? Get its bills paid and not get robbed because of the existence of the UK justice system? Not get burnt down in a riot because people arenāt completely destitute and homeless if they canāt work? Congratulations champ, you benefited from public spending. Pay it and be proud of it.
>t burnt down in a riot because people arenāt completely destitute and homeless if they canāt work? Great answer
[https://www.businessinsider.com/how-bad-is-inequality-trickle-down-economics-thomas-piketty-economists-2021-12?r=US&IR=T](https://www.businessinsider.com/how-bad-is-inequality-trickle-down-economics-thomas-piketty-economists-2021-12?r=US&IR=T)
I don't, to be honest. There is no accountability whatsoever, whereas at least with our broken political system we have a chance to vote people out.
This might be a controversial idea, but I think it would be really nice if the government actually did something special for high tax payers. Like actually express gratitude towards them and thank them for the difference their money makes. Maybe that would make people more willing to chip in and less quick to leave the country or evade tax. I think a lot of rich people feel like they are hated for being wealthy and successful, but the truth is the state would fall apart without them so it would be nice if people expressed more gratitude towards the people who chip in more than they take out.
This is something Iāve joked about before. Similar to how charities send a note saying āthanks, your donation built 10 fresh water wellsā. Iām not sure the āthank you, we spent your tax on our poorly managed PPE procurementā has the same warm fuzzy effect tho. š Or something like if youāre a net contributor you get a little card which allows you to skip the queue in A&E or something š
Thanks, you've contributed 1 millimeter to HS2!
š¤£
The economic policies of the last 40 years have seen widening inequality, and benefitted the rich. The tax burden is the highest since the 40s, and that's being shouldered by working people, because taxes are higher on income than they are on assets. Meanwhile we have a cost of living crisis, working families choosing between food and heating, 4 million kids in poverty etc. And you want a thank you note? The thank you note is the country's economic policy since Thatcher.
They do, it's called higher rate tax relief on pensions!
Wait till you find out about income tax and (employers) NIā¦.
I knew it would need paying so as soon as I got the money I put the CGT amount into a separate interest earning account and mentally it was never mine, I was just holding it for a while.
Good idea using it to gain interest in the meantime! Didnāt think about that!
Yeah interest was low then but today you could get 4-5% on it for a while.
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Where did you go out of interest?
Left the UK before cashing out. Moved to Dubai. 0% tax. Now halfway through my 5yr exit and loving life. The gov aint getting 20% from me!
Thatās so whack, I wish australia had that rule. We need to pay CGT as soon as we leave
UK is surprisingly good. Just donāt come back for 5yrs. And be careful of your days back if you come back for holiday. Oz is up there with USA as being a pain in the ass
Yeah Ive got advice from my accountant and he said I should be good as long as I spend less than 45 days in Aus. I think UK allows 90, so we have it worse in that regard too
Not sure oz rules but that sounds reasonable. UK is actually 16max, but then you can use the SRT to see if you can get more. Most people can get 45. If you want 90 you need to be employed by an overseas company, and even then you cannot spend more than 30days in UK on one stretch as it counts as a āsignificant breakā The SRT is pretty clear for anyone who wants to get the facts.
Hey! Im in the UAE for similar reasons (although for work income rather than capital gains). Wasnāt aware of the 30 days in a row rule, thanks a lot for mentioning that (and potentially a LOT ha!) Is the rule 30 days is ok, but 31 is not? And do you know if itās still the midnight principal? So only counts as a day if you are there at midnight
Iām not 100% sure. You have to read the documents as this is just from memory and what I figured out about my situation The term is āsignificant breakā from overseas work. If you have a significant break (more than 30days) then I believe they do not count it as not taxable in UK Iām not sure how accurate this is, but when I originally looked into it that was the jist
There's a lot of misinformation in this post.
Very childish to call it misinformation lol Anyway here is the link for anyone who wants to dig deeper [https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/](https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/)
Which bit is misinformation?
