Elite Tax Haven Details Leaked
Discussion
AstonZagato said:
As I understand it (IANAL), if the Trust owns a property (as in the situation reported), then you either have to pay the fair market rent to live in it (which needs to come out of some sort of income, which then gets taxed). The Trust then has a tax liability on the income. If you don't pay the rent, then HMRC assumes you have a taxable benefit to the tune of the fair market rent.
What the trust would do is move the house outside of your estate. However, in the UK, your principal private residence is part of your estate whether in your estate or not - HMRC looks through trusts. Other houses might get away with it.
I might be wrong but don't think there is much anyone can do to avoid paying IHT on their prinicpal private residence.
By giving it away and then paying the fair market rent for seven years? Beneficiary will probably have to pay CGT if/when they sell if not their PPR though. What the trust would do is move the house outside of your estate. However, in the UK, your principal private residence is part of your estate whether in your estate or not - HMRC looks through trusts. Other houses might get away with it.
I might be wrong but don't think there is much anyone can do to avoid paying IHT on their prinicpal private residence.
fblm said:
So then the reason all these Kings Road arse wipes live off trust income isn't really some respectably clever tax wheeze, its because their parents figured they were too thick to manage their own money?
Yes, everyone who wants to leave money to their children (in trust), perhaps a life insurance policy written into trust, think their kids are to stupid to handle their own finances. - Tosser. Edited by Francois de La Rochefoucauld on Friday 10th November 16:12
AW111 said:
I have a different view - I happily claim legitimate deductions, but avoid contrived situations like that, even if legal (for now). I have ditched a previous accountant over his insistence that I should be claiming things that I felt were morally wrong although technically legal.
Would I like to pay less tax? Of course. But I also appreciate that society can't function without it.
that is totally fair and I completely respect that. Maybe it comes down to politics a little bit too.Would I like to pay less tax? Of course. But I also appreciate that society can't function without it.
I won't open a can of worms, but let's just say, I don't agree with how the money is spent.
If say my tax bill was 100k a year - and I knew that 20k schools, 20k hospitals, 20k services , 20k pensions, 20k military - then I would deemed it acceptable.
At the minute it goes into a total black hole of incompetence, and thus I begrudge it.
Tony33 said:
ow someone will probably prove me wrong and say anyone can do it who pays tax but the impression I get is these schemes are only viable to the very rich as the entry fees are so expensive. Tales of people paying nearly £1 million to advisors for whom the net gains are very well worth it.
So there seems a threshold of earnings at which avoidance becomes more possible. I think this is the bit that seems most unfair.
Well, it's a bit like saying it's not fair that we can all legally buy a Ferrari but most can't afford to - in a way. Look at Hamilton - to lower his tax bill he's had to move to a place where a one bed flat is over a million quid; this only makes sense if you get a net benefit which he clearly does. That wouldn't apply to me or you as we're a bit more impoverished - I do get the point - but you've got to spend a lot of money to save a lot of money, you can spend a little money to save a little money (duty free), but you can't spend a little money to save a lot of money - particularly as you don't have a lot of money to save anyway... So there seems a threshold of earnings at which avoidance becomes more possible. I think this is the bit that seems most unfair.
Sensible piece in the Economist. tldr; "...the first lot of Paradise Papers revelations seem to contain nothing so damning. Moreover, the focus on Bermuda risks reinforcing the stereotype that the real culprits are small, palm-fringed islands, when it is in fact the much larger, onshore financial centres, such as London and New York, that offer the most attractive combination of respectability and secrecy"
https://www.economist.com/news/finance-economics/2...
https://www.economist.com/news/finance-economics/2...
Francois de La Rochefoucauld said:
AstonZagato said:
As I understand it (IANAL), if the Trust owns a property (as in the situation reported), then you either have to pay the fair market rent to live in it (which needs to come out of some sort of income, which then gets taxed). The Trust then has a tax liability on the income. If you don't pay the rent, then HMRC assumes you have a taxable benefit to the tune of the fair market rent.
