Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Dividends, a prime taxation target?

General discussions about equity high-yield income strategies
Lootman
The full Lemon
Posts: 18674
Joined: November 4th, 2016, 3:58 pm
Has thanked: 628 times
Been thanked: 6559 times

Re: Dividends, a prime taxation target?

#325270

Postby Lootman » July 10th, 2020, 7:19 pm

Eboli wrote:I doubt whether dividends are a prime target.

The best way to raise substantial taxation with minimal effect on GDP is through taxes on land, which is substantially under-taxed at present. Taxes on land are difficult to avoid and if current taxes on land (IHT, CGT, Council taxes &c.) are replaced by taxes on land values so much the better.

Land value taxes have something to be said for them theoretically. If you were designing a country from scratch you might implement one.

But the problem is getting there from here. Such a tax would devalue property prices and so the 60% of voters who own their home would not be happy. A lot of wealthier folks might dump their property and leave the country, taking their assets with them, which would lower the overall tax take.

So it is one of those things that it an elegant idea in theory but that might not attract enough voter support.

scrumpyjack
Lemon Quarter
Posts: 4810
Joined: November 4th, 2016, 10:15 am
Has thanked: 605 times
Been thanked: 2673 times

Re: Dividends, a prime taxation target?

#325285

Postby scrumpyjack » July 10th, 2020, 8:10 pm

Quite apart from the complete impracticality of revaluing every plot of land in the country. Manna from heaven for the surveyors and valuers and the appeals would take decades!

TUK020
Lemon Quarter
Posts: 2039
Joined: November 5th, 2016, 7:41 am
Has thanked: 762 times
Been thanked: 1175 times

Re: Dividends, a prime taxation target?

#325345

Postby TUK020 » July 11th, 2020, 8:53 am

Wizard wrote:
Somebody now in their twenties may think that a university education without £60k of debt at the end, a job that is not based on a zero-hours contract, a gold plated final salary pension and a triple-lock on their State pension would be nice, but it isn't an option for them. On top of that they are already going to have to pick up the tab for past generations wrecking the planet. Now it seems some think they also have to pay for Covid mitigation even though statistically they had only a negligable chance of being killed by it. No wonder their is no four letter word that many young people find quite so insulting as to call somebody a "Boomer".


You missed out restrictive planning laws to suppress supply of property for the benefit of the older generation 'haves', meaning that most youngsters have no chance of getting to own their own home, and are condemned to spend most of their disposable income on rent

Dod101
The full Lemon
Posts: 16629
Joined: October 10th, 2017, 11:33 am
Has thanked: 4343 times
Been thanked: 7534 times

Re: Dividends, a prime taxation target?

#325348

Postby Dod101 » July 11th, 2020, 9:21 am

TUK020 wrote:
Wizard wrote:
Somebody now in their twenties may think that a university education without £60k of debt at the end, a job that is not based on a zero-hours contract, a gold plated final salary pension and a triple-lock on their State pension would be nice, but it isn't an option for them. On top of that they are already going to have to pick up the tab for past generations wrecking the planet. Now it seems some think they also have to pay for Covid mitigation even though statistically they had only a negligable chance of being killed by it. No wonder their is no four letter word that many young people find quite so insulting as to call somebody a "Boomer".


You missed out restrictive planning laws to suppress supply of property for the benefit of the older generation 'haves', meaning that most youngsters have no chance of getting to own their own home, and are condemned to spend most of their disposable income on rent


Many people even in civilised places like western Europe pay rent all their lives. It is the English who have this obsession with owning their own home. 'Boomer' has six letters.

This thread is on High Yield and Strategies? It sounds more like PD.

Dod

CryptoPlankton
Lemon Slice
Posts: 786
Joined: November 4th, 2016, 12:12 pm
Has thanked: 1544 times
Been thanked: 873 times

Re: Dividends, a prime taxation target?