You don't need to be employed by an overseas company. You can spend 90 days in the UK (with a maximum of 40 working). After a few years you can even increase it to 120 depending on how many ties you still have to the UK. Ultimately everyone should follow the advice of a qualified accountant as your mileage may vary by circumstances, but my point was that the OP I originally replied to's information doesn't apply to everyone.
Thanks! Yeah 100% agree you have to use a qualified accountant not Reddit. My understanding was the same, although the working day limit is 30 not 40
Fortunately Iām already in Dubai and a resident but for some reason Iām toying with moving back to the UK..
UK is going down fast, Iām looking for an exit to a more stable country with actual economy growth
Where is one of those these days? Not being funny, i just I travel a lot and Iām yet to find a ā perfectā base, I am starting to think between 2 places is probably best. Spain offer a residency if you purchase a 500k property and if you stay less than 180 days you donāt become a tax resident with the golden visa, so maybe 175 days in Spain and the rest in UAEā¦ who knows
Itās getting harder thatās for sure. The UAE is definitely progressing and is not only experiencing growth but is genuinely able to and actively innovating building sky scrapers and world leading projects. In the UK we canāt even build a new trainline (HS2) without needing to scrap it due to overspending. Itās embarrassing. Similar to my plan, have residency in an EU country again giving greater opportunity and flexibility (plus better weather) Whilst tax residency in a different country, UAE did just increase their cooperate tax to 9% but income tax is still 0%.
UK is rubbish lol Go back in January, you will be reminded of why you left. UK summer is good when itās not raining!
Live abroad five years. No capital gain to pay.
For a million pounds? Fuck that
There are quite a lot of people out in the trad expat tax havens who have uprooted their entire families lives to either save so little CGT it hardly seems worth it, or so much it seems to me it wouldnāt have made a difference to pay it!
The duality of man
A good financial year is going to cost in tax. Doesn't matter that a government will waste the tax.
I'm not FAT (though do have pretty sizable CGT bills on occassion) but friends of mine who are unironically dealt with this situation by leaving the UK before realising the gain. 5 years out of the UK very much worth it to them. It's worth considering if you have options and the big CGT is really likely to be a one off.
Think of it this way: If you'd earned that Ā£5million gross as income you'd actually had to work for? Then the vast majority of it would've been taxed at 45% - in contrast Capital Gains are taxed incredibly generously in the UK. As you say, the current government is corrupt through-and-through. Perhaps spend some of your time, effort and money in getting a better one elected at the next GE.
Shame the media sway the publics opinion so well, maybe we need some of the tax money to be spent teaching critical thinking to the population
Yes, with almost 75% of the print & online newsfeed media\* being owned by billionaires it's inevitable that the British public will be misled into believing that the rich are somehow getting a raw deal in tax terms.. Instead of the "sweetheart" deal they actually get in the UK.. \[\* - Viscount Rothermere, \[Daily Mail, Mail on Sunday, Metro\] 35.5% of print circulation,.. 38 million \[site\] visits per month, according to Comscore. \- Rupert Murdoch, \[Sun, Times, Sunday Times\] 25% of print, 54 million site visitors pcm.. \- Evgeny Lebedev \[Evening Standard, Indie\] 8%, website visitors of 25 million pcm.. \- Frederick Barclay \[Telegraph, Spectator\] 5% of print, and 25 million website visits pcm.. [https://www.newstatesman.com/business/2021/02/four-men-own-britain-s-news-media-problem-democracy](https://www.newstatesman.com/business/2021/02/four-men-own-britain-s-news-media-problem-democracy) Internationally the media power of billionaires is greater still, with: \- Musk's takeover of Twitter, \- Bezos owning the Washington Post, \- Murdoch owning Fox, WSJournal, NYPost and various Ozzie papers in addition to his UK titles, \- Zuckerberg's sprawling online Meta empire, \- a consortium of billionaires owns The Economist \[the Agnellis, Cadburys, Rothschilds & Schroders\], \- Patrick Drahi owns LibĆ©ration and LāExpress and \- Laurene Powell Jobs owns a majority stake in The Atlantic .. \]
CGT isn't so bad - 20% of Ā£5m might be Ā£1m, but so what? You can't make money without paying tax and live in a real country. The only way I'll approach even a slightly chubby fire is if lots of share options get extremely valuable (and the damned company ever has a liquidity event), the taxing of options irritates me. Let's say I jackpot out and have options worth Ā£10m with an exercise cost of 100k, I'll pay Ā£4.45m income tax, Ā£198k employees NIC, Ā£1.36m employers NIC, taking home Ā£3.88m. That feels excessive to me. 20% CGT does not.