What the trust would do is move the house outside of your estate. However, in the UK, your principal private residence is part of your estate whether in your estate or not - HMRC looks through trusts. Other houses might get away with it.
I might be wrong but don't think there is much anyone can do to avoid paying IHT on their prinicpal private residence.
By giving it away and then paying the fair market rent for seven years? Beneficiary will probably have to pay CGT if/when they sell if not their PPR though. What the trust would do is move the house outside of your estate. However, in the UK, your principal private residence is part of your estate whether in your estate or not - HMRC looks through trusts. Other houses might get away with it.
I might be wrong but don't think there is much anyone can do to avoid paying IHT on their prinicpal private residence.
As the money has been loaned to the trust I assume it will still form part of your estate when you snuff it. The main (only?) financial plus would be, if is was a second property, you wouldn't pay the additional Stamp Duty rate.
RacerMDR said:
that is totally fair and I completely respect that. Maybe it comes down to politics a little bit too.
I won't open a can of worms, but let's just say, I don't agree with how the money is spent.
If say my tax bill was 100k a year - and I knew that 20k schools, 20k hospitals, 20k services , 20k pensions, 20k military - then I would deemed it acceptable.
At the minute it goes into a total black hole of incompetence, and thus I begrudge it.
I get your point - but doesn't most of the incompetence (waste etc) take place within the actual institutions (whether they are the ones you have picked or others)?I won't open a can of worms, but let's just say, I don't agree with how the money is spent.
If say my tax bill was 100k a year - and I knew that 20k schools, 20k hospitals, 20k services , 20k pensions, 20k military - then I would deemed it acceptable.
At the minute it goes into a total black hole of incompetence, and thus I begrudge it.
Roman Rhodes said:
RacerMDR said:
that is totally fair and I completely respect that. Maybe it comes down to politics a little bit too.
I won't open a can of worms, but let's just say, I don't agree with how the money is spent.
If say my tax bill was 100k a year - and I knew that 20k schools, 20k hospitals, 20k services , 20k pensions, 20k military - then I would deemed it acceptable.
At the minute it goes into a total black hole of incompetence, and thus I begrudge it.
I get your point - but doesn't most of the incompetence (waste etc) take place within the actual institutions (whether they are the ones you have picked or others)?I won't open a can of worms, but let's just say, I don't agree with how the money is spent.
If say my tax bill was 100k a year - and I knew that 20k schools, 20k hospitals, 20k services , 20k pensions, 20k military - then I would deemed it acceptable.
At the minute it goes into a total black hole of incompetence, and thus I begrudge it.
I see how much is wasted in my line of work..........and that's private sector, so I can only imagine.
However, throwing money outside of the UK, when we don't have enough here to manage our own Business (Country) - is a disgrace.
andy_s said:
Tony33 said:
ow someone will probably prove me wrong and say anyone can do it who pays tax but the impression I get is these schemes are only viable to the very rich as the entry fees are so expensive. Tales of people paying nearly £1 million to advisors for whom the net gains are very well worth it.
So there seems a threshold of earnings at which avoidance becomes more possible. I think this is the bit that seems most unfair.
Well, it's a bit like saying it's not fair that we can all legally buy a Ferrari but most can't afford to - in a way. Look at Hamilton - to lower his tax bill he's had to move to a place where a one bed flat is over a million quid; this only makes sense if you get a net benefit which he clearly does. That wouldn't apply to me or you as we're a bit more impoverished - I do get the point - but you've got to spend a lot of money to save a lot of money, you can spend a little money to save a little money (duty free), but you can't spend a little money to save a lot of money - particularly as you don't have a lot of money to save anyway... So there seems a threshold of earnings at which avoidance becomes more possible. I think this is the bit that seems most unfair.