#325351

Postby CryptoPlankton » July 11th, 2020, 9:39 am

Wizard wrote:
tjh290633 wrote:
Wizard wrote:My mistake. I had forgotten the UK was a barren wasteland devoid of any infrastructure before the current pensioners built everything that now exists :lol: ...

Moderator Message:
Offensive personal remark removed. Wizard, even though this isn't HYP-P I would remind you of the site-wide requirement to play the ball, not the man. Accusing an 87-year-old of dementia isn't really very funny. -- MDW1954


I'm not sure whether your education covered it, but this country was involved in a not-insignificant altercation called World War II between 1939 and 1945. During this period, there was a bombing campaign, known as "The Blitz", which caused widespread damage to infrastructure and destroyed 2 million houses. To put this into perspective, that would take the current generation 15 years to replace at the average house building rate of the past decade. The devastation caused by this conflict, both here and abroad, led to hardship unimaginable to most of today's youth. Food rationing for some items continued until 1954.

Would I rather start out with the supposedly bleak prospects of today or, like my father, as a telegraph boy dodging bombs and Messerschmitt bullets in war-torn Folkestone? Hmm...

Lest we forget.

Charlottesquare
Lemon Quarter
Posts: 1775
Joined: November 4th, 2016, 3:22 pm
Has thanked: 105 times
Been thanked: 560 times

Re: Dividends, a prime taxation target?

#325800

Postby Charlottesquare » July 13th, 2020, 12:29 pm

Alaric wrote:
scrumpyjack wrote:So the long term strategy is to pay it off by devaluing the liability via inflation. It's what HMG have always done before.


If the borrowing is in index linked form, inflation increases rather than reduces the eventual bill to be settled. The Great War had been financed at interest rates of 4% and higher. As a consequence when in the 1920s and 1930s Governments wanted or needed to spend on social security or defence, they couldn't afford to if they tried to balance the budget as well, the interest coupons being a first charge on Government expenditure. In WW2, they followed Keynes advice and kept interest rates low and in the 1950s and 1960s allowed continuous inflation.


They actually tended to redeem the WW1 debt and replace it with lower coupon debt post event e.g in 1927 with 4% consols and in 1932 with the famous 3.5% war stock.

Charlottesquare
Lemon Quarter
Posts: 1775
Joined: November 4th, 2016, 3:22 pm
Has thanked: 105 times
Been thanked: 560 times

Re: Dividends, a prime taxation target?

#325802

Postby Charlottesquare » July 13th, 2020, 12:36 pm

Snorvey wrote:£50 billion a year in pension tax relief would go a long way to paying for all this. I would consider upping the ISA allowance to 40k (i.e. the current maximum pension annual allowance and scrapping tax relief. You may only end up kicking the can down the road a couple of decades, but it could be enough.


That is just kicking the can down the road, on average pension savings are already reducing year after year, remove tax relief (either funds going in with relief or coming out tax free ) and nobody would bother with pensions unless an employer was say matching.

One is only prepared to tie monies up in pensions because of the perks, no perks and nobody will bother, so 45/50 years from now you really would have a pensions crises.

Charlottesquare
Lemon Quarter
Posts: 1775
Joined: November 4th, 2016, 3:22 pm
Has thanked: 105 times
Been thanked: 560 times

Re: Dividends, a prime taxation target?

#325804

Postby Charlottesquare » July 13th, 2020, 12:44 pm

scrumpyjack wrote:Quite apart from the complete impracticality of revaluing every plot of land in the country. Manna from heaven for the surveyors and valuers and the appeals would take decades!


Well, we can get the practice in right now with rates revaluation appeals re retail and leisure- material change in circumstance.

Seems to me I maybe need to keep buying up antique jewelry to adorn my other half, what the state does not know about will not hurt them.

monabri
Lemon Half
Posts: 8396
Joined: January 7th, 2017, 9:56 am
Has thanked: 1539 times
Been thanked: 3428 times

Re: Dividends, a prime taxation target?