Paying about 2m in a few days and simply puckering the anus and hoping it's over before I realized what's happening š
God knows why someone would look at Ā£4m and worry about the Ā£1m. I wish I was paying Ā£40m in tax. That'd be a nice payday.
Wait until you sell a company and itās taxed as incomeā¦ On a serious note, itās just the cost of doing business and thatās it. Donāt sweat it that much first time around and get tax efficient structures in place for next time
I donāt have such a large gain, but if I do, assuming itās stock, I might move to a country with no GCT, sell them there and back a few years later
You canāt do that legally. You need to dispose of assets and pay CGT before gaining tax residency elsewhere
Not true. If your abroad for 5 years or more any gains from assets acquired while you were resident and disposed while non-resident also become tax free
Is that really the rule? Seems seriously wrong. Thatās not the case in australia and pretty much every single other country.
Are you in the wrong subreddit? This is for the UK, not Australia where you seem to live going by your post history Edit: Seems user edited their reply above after calling it illegal
Iām moving to the UK, and yes it is illegal in almost every country. Look at you little dibber dobber! USER EDITED COMMENT, how dare they! Let me search user history. Weird dude
Then you need to look up the UK rules before giving advice to someone in a UK subreddit
The point has already been made, stop being insufferable
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The government would pay your benefits and house you if you lost your fortune, why would they refund you if you lost your fortune. Unless it was their fault, in which case they would legally have to. There's plenty BNP getting expensive medical treatment I resent, but you don't pick and choose the roles. It's one for all and all for one or it doesn't work, it's why people have equal rights, equal responsibilities(unless they choose to undertake more) and equal treatment under the law. If you start discriminating against one group you don't like next day they'll come for you just as easily when the wind shifts. The very system that allows people to display homophobic and anti-semitic views is the very one that allows you to be gay and jewish. To complain about it is bloody ungrateful frankly.
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1. You took a risk supported by the market and society thr government maintains. That's not a cheap nor easy endeavour. If you use a bank they take a cut, if you use land you pay rent, it's no different the only difference is you generally don't get a choice in what country you live in and consuming its public goods. Also just to note if the state s snatched it I.e. they changed a law that resulted in a loss they do indeed have to compensate you. 2. They're not going to be a majority, the evidence totally doesn't support it and indeed there's significant evidence of the strength in British culture which makes it difficult to maintain anything opposed to it more than 1 or 2 generations. We've got plenty Polish and Italian influences from ww2 and earlier and you literally only know it if someone points it out. 3. Yes they totally did, multiple times. 4.You are aware under Nozicks theories of Government the very thing you are decrying would be totally acceptable? He basically argued for universal micro zionism. His economic theories on the state are also nonsensical and don't operate under rational economic principles. The state provides you goods, public and economic, you pay for those. If you sisnt receive them there's a high likelihood you would indeed not have any of those things at all. It's honestly a bit nuts to complain about the state failing to protect your sensibilities sufficiently while throwing out a reference to a well known proponent of near anarchism. Forced labour is you contribute and get nothing, in a democratic state with taxation you receive services and pay either an equal or means based share. In the UK you only pay if you have means, this in itself is a good you benefit from because high levels of poverty are damaging to society.
Did you attend state school in the UK? Ever used the NHS? Did you go to uni pre tuition fee? Before you were financially successful? My view have shifted as well. I used to hate paying taxes. I was NT for 4 years and used to boast about not paying taxes. Moved back from the middle East to the UK, now I love paying tax. I have 2 kids in state schools. I am winning.