Roman Rhodes said:
I get your point - but doesn't most of the incompetence (waste etc) take place within the actual institutions (whether they are the ones you have picked or others)?
Waste within the institutionshair brained schemes
No joined up thinking so some things get done twice (badly) or you have people pulling in different directions so project scopes change
Consensus by committee which means every thing takes three times as long
Big projects which are poorly managed and over budget
Lifers on the payroll who couldn't get a job elsewhere but are perfectly acceptable in the public sector
Inordinate amounts of red tape
Everything costing local\central government three times as much as it would in the private sector because it's not real money and no one is held accountable
Put it this way, If most of the government departments operated in the private sector where inefficiency and poor management actually has real financial consequences , they'd be out of business within a year but the tax payer is the one who foots the bill or they just put it on the never never so that whole just gets bigger and bigger.
Halb said:
Ahh, soz.
What do you think of universal basic income?
https://www.theguardian.com/society/2017/feb/19/ba...
I used to think it was all a bit too Commie for my liking, but thinking about the benefits of a UBI more there are quite a few positives to consider before dismissing the idea completely.What do you think of universal basic income?
https://www.theguardian.com/society/2017/feb/19/ba...
Reduced bureaucracy, no means testing, no form filling, UK Citizen over 18, under 67, simple monthly payment, scrap all other benefits, though include an added uplift for disability (subject to assessment), nothing more, save on DWP staff.
Commit a crime, lose your UBI, make crime have consequences for a strata of people who currently have nothing to lose (at least on a material level), could see a reduction in crime rates.
Get rid of tax allowances, the UBI replaces all allowances, everyone receives it regardless of income, want a better life than can be afforded on UBI work for it, gets rid of the "Poverty Gap".
Tie it to carrying out several weeks a year of voluntary work or public service; working for charities, working on community projects, serving in a Territorial Army, be a Special Constable, an RNLI volunteer, Mountain Rescue, etc, etc, more potential central and local governmental savings.
A proper holistic approach could make a UBI quite an attractive proposition and bring a sense of community which would have other less tangible but non the less wide ranging benefits to British society.
On second thoughts it's still a bit Commie.
steviegunn said:
I used to think it was all a bit too Commie for my liking, but thinking about the benefits of a UBI more there are quite a few positives to consider before dismissing the idea completely.
Reduced bureaucracy, no means testing, no form filling, UK Citizen over 18, under 67, simple monthly payment, scrap all other benefits, though include an added uplift for disability (subject to assessment), nothing more, save on DWP staff.
Commit a crime, lose your UBI, make crime have consequences for a strata of people who currently have nothing to lose (at least on a material level), could see a reduction in crime rates.
Get rid of tax allowances, the UBI replaces all allowances, everyone receives it regardless of income, want a better life than can be afforded on UBI work for it, gets rid of the "Poverty Gap".
Tie it to carrying out several weeks a year of voluntary work or public service; working for charities, working on community projects, serving in a Territorial Army, be a Special Constable, an RNLI volunteer, Mountain Rescue, etc, etc, more potential central and local governmental savings.
A proper holistic approach could make a UBI quite an attractive proposition and bring a sense of community which would have other less tangible but non the less wide ranging benefits to British society.
On second thoughts it's still a bit Commie.
It does make a lot of sense. Not least kicking the benefit trap into touch, which is a pretty perverse symptom of the current system.Reduced bureaucracy, no means testing, no form filling, UK Citizen over 18, under 67, simple monthly payment, scrap all other benefits, though include an added uplift for disability (subject to assessment), nothing more, save on DWP staff.
Commit a crime, lose your UBI, make crime have consequences for a strata of people who currently have nothing to lose (at least on a material level), could see a reduction in crime rates.
Get rid of tax allowances, the UBI replaces all allowances, everyone receives it regardless of income, want a better life than can be afforded on UBI work for it, gets rid of the "Poverty Gap".
