Given the Russian cash funding the Tory party.....

I've gone slightly off topic here but this in response to the various comments about taxation.

Many thousands of people who aren't in employment live off the proceeds of their investments, whether it's rented property or stocks and shares. If you are experienced in buying and selling stocks and shares you earn up to £24870 tax free each year, ie just under £50,000 per couple. That is by utilising the annual CGT exemption of £12300 plus the current year personal allowance of £12570. The only thing to stop you is if HMRC decide that you are carrying on an adventure in the nature of trade. This last applies to share dealing.

Compare this to an employee on a salary of £24870 who would pay income tax of £2514 and NIC of £1836 making a total of £4350 deducted.

If you then take into account the fact that the employee is likely to be paying rent or a mortgage whereas the investor has probably paid for their house you can see the iniquities in the present system.

We are living longer, even if retiring after our anticipated retirement ages, we do need to contribute more in tax/NIC than many of us do at present.

Germanshepherdsmum

So, Daisy, a company wants to raise money by issuing shares. Nobody wants to buy them as income on dividends will be taxed at the same rate as the rest of their income. Solution?

What else will they do with their capital?

Quite a few choices if the income on all the investments is going to be taxed at the same rate. Maybe buy property, maybe invest in gold or fine wine if you’re seeking capital growth rather than income … it will all take away investment in the company, for which there has to be an incentive.

Germanshepherdsmum

Quite a few choices if the income on all the investments is going to be taxed at the same rate. Maybe buy property, maybe invest in gold or fine wine if you’re seeking capital growth rather than income … it will all take away investment in the company, for which there has to be an incentive.

Property rents should be taxed at the same rate as income. There's no coherent reason why it shouldn't be. 'Investment' in art, gold, fine wines etc. doesn't bring in an income at all, just the possibility that it might there might be an increase in value when it comes to selling such assets. So we can leave them out of the taxation equation, can't we.

Frankly I don't believe that people will stop investing in shares just because they have to pay more tax on the dividends. It's like the 'capital flight' myth. They will always have the prospect of selling their shares at a profit, possibly a very handsome one, if the company is successful...

And I believe that there are other methods of capitalising new businesses... I doubt if many go directly to the stock market

www.pczone.co.uk/5-ways-to-fund-your-new-business-project/

realbusiness.co.uk/the-pros-and-cons-of-listing-your-business-on-the-stock-market

Nobody GSM? We better go back to slavery then. They would make even more profit off the backs of others that way. If fact I am sure that was the same argument used for not abolishing it.

Mind you, I'm talking from a position of some ignorance...

My shares were purchased for income and capital growth. Without the incentive of low income tax on dividends I would definitely have invested elsewhere. With share purchase comes considerable risk. You have to have a reward for taking that risk or why bother?

My last reply to Germanshepherdsmum Wed 23-Feb-22 16:02:56.

???

GSM Gold, fine wines etc aren't going to pay the bills until you sell them. So, do you starve, or restrict your pleasures because your investments are growing in value.

Germanshepherdsmum

Quite a few choices if the income on all the investments is going to be taxed at the same rate. Maybe buy property, maybe invest in gold or fine wine if you’re seeking capital growth rather than income … it will all take away investment in the company, for which there has to be an incentive.

That wouldn't work. Earnings/income from all sources would be counted as income and be part of the same tax structure - adding it all together. Also, all allowances would be the same. There is no ethical reason for the difference; it just leads to the gap between rich and poor getting wider. When you sell the items that only or also earn capital growth, the tax would be the same as on all capital gains. That might even make it possible to have a lower tax rate when buying a house. Again it could help even up the gap which has grown even wider over the last 10 years.

If it did lead to a different bias in investments, surely that is just the unfettered marketplace working. Very Johnsonian Conservatism.

If all the billions of dirty money leave the UK- what will be the effect on the financial markets, and the UK in particular?

On exchange rates, and so much more.

What about the billions hidden in luxury apartments etc, in London and elsewhere?

Germanshepherdsmum

My shares were purchased for income and capital growth. Without the incentive of low income tax on dividends I would definitely have invested elsewhere. With share purchase comes considerable risk. You have to have a reward for taking that risk or why bother?

Where else would you invest, then?

Do you only invest in new shares?

Because anything else is pure speculation and doesn't deserve 'incentives'. Because the money isn't going to the companies, it's just going to another speculator.

Kali2

If all the billions of dirty money leave the UK- what will be the effect on the financial markets, and the UK in particular?

On exchange rates, and so much more.

What about the billions hidden in luxury apartments etc, in London and elsewhere?

I wouldn't worry about it, Kali2, it isn't going to happen.

Kali2

If all the billions of dirty money leave the UK- what will be the effect on the financial markets, and the UK in particular?

On exchange rates, and so much more.

What about the billions hidden in luxury apartments etc, in London and elsewhere?

So much of it has gone into Tory coffers that the average person will probably not notice the difference other than the price of houses coming down in some parts of London.

It's just another aspect of this Dirty Parliament. Heaven knows what will be uncovered when they go.

Dinahmo

GSM Gold, fine wines etc aren't going to pay the bills until you sell them. So, do you starve, or restrict your pleasures because your investments are growing in value.

I have other income Dinahmo. Property can provide an income, taxed at a higher rate than dividends at present of course, as well as hopefully capital growth; the other items I mentioned (in which I haven't invested) capital growth only (though the wine might be difficult to keep!).

MaizieD

Germanshepherdsmum

My shares were purchased for income and capital growth. Without the incentive of low income tax on dividends I would definitely have invested elsewhere. With share purchase comes considerable risk. You have to have a reward for taking that risk or why bother?

Where else would you invest, then?

Do you only invest in new shares?

Because anything else is pure speculation and doesn't deserve 'incentives'. Because the money isn't going to the companies, it's just going to another speculator.

My shares were all bought as new shares.

“There’s renewed concern [among Tory MPs] about what [Johnson] might have seen and done during as many as half a dozen visits to Lebedev’s Italian villa near Perugia, sometimes flying in the host’s private jet.”

The New Statesman.

As said before, I think they have enough photos and videos to blackmail him to Kingdom come and way beyond!

?

Carole Cadwalladr

The news from Kiev is so ominous tonight. But I keep coming back to this. Boris Johnson’s govt is complicit. It took the dodgy donations. It enabled the laundering of the cash. It shelters the Kremlin elite, and it failed, failed, failed to investigate.

youtu.be/AdDJu0Wqb2k

this explains things quite well about Russian money, London and the Conservative Party.