Tax avoiders to be deliberately bankrupted.....?..
Discussion
sidicks said:
How about equalising the rate of tax on income and gains, as an example? Given that many tax schemes work by shifting 'returns' from one category to another to be charged at a different (lower) rate, this would be an immediate benefit.
Likewise simplifying the nonsense marginal rates that currently exist.
Up or down? Up and you potentially have retrospective tax, down, and there is far less tax to collect.Likewise simplifying the nonsense marginal rates that currently exist.
Edited by sidicks on Tuesday 29th November 14:55
However, done over time, and properly, this could work, and there are moves to move capital to income, for example in the Private Equity world. But if you did move everything to a uniform rate of tax, how do you overlay reliefs which are currently available for CGT, eg ER? You'd replace one set of rules with another, which would take years to "perfect". And in the meantime, people would try to plan around it.
It's not an excuse not to simplify tax, but it's not quite as simple as it might appear. The interaction of many different Acts is very complex, and would be very complex to rewrite.
Alpinestars said:
V8 Fettler said:
Legislation dealing with unfair contracts is one example.
Sorry, but you are clutching at straws. The arrangements wil be governed by an engagement letter (otherwise known as a written contract). Good luck with trying to overturn one. It would be nonsensical if a weasel-worded contract had precedence over legislation.
EddieSteadyGo said:
V8 Fettler said:
It's either legal or illegal, "extreme edge of legality" = feeble weasel words.
I'm not an insurer.
It isn't a simple as that - quite often in law, putting aside for a minute this particular case, there are arguments for an against which need to be weighed up. I'm not an insurer.
In this case, Alpinestars highlighted towards the start of the thread the issue relates to whether the company is considered to be trading.
Now you can probably construct a good argument that it is trading; after all it is buying a product, adding value by packaging it in a different form and then selling it with anticipated healthy profits.
So from that perspective it might be considered legal. However, when you look at the flow of money and how it appears to be designed to generate tax relief as its main objective you might conclude it is artificial and not really trading after all.
So there isn't a rulebook you can refer to in advance with a set of yes and no answers. It all depends how you weigh these points up and how 'aggressive' you want to be in the interpretation.
Eric Mc said:
Simple law is easilly circumvented. That's why law starts out simple and grows complex over time.
We've had over 1,000 years of law making in this country. We have had over 200 years of modern tax legislation. We can't help but have a complex code. Any country that has such a deep legal history will have similar issues.
There are several manufacturing, industrial and agricultural processes that can claim a history in the UK of 2000 years plus, but that's all it is: history. Most history is irrelevant baggage and should be consigned to history. Same applies to historical legislation, discard the baggage. We've had over 1,000 years of law making in this country. We have had over 200 years of modern tax legislation. We can't help but have a complex code. Any country that has such a deep legal history will have similar issues.
EddieSteadyGo said:
V8 Fettler said:
The best legislation should be simple, straight forward and easy to interpret; as should guidance and codes. Is the sale of these particular financial products regulated or unregulated?
It isn't the system we have I'm afraid - we have legislation and case law which progressively builds a body of law to deal with the wide variety of situations. So even if the rules are simple, the real life situations to which they apply are invariably complex - hence it often depends upon interpretation of the law and how much weight you give to each side of the argument.
sidicks said:
How about equalising the rate of tax on income and gains, as an example? Given that many tax schemes work by shifting 'returns' from one category to another to be charged at a different (lower) rate, this would be an immediate benefit.
Likewise simplifying the nonsense marginal rates that currently exist.
I agree that there's lots that could be done.Likewise simplifying the nonsense marginal rates that currently exist.
Edited by sidicks on Tuesday 29th November 14:55
We could abolish VAT - eliminating billions in VAT fraud overnight...as well as reducing bureaucracy and helping legal businesses be competitive
Abolish IHT and there's no need for all the "scams" and trusts
Fold in NI (both) and IT and eliminate a lot of bad employment practices that are designed to avoid EER's NI
..and of course you know the tax that could be introduced to cover these changes & that's pretty much impossible to avoid?..
V8 Fettler said:
EddieSteadyGo said:
V8 Fettler said:
It's either legal or illegal, "extreme edge of legality" = feeble weasel words.
I'm not an insurer.
It isn't a simple as that - quite often in law, putting aside for a minute this particular case, there are arguments for an against which need to be weighed up. I'm not an insurer.
In this case, Alpinestars highlighted towards the start of the thread the issue relates to whether the company is considered to be trading.
Now you can probably construct a good argument that it is trading; after all it is buying a product, adding value by packaging it in a different form and then selling it with anticipated healthy profits.
So from that perspective it might be considered legal. However, when you look at the flow of money and how it appears to be designed to generate tax relief as its main objective you might conclude it is artificial and not really trading after all.
So there isn't a rulebook you can refer to in advance with a set of yes and no answers. It all depends how you weigh these points up and how 'aggressive' you want to be in the interpretation.