#325809

Postby monabri » July 13th, 2020, 1:08 pm

Stamp Duty Reserve Tax increase from 0.5% to 1.0%.

https://en.wikipedia.org/wiki/Stamp_dut ... eserve_Tax

"A unique feature of SDRT, compared to other purely domestic taxes in the United Kingdom, is that more than 40% of the annual intake is collected from outside the UK, thus creating an annual inflow of approx. £1.5 billion from foreign investors to the UK government."

https://assets.publishing.service.gov.u ... Sept18.pdf

Chart 1B - would indicate that a doubling of SDRT from 0.5% to 1% might raise an extra ~£2.8bn per year.

And those investors with spare money can afford it would be the view, no doubt!

scrumpyjack
Lemon Quarter
Posts: 4810
Joined: November 4th, 2016, 10:15 am
Has thanked: 605 times
Been thanked: 2673 times

Re: Dividends, a prime taxation target?

#325811

Postby scrumpyjack » July 13th, 2020, 1:22 pm

monabri wrote:Stamp Duty Reserve Tax increase from 0.5% to 1.0%.

https://en.wikipedia.org/wiki/Stamp_dut ... eserve_Tax

"A unique feature of SDRT, compared to other purely domestic taxes in the United Kingdom, is that more than 40% of the annual intake is collected from outside the UK, thus creating an annual inflow of approx. £1.5 billion from foreign investors to the UK government."

https://assets.publishing.service.gov.u ... Sept18.pdf

Chart 1B - would indicate that a doubling of SDRT from 0.5% to 1% might raise an extra ~£2.8bn per year.

And those investors with spare money can afford it would be the view, no doubt!


More likely this would drive the dealing elsewhere and the tax take would drop substantially.

Charlottesquare
Lemon Quarter
Posts: 1775
Joined: November 4th, 2016, 3:22 pm
Has thanked: 105 times
Been thanked: 560 times

Re: Dividends, a prime taxation target?

#325816

Postby Charlottesquare » July 13th, 2020, 1:37 pm

Snorvey wrote:That is just kicking the can down the road, on average pension savings are already reducing year after year, remove tax relief (either funds going in with relief or coming out tax free ) and nobody would bother.......


Well I did say it was kicking the can down the road, but the financial problems are now - i.e. pandemic related. And I disagree with the 'nobody would bother'. Plenty of people save for retirement without using pension plans. Whether it's ISA's or Buy To Lets or whatever. Some only have a pension plan for the reasons you state (employer contributions)

If they're investing into a pension, despite all the inflexibility, rather than some other investment vehicle because of the tax relief, then do we really need to give them the tax relief?


The catch is people are weak willed, pensions lock money up, but if no perk nobody will lock it up.

Who pays if someone makes no provision for their retirement? Generally, everyone else.

1nvest
Lemon Quarter
Posts: 4323
Joined: May 31st, 2019, 7:55 pm
Has thanked: 680 times
Been thanked: 1316 times

Re: Dividends, a prime taxation target?

#325829

Postby 1nvest » July 13th, 2020, 3:29 pm

Charlottesquare wrote:The catch is people are weak willed, pensions lock money up, but if no perk nobody will lock it up.

Who pays if someone makes no provision for their retirement? Generally, everyone else.

People have allowed themselves to become imprisoned. The UK has one if not the highest number of surveillance cameras per head. Your activities/spending/movements are all tracked/recorded. The amounts and whereabouts of 'your' wealth is all known - which makes that wealth just a loan, potentially called in at any time. There is no need for taxes; Money isn't backed by anything, can just be printed/spent at the cost of devaluing all other notes in circulation - a form of micro-taxation. The BoE used to raise/lower interest rates to redirect economic activity (market valuations). Nowadays it can print money and buy bonds, or sell bonds, in order direct yields (and prices) to particular levels, which in turn adjusts stock prices (as fund managers rebalance out of rising bond prices into stocks for instance). The BoE could just follow that practice for a while and then opt to just state the yield that it desired and that it would buy (sell) bonds to achieve ... and the market would automatically adjust prices to that yield likely without the BoE actually having to buy or sell any bonds itself. The EU/ECB bailed out massive bad pre-2008 German bets, swapped those debts over to the ECB in return for lower risk ECB debts. The ECB printed 2 trillion Euros as part of that, buying up first government bonds, then junk bonds, then even stocks. That conceptually could be extended further, print to buy up all land/houses for instance. The only barrier is that sooner or later faith is lost and large-scale capital out-flight induces hyperinflation.