Tie it to carrying out several weeks a year of voluntary work or public service; working for charities, working on community projects, serving in a Territorial Army, be a Special Constable, an RNLI volunteer, Mountain Rescue, etc, etc, more potential central and local governmental savings.
A proper holistic approach could make a UBI quite an attractive proposition and bring a sense of community which would have other less tangible but non the less wide ranging benefits to British society.
On second thoughts it's still a bit Commie.
fblm said:
steviegunn said:
I used to think it was all a bit too Commie for my liking, but thinking about the benefits of a UBI more there are quite a few positives to consider before dismissing the idea completely.
Reduced bureaucracy, no means testing, no form filling, UK Citizen over 18, under 67, simple monthly payment, scrap all other benefits, though include an added uplift for disability (subject to assessment), nothing more, save on DWP staff.
Commit a crime, lose your UBI, make crime have consequences for a strata of people who currently have nothing to lose (at least on a material level), could see a reduction in crime rates.
Get rid of tax allowances, the UBI replaces all allowances, everyone receives it regardless of income, want a better life than can be afforded on UBI work for it, gets rid of the "Poverty Gap".
Tie it to carrying out several weeks a year of voluntary work or public service; working for charities, working on community projects, serving in a Territorial Army, be a Special Constable, an RNLI volunteer, Mountain Rescue, etc, etc, more potential central and local governmental savings.
A proper holistic approach could make a UBI quite an attractive proposition and bring a sense of community which would have other less tangible but non the less wide ranging benefits to British society.
On second thoughts it's still a bit Commie.
It does make a lot of sense. Not least kicking the benefit trap into touch, which is a pretty perverse symptom of the current system.Reduced bureaucracy, no means testing, no form filling, UK Citizen over 18, under 67, simple monthly payment, scrap all other benefits, though include an added uplift for disability (subject to assessment), nothing more, save on DWP staff.
Commit a crime, lose your UBI, make crime have consequences for a strata of people who currently have nothing to lose (at least on a material level), could see a reduction in crime rates.
Get rid of tax allowances, the UBI replaces all allowances, everyone receives it regardless of income, want a better life than can be afforded on UBI work for it, gets rid of the "Poverty Gap".
Tie it to carrying out several weeks a year of voluntary work or public service; working for charities, working on community projects, serving in a Territorial Army, be a Special Constable, an RNLI volunteer, Mountain Rescue, etc, etc, more potential central and local governmental savings.
A proper holistic approach could make a UBI quite an attractive proposition and bring a sense of community which would have other less tangible but non the less wide ranging benefits to British society.
On second thoughts it's still a bit Commie.
Lower tax to increase revenue to help pay for it and you have a perfect left meets right society that no one can moan about. What on earth would we do all day?!
Roman Rhodes said:
The main point is that "the poor don't pay much tax because they are poor". Would you support those "at the other end of the scale" paying more tax so that "most households" receive more?
I’d support the tax bill being spread more fairly, which would mean the additional,rate being dropped back to 40%, as it was for so long under Labour, my being allowed to fund my pension again, and the personal allowance being returned to higher earners.To make up,the gap, I’d add a couple of pence onto the basic rate.
James_B said:
I’d support the tax bill being spread more fairly, which would mean the additional,rate being dropped back to 40%, as it was for so long under Labour, my being allowed to fund my pension again, and the personal allowance being returned to higher earners.
To make up,the gap, I’d add a couple of pence onto the basic rate.
You aren't really anywhere near the upper middle part of the priority list, so you will be waiting a fair while for that to happen.To make up,the gap, I’d add a couple of pence onto the basic rate.
James_B said:
I know that many people deride this idea, but it’s clearly true. People earning millions a year tend to have a choice about where to live. You can nearly double your take-home if you spend a year in Dubai, and you’re not far off doubling it in a fair few other places. I’ve a few friends who’ve done this, so the UK went from getting half a million a year from them to getting nothing at all.
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