But you won't find a clear cut rulebook for the types of cases we are discussing here for the reasons outlined previously.
sidicks said:
Eric Mc said:
Name any tax laws that have been "simplified" in recent decades?
And name any simplification that didn't actually result in unintended complex outcomes.
Tax and law is complex because human behaviour is complex - not to mention devious.
How about equalising the rate of tax on income and gains, as an example? Given that many tax schemes work by shifting 'returns' from one category to another to be charged at a different (lower) rate, this would be an immediate benefit.And name any simplification that didn't actually result in unintended complex outcomes.
Tax and law is complex because human behaviour is complex - not to mention devious.
Likewise simplifying the nonsense marginal rates that currently exist.
Edited by sidicks on Tuesday 29th November 14:55
And, be wary of politicians "simplifying" tax - it is usually a euphemism for INCREASING tax.
V8 Fettler said:
Eric Mc said:
Simple law is easilly circumvented. That's why law starts out simple and grows complex over time.
We've had over 1,000 years of law making in this country. We have had over 200 years of modern tax legislation. We can't help but have a complex code. Any country that has such a deep legal history will have similar issues.
There are several manufacturing, industrial and agricultural processes that can claim a history in the UK of 2000 years plus, but that's all it is: history. Most history is irrelevant baggage and should be consigned to history. Same applies to historical legislation, discard the baggage. We've had over 1,000 years of law making in this country. We have had over 200 years of modern tax legislation. We can't help but have a complex code. Any country that has such a deep legal history will have similar issues.
PS - you must achieve the following whilst you are at it -
i) not cause the Exchequer to lose any income
ii) alienate swathes of the voting demographic
iii) not make the country less competitive in the international markets than it already is
iv) introduce any inadvertent discrimination or unfairness that could be open to legal challenge
V8 Fettler said:
For financial services' contracts involving consumers where the contract is made in the UK under UK legislation then it has to be fair; enforcement described here: https://www.fca.org.uk/firms/unfair-contract-terms
It would be nonsensical if a weasel-worded contract had precedence over legislation.
They are not weasel-worded. I've never come across a contract by any accounting firm that has been overturned. Have you?It would be nonsensical if a weasel-worded contract had precedence over legislation.
V8 Fettler said:
Alpinestars said:
V8 Fettler said:
Legislation dealing with unfair contracts is one example.
Sorry, but you are clutching at straws. The arrangements wil be governed by an engagement letter (otherwise known as a written contract). Good luck with trying to overturn one. It would be nonsensical if a weasel-worded contract had precedence over legislation.
EddieSteadyGo said:
V8 Fettler said:
EddieSteadyGo said:
V8 Fettler said:
It's either legal or illegal, "extreme edge of legality" = feeble weasel words.
I'm not an insurer.
It isn't a simple as that - quite often in law, putting aside for a minute this particular case, there are arguments for an against which need to be weighed up. I'm not an insurer.
In this case, Alpinestars highlighted towards the start of the thread the issue relates to whether the company is considered to be trading.
Now you can probably construct a good argument that it is trading; after all it is buying a product, adding value by packaging it in a different form and then selling it with anticipated healthy profits.
So from that perspective it might be considered legal. However, when you look at the flow of money and how it appears to be designed to generate tax relief as its main objective you might conclude it is artificial and not really trading after all.
So there isn't a rulebook you can refer to in advance with a set of yes and no answers. It all depends how you weigh these points up and how 'aggressive' you want to be in the interpretation.
But you won't find a clear cut rulebook for the types of cases we are discussing here for the reasons outlined previously.
Eric Mc said:
V8 Fettler said:
Eric Mc said:
Simple law is easilly circumvented. That's why law starts out simple and grows complex over time.
We've had over 1,000 years of law making in this country. We have had over 200 years of modern tax legislation. We can't help but have a complex code. Any country that has such a deep legal history will have similar issues.
There are several manufacturing, industrial and agricultural processes that can claim a history in the UK of 2000 years plus, but that's all it is: history. Most history is irrelevant baggage and should be consigned to history. Same applies to historical legislation, discard the baggage. We've had over 1,000 years of law making in this country. We have had over 200 years of modern tax legislation. We can't help but have a complex code. Any country that has such a deep legal history will have similar issues.
PS - you must achieve the following whilst you are at it -
i) not cause the Exchequer to lose any income
ii) alienate swathes of the voting demographic
iii) not make the country less competitive in the international markets than it already is
iv) introduce any inadvertent discrimination or unfairness that could be open to legal challenge
Alpinestars said:
V8 Fettler said:
For financial services' contracts involving consumers where the contract is made in the UK under UK legislation then it has to be fair; enforcement described here: https://www.fca.org.uk/firms/unfair-contract-terms
It would be nonsensical if a weasel-worded contract had precedence over legislation.
They are not weasel-worded. I've never come across a contract by any accounting firm that has been overturned. Have you?It would be nonsensical if a weasel-worded contract had precedence over legislation.
https://www.financialdirector.co.uk/2016/08/01/hmr...