If you don't comply, for instance consider your savings to be your money that you worked to build up, not the states money available to be confiscated at any time, then the state will consider that money as potentially being the proceeds from illicit activities and could look to lock down/seize that wealth. Or at least put up laws to hinder that freedom.

A consequence of ever increasing controls is that those in a more free position will look to avoid such containment, shift their wealth to where the risks are relatively lower. Even in that aspect however and states are collaborating with each other to hinder such freedoms.

The UK used to be a democratic and relatively free country. No longer is that the case, and even free-speech has been squashed.

Citizen Smith - Power to the peepulllll!!!

kempiejon
Lemon Quarter
Posts: 3488
Joined: November 5th, 2016, 10:30 am
Has thanked: 1 time
Been thanked: 1145 times

Re: Dividends, a prime taxation target?

#325830

Postby kempiejon » July 13th, 2020, 3:30 pm

Charlottesquare wrote:
The catch is people are weak willed, pensions lock money up, but if no perk nobody will lock it up.

Who pays if someone makes no provision for their retirement? Generally, everyone else.


I agree that people are weak willed also they don't like to defer gratification so want the money today. Generally the rules are currently that employers have to contribute and employees are automatically enrolled, it's not much of a perk but pensions are out of scope for most benefits and bankruptcy. The tax benefit is sometimes a red herring as it's really deferment pay in tax free then get taxed on withdrawal, there are breaks with the 25% tax free allowance and those in lower tax brackets in retirement.

Lootman
The full Lemon
Posts: 18674
Joined: November 4th, 2016, 3:58 pm
Has thanked: 628 times
Been thanked: 6559 times

Re: Dividends, a prime taxation target?

#325833

Postby Lootman » July 13th, 2020, 3:44 pm

scrumpyjack wrote:
monabri wrote:Stamp Duty Reserve Tax increase from 0.5% to 1.0%.

https://en.wikipedia.org/wiki/Stamp_dut ... eserve_Tax

"A unique feature of SDRT, compared to other purely domestic taxes in the United Kingdom, is that more than 40% of the annual intake is collected from outside the UK, thus creating an annual inflow of approx. £1.5 billion from foreign investors to the UK government."

https://assets.publishing.service.gov.u ... Sept18.pdf

Chart 1B - would indicate that a doubling of SDRT from 0.5% to 1% might raise an extra ~£2.8bn per year.

And those investors with spare money can afford it would be the view, no doubt!

More likely this would drive the dealing elsewhere and the tax take would drop substantially.

Or else share dealing would remain in the UK but investors and traders would focus more on non-UK shares, where there is no stamp duty anyway.

Maybe invest in ETFs rather than ITs. And so on.

Arborbridge
The full Lemon
Posts: 10366
Joined: November 4th, 2016, 9:33 am
Has thanked: 3599 times
Been thanked: 5227 times

Re: Dividends, a prime taxation target?

#325837

Postby Arborbridge » July 13th, 2020, 3:57 pm

1nvest wrote:
If you don't comply, for instance consider your savings to be your money that you worked to build up, not the states money available to be confiscated at any time, then the state will consider that money as potentially being the proceeds from illicit activities and could look to lock down/seize that wealth. Or at least put up laws to hinder that freedom.

A consequence of ever increasing controls is that those in a more free position will look to avoid such containment, shift their wealth to where the risks are relatively lower. Even in that aspect however and states are collaborating with each other to hinder such freedoms.

The UK used to be a democratic and relatively free country. No longer is that the case, and even free-speech has been squashed.

