Keir Starmer's definition of working class

Germanshepherdsmum

What about the increase in value of shares though Dinahmo? What would increasing the rate of CGT do for investment?

There are shares, and then there are shares, aren't there, GSM

If you are buying shares in the primary market, i.e shares offered to capitalise a start up or to put more capital into a business, then you are supporting a business and taking a risk, which could justify a lighter tax regime.

But if you're buying on the secondary market the purchase price goes to the previous owner of the shares, not to the business which originally offered them. In which case you are merely looking for making a profit on them if they increase in value, and/or looking for an unearned income from the dividends. In which case I see no problem with CGT if you sell them and the same rate of tax on the dividend income that there would be had you gained the income by employment.

Any more than I can see any reason why Dinahmo shouldn't pay CGT on the £49,950 profit she made when she sold her £50 picture.

I gratefully accepted the £100 bonus Nationwide BS paid me recently as a profit sharing bonus because I have a current account and savings with them. Anyone with savings or a mortgage as well as a current account received this payment, a flat rate for all. Should we have rejected it as a 'bribe' to stay with them? I took it as a nice little sum to have a treat or two.
They're hoping to be able to do this again in the future, hence DH has now opened a savings account in his name. Proper little capitalists aren't we?

I am a bit confused by the idea that CGT should be paid on the profit from chattels because presumably the initial purchase was made from taxed income?

Also if profits are taxed, then how about offsetting losses on items purchased which have devalued?

Me too, ronib.

After all, if selling a property one owns, CGT is only liable if it has not been your main residence for a period of time.

How would anyone calculate the CGT owed anyway? How is the appreciation in value calculated on something which had such a variable price over the years?

Rosie51

I gratefully accepted the £100 bonus Nationwide BS paid me recently as a profit sharing bonus because I have a current account and savings with them. Anyone with savings or a mortgage as well as a current account received this payment, a flat rate for all. Should we have rejected it as a 'bribe' to stay with them? I took it as a nice little sum to have a treat or two.
They're hoping to be able to do this again in the future, hence DH has now opened a savings account in his name. Proper little capitalists aren't we?

Somehow I missed out on that because I hadn't spent enough during that period. I was rather miffed.

ronib

I am a bit confused by the idea that CGT should be paid on the profit from chattels because presumably the initial purchase was made from taxed income?

Also if profits are taxed, then how about offsetting losses on items purchased which have devalued?

So do you think that you shouldn't pay VAT on anything you purchase because you are using already taxed income to pay for your purchase?

If I buy chattels from a charity shop, or, from a car boot sale, I don’t expect to pay VAT on it because that has already been paid by the initial purchaser.
If I buy from an auction, I already have to pay a service fee. Do you think we ought to pay VAT on those goods too?
Would you like to see VAT added on household effects for probate calculations?

Mollygo

If I buy chattels from a charity shop, or, from a car boot sale, I don’t expect to pay VAT on it because that has already been paid by the initial purchaser.
If I buy from an auction, I already have to pay a service fee. Do you think we ought to pay VAT on those goods too?
Would you like to see VAT added on household effects for probate calculations?

According to a friend who was left to clear his parents' house not long ago everything had to be listed. All goods, all chattels.

I'd never heard of that before.

MaizieD another way of looking at this is that VAT is paid on new goods? Not yet another tax on second hand items?

We’re a very well taxed country with quite disappointing outcomes?

What's the difference between goods and chattels?

Capital gains tax on the sale of art

In the United Kingdom, capital gains tax applies to the sale of art if the proceeds exceed the annual exemption threshold. As of the current tax year (2022/2023), the annual exemption stands at £12,300. This means that if your total capital gains from selling art in a tax year exceed this threshold, you are liable to pay tax on the excess amount. Being aware of this exemption threshold is vital for planning your art sales strategically and minimizing your tax liability.

www.roseberys.co.uk/probate-estates-insurance-valuations/what-are-the-capital-gains-tax-implication-on-selling-art

I think the taxman would be interested in Dinahmo's £49,950 profit...

Goods are things you consume, chattels are all other personal possessions Doodledog.

And a work of art may well be a personal possession. I'm sure most art owners would claim that they are.

What else would it be? It’s personal property, not real property. Unless perhaps it’s a Banksy mural.

So have we now established that CGT can be paid on 'chattels' (personal property)?

Of course. Why would it be in doubt? It might be a piece of jewellery, a piece of furniture, a picture, a car, any possession which has increased in value since its acquisition.

Callistemon21
According to a friend who was left to clear his parents' house not long ago everything had to be listed. All goods, all chattels.

I'd never heard of that before.
Neither had I until I had to do it. Fortunately, it wasn’t like insurance where you have to give what it would cost to replace items now.