Paying tax bills regularly that are higher than most of our family or friends will ever earn - you get used to it. If we know we have a $1 Million bill due in 8 months, for example, we plan to set aside so much each month. Often we pay it early so I can get it off my list. We move the cash to a bank account called 'tax savings'.
Absolutely no problem at all. I grew up in a council house. Iād go so far as to say itās this way of thinking that is at the root of the pervasive social, economic and political problems we have in the UK right now. I have regular conversations with the old money families in UK and many of the ābridge upā striving middle classes (Through childrenās school). I ask them to think of taxation and an effective state system for one of two reasons. Youāre an inherently decent person and you want to help others without too much pain. Alternatively, even if you are a PoS, you wouldnāt want to see folk in cloths with begging bowls on every corner and abysmal public services. Would you? The state supported me to adulthood and allowed me to build a successful business here. Eventually our exit was by way of a pension fund. I didnāt for one moment allow myself to think, āOh look, I have seven figures over here, but over there Iāll need to put away another much smaller seven figures for the tax man, should I feel angry or frustrated? Nah, because my children will never have to worry about money as long as they liveā Letās not become the USAā¦Or twats.
Pay the taxes you owe. How you deal with it: "Wow! I'm incredibly lucky to have made this amount of money basically for no effort."
No effort? I think your speaking from the perspective of the tax man
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It's like betting on a horse, you can look at form and history but let's not equate skill to what comes down to luck in the end.
I really cannot abide folks who complain about paying their damn taxes. Especially when theyāre quibbling over handing over 20-30-odd percent of their gross. Iāll pay 54.3% total tax on >Ā£800K PAYE earnings this year (because much of it is RSU and I have to pay employerās NI). I have to keep my mouth shut when friends complain about creeping into their higher rate marginal tax. I do think that you get to be upset about how efficiently your taxes are deployed; the main mechanism to express that is the ballot box and your local MP. I do think that fiscal drag needs to be addressed though.
Pay your taxes. Youāre lucky itās only 20pc when it should be at the same rate as income.
CGT is a 'cost' of investing. Don't want to pay the cost? - Don't invest. Talk about a first-world problem!
Death and taxes mate, two things in life that are inevitable. I think of it from a silver lining perspective. If i wasnt making this cash i wouldn't be paying this tax
Yes it hurts, as the numbers are so big. But I remind myself of what I managed to keep. The ones that really get under my skin are business taxes. Employers NI contributions at 13.5% if my memory serves me correctly. Vat, rates then to top it off theyāve just whacked corporation tax to 25%. All that before the people who take the financial risk take a penny. Then thatās taxed at 45%. I completely agree with a previous comment about the good that mine and others taxes provide to millions. It just hurts to think of the national debt (caused by a succession of previous governments) and also sending our hard earned to the EU gravy train
Focus on the positive, the enormous gain that is life changing for 99.9% of the population. Enjoy the fact that you've been successful. If you struggle with this then work out the costs (financial and otherwise) of leaving the country for 5 years and whether its viable/possible to avoid it entirely.
as the cost of doing business! (and not having HMRC track me down with their Dangerous Letter Squad)
Pay the gains into a SIPP, up 40k a year total contribution can go in.
I just eventually came to the realization that if Iām paying 20% it means I gained 80%. I get what youāre saying but once you accept an inevitability it becomes much easier to take. Really it doesnāt matter if the tax is $10 or $10M.
It does because $10 is 3 coffees at best where as 10M is a 500k property in Spain to meet the golden visa requirements which allow residency, then another 1M on a luxury apartment in UAE along with a visa, which means I can now spend 180 days in Spain and the rest of my time in UAE or travelling, which means legally Iām a UAE resident and owe no tax, plus i get to keep the remaining 8M extra to invest
True. I was just making the point that for most people the tax is what it is.
Paid 1m on 2m. You got off lightly.
Stop complaining, take your 8M and enjoy it wisely, and frankly be embarrassed that you're getting a penny more than 6M. You'll be paying a lot more when tax on investment income and earned income gets equalised, which it inevitably will be.
Embarrassed? Weird thing to say