Within the context of this thread, the reality is that the regulatory bodies don't have the firepower to take on the big four http://www.independent.co.uk/news/uk/crime/emb-000...
Mrr T said:
V8 Fettler said:
Alpinestars said:
V8 Fettler said:
Legislation dealing with unfair contracts is one example.
Sorry, but you are clutching at straws. The arrangements wil be governed by an engagement letter (otherwise known as a written contract). Good luck with trying to overturn one. It would be nonsensical if a weasel-worded contract had precedence over legislation.
Within the context of this thread, the risk should always sit with the financial professionals and their PI cover, because that's what they're paid for.
V8 Fettler said:
By definition. unsophisticated consumers are unlikely to able to effectively negotiate from a personal position of knowledge and expertise; if they did seek professional financial advice from a professional financial adviser and that advice was flawed then the unsophisticated consumer should be able to seek recompense for the flawed financial advice provided by the professional financial adviser.
Within the context of this thread, the risk should always sit with the financial professionals and their PI cover, because that's what they're paid for.
I think you have misunderstood my post. The investors may be financially unsophisticated but they are rich and financially unsophisticated.Within the context of this thread, the risk should always sit with the financial professionals and their PI cover, because that's what they're paid for.
While I do not know the details of this specific scheme I assume the sellers would have advised the investors they should take independent legal and financial advice on the scheme. The investor is normally required to sign a statement to say they have been informed of the sellers recommendation. So long as the seller knows the investor has the financial resources to take such advice the contract is not covered by the consumer regulations. Whether the investor takes such advice is then up to them.
V8 Fettler said:
Within the context of this thread, contracts involving major accountancy firms have been "defeated". A better description would be "declared unlawful".
https://www.financialdirector.co.uk/2016/08/01/hmr...
Within the context of this thread, the reality is that the regulatory bodies don't have the firepower to take on the big four http://www.independent.co.uk/news/uk/crime/emb-000...
One sided intra group interest deductions were widespread at the time. I assume you have evidence that GK sued EY on the basis of an unfair contract or some other regulation outside of the contract?https://www.financialdirector.co.uk/2016/08/01/hmr...
Within the context of this thread, the reality is that the regulatory bodies don't have the firepower to take on the big four http://www.independent.co.uk/news/uk/crime/emb-000...
V8 Fettler said:
By definition. unsophisticated consumers are unlikely to able to effectively negotiate from a personal position of knowledge and expertise; if they did seek professional financial advice from a professional financial adviser and that advice was flawed then the unsophisticated consumer should be able to seek recompense for the flawed financial advice provided by the professional financial adviser.
Within the context of this thread, the risk should always sit with the financial professionals and their PI cover, because that's what they're paid for.
The key word is 'advice', it's not a guarantee, you can choose to accept such advice or (as I've done on numerous occasions) decline. It's the same with legal professionals, you can get advice or opinion on a point of law from a solicitor or a barrister but it's only advice, there's no come back if a judge or jury disagrees and finds against you. Professional Indemnity insurance isn't intended to cover these types of situation.Within the context of this thread, the risk should always sit with the financial professionals and their PI cover, because that's what they're paid for.
RYH64E said:
V8 Fettler said:
By definition. unsophisticated consumers are unlikely to able to effectively negotiate from a personal position of knowledge and expertise; if they did seek professional financial advice from a professional financial adviser and that advice was flawed then the unsophisticated consumer should be able to seek recompense for the flawed financial advice provided by the professional financial adviser.
Within the context of this thread, the risk should always sit with the financial professionals and their PI cover, because that's what they're paid for.
The key word is 'advice', it's not a guarantee, you can choose to accept such advice or (as I've done on numerous occasions) decline. It's the same with legal professionals, you can get advice or opinion on a point of law from a solicitor or a barrister but it's only advice, there's no come back if a judge or jury disagrees and finds against you. Professional Indemnity insurance isn't intended to cover these types of situation.Within the context of this thread, the risk should always sit with the financial professionals and their PI cover, because that's what they're paid for.
Mrr T said:
V8 Fettler said:
By definition. unsophisticated consumers are unlikely to able to effectively negotiate from a personal position of knowledge and expertise; if they did seek professional financial advice from a professional financial adviser and that advice was flawed then the unsophisticated consumer should be able to seek recompense for the flawed financial advice provided by the professional financial adviser.
Within the context of this thread, the risk should always sit with the financial professionals and their PI cover, because that's what they're paid for.
I think you have misunderstood my post. The investors may be financially unsophisticated but they are rich and financially unsophisticated.Within the context of this thread, the risk should always sit with the financial professionals and their PI cover, because that's what they're paid for.
While I do not know the details of this specific scheme I assume the sellers would have advised the investors they should take independent legal and financial advice on the scheme. The investor is normally required to sign a statement to say they have been informed of the sellers recommendation. So long as the seller knows the investor has the financial resources to take such advice the contract is not covered by the consumer regulations. Whether the investor takes such advice is then up to them.
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