Germanshepherdsmum

Goods are things you consume, chattels are all other personal possessions Doodledog.

Ah, thanks. They are so often used together that I didn't know there was a defined difference in meaning these days.

In practice they are lumped together and there is rarely any need to resort to a definition (assuming you don’t have a cellar stacked with fine wine!).

Mollygo

If I buy chattels from a charity shop, or, from a car boot sale, I don’t expect to pay VAT on it because that has already been paid by the initial purchaser.
If I buy from an auction, I already have to pay a service fee. Do you think we ought to pay VAT on those goods too?
Would you like to see VAT added on household effects for probate calculations?

I think you have taken my post too literally.

VAT was just an exemplar tax for the purpose of asking ronib a question relevant to her 'double taxation' argument.

Other taxes are available

VAT is only chargeable by a VAT business. That’s unlikely to be your local charity shop or car boot seller.

Taxing profit on Antiques Roadshow-style charity shop finds would be a step too far for me, as would charging people if their engagement ring is worth more than it used to be, or a collection of old dolls has become valuable. There are too many variables and personal possessions should be just that. My feelings on means-testing of that sort are well documented on here.

It’s the fact that workers have all of their income above the meagre threshold taxed, have to satisfy strangers that spending in older age is not deprivation of assets and so on, when those who inherit enough to live on, or who live on rents or the interest on capital pay a smaller portion of their money that is unfair.

Someone dealing in antiques, or when the charity shop Rembrandt forms part of an estate is very different from Mrs Ordinary striking lucky and selling her one-off bargain buy.

If the sale nets more than £12,300 profit then it's subject to CGT. Which is far from likely to happen so why are people getting so invested in this?

I’m sorry Doodledog, but a taxable profit is a taxable profit no matter how or where the item was acquired. If you die owning such items they will form part of your estate for IHT purposes and your executor may have to cough up 40% of their full value. There are no exceptions, nor should there be - but you do have an annual allowance before you have to pay CGT.

People who live on rents pay income tax just as though they were employed - there are few deductions before tax nowadays. They have the same meagre threshold before they have to pay income tax, and when they sell their rental property they will have to pay CGT. What is your problem with people who aren’t in the PAYE system?

Germanshepherdsmum

I’m sorry Doodledog, but a taxable profit is a taxable profit no matter how or where the item was acquired. If you die owning such items they will form part of your estate for IHT purposes and your executor may have to cough up 40% of their full value. There are no exceptions, nor should there be - but you do have an annual allowance before you have to pay CGT.

People who live on rents pay income tax just as though they were employed - there are few deductions before tax nowadays. They have the same meagre threshold before they have to pay income tax, and when they sell their rental property they will have to pay CGT. What is your problem with people who aren’t in the PAYE system?

I know taxable profit is the same - I just think that (to me) there is a difference between a serendipitous find in a car boot sale (or whatever) and a business transaction, although I appreciate that they have the same legal status.

The 'problem' I have with people not working is that they are not contributing goods or services, and even if they do pay tax it is not at the same rate as those on PAYE. Such is life, but each time there is a rise in the tax rate, or a change in the nil rate band it is 'workers' who carry the can. That's what I believe KS meant when he talked about not increasing taxes for 'working people', and if so I applaud him. That's all I am saying, really. Those in work have to pay to support those who can afford not to.

Person A hasn't worked since she married, yet loves to hold forth about how taxpayers' money is being spent, how pensioners should pay NI if they continue to work beyond SPA etc. She and her husband arrange their finances so that he pays less on his income tax by using up her tax allowance, she got NI paid when her children were younger, paid the pension part only of NI (voluntary pension contributions) when the freebies stopped so now gets a full pension, but has contributed nothing towards education, NHS etc, from which both she and her children have benefited.

Meanwhile, there are women who have worked for decades who don't qualify for full pension because their income was too low, they didn't make enough full years because of childcare in school holidays or who were contracted out without their knowledge.

Person B was left poor after her marriage broke down when she had pre-school children. She got her share of the equity in the family home but means-testing meant that she couldn't get any help until she had spent it, so ended up with no money behind her, and had to take a low paid job that she could fit around her children when they started school. She paid tax for over 40 years, but was contracted out and didn't always earn enough to get a full year's NI contributions, so her State pension is not full. She has a very small occupational pension which takes her to just over the tax threshold when combined with the State Pension, so she will pay tax for the rest of her life, unlike Person A who will continue to live tax free.

To add insult to injury Person B had to work and pay tax until she was 66, whereas Person A stopped her partial NI contributions at 60 when a combination of the free ones and the partial ones added up to 35 years, yet all of us are told that the reason for the extra years is that the ageing population (including Person A) means that there is not enough money in the system to pay for working people to get the pensions they have paid into when they were told they would get them.

Is any of that fair?