Citizen Smith - Power to the peepulllll!!!


I would have thought seizing money from illicit activities was a thoroughly good thing, and we need more controls, not fewer. You need an incredibly large unexplained dollop of wealth before you are in any danger and this would only effect a minute percentage of the population. I think you are seeing a problem which does not exist for nearly all of our population.

The UK is still relatively free, but freedom is dependent on society having control over those who do not accept the responsibility which somes with that freedom. And some of the threats to our freedom, particularly of free speech, comes from the modern equivalent of lynch mobs - I'm thinking of social media attacks on various persons who speak their minds or express an opinion contrary to what the mob agrees with. This "cancal culture" as it's become known, can be an unwarranted restriction in free speech, can wreck people's lives and careers. This, in my view is just as much a threat as state control: control by mob rule. At least governments are broadly responsible to the voters: lynch mobs are not and can be moved by small numbers of trouble makers.

Arb.

Lootman
The full Lemon
Posts: 18674
Joined: November 4th, 2016, 3:58 pm
Has thanked: 628 times
Been thanked: 6559 times

Re: Dividends, a prime taxation target?

#325844

Postby Lootman » July 13th, 2020, 4:26 pm

Arborbridge wrote:I would have thought seizing money from illicit activities was a thoroughly good thing, and we need more controls, not fewer. You need an incredibly large unexplained dollop of wealth before you are in any danger and this would only effect a minute percentage of the population.

I doubt that it would effect me either. That said if I were suddenly asked to explain where my net worth comes from in any detail, I'd struggle to do that. It derives from a combination of working for 26 years, stock market gains, profits from various properties, rents received, an inheritance, winning a lawsuit and having a fairly well off wife. And being fairly frugal.

That much I know but it would be a nightmare actually working out exactly how much came from where and when. A zealous government inspector could certainly make my life miserable trying to get me to break it all down in detail. And I'd hate to be on the hook for tax on any amount I could not fully prove to have been gained legally.

Alaric
Lemon Half
Posts: 6031
Joined: November 5th, 2016, 9:05 am
Has thanked: 20 times
Been thanked: 1398 times

Re: Dividends, a prime taxation target?

#325849

Postby Alaric » July 13th, 2020, 4:32 pm

Lootman wrote:That much I know but it would be a nightmare actually working out exactly how much came from where and when. A zealous government inspector could certainly make my life miserable trying to get me to break it all down in detail.


One or two organisations have attempted this on the grounds that it was needed to comply with money laundering regulations. Selftrade was one example who eventually backed own. Quite what forced them to back off isn't known, perhaps they were reminded that if assets within the fence of UK institutions were transferred to them, they were allowed to rely on the source of funds having been validated by the previous organisation.

1nvest
Lemon Quarter
Posts: 4323
Joined: May 31st, 2019, 7:55 pm
Has thanked: 680 times
Been thanked: 1316 times

Re: Dividends, a prime taxation target?

#325851

Postby 1nvest » July 13th, 2020, 4:35 pm

You have to be careful as hitting the rich is subjective. £3300 of assets has you in the worlds 50% richest for instance. The reality is that the really rich will side step being targeted as that tends to be a predominant objective of their investing. Leaving it for the rest to fill the shortfall hole that they leave/avoided.

Charlottesquare
Lemon Quarter
Posts: 1775
Joined: November 4th, 2016, 3:22 pm
Has thanked: 105 times
Been thanked: 560 times

Re: Dividends, a prime taxation target?

#325854

Postby Charlottesquare » July 13th, 2020, 4:36 pm

kempiejon wrote:
Charlottesquare wrote:
The catch is people are weak willed, pensions lock money up, but if no perk nobody will lock it up.

Who pays if someone makes no provision for their retirement? Generally, everyone else.


I agree that people are weak willed also they don't like to defer gratification so want the money today. Generally the rules are currently that employers have to contribute and employees are automatically enrolled, it's not much of a perk but pensions are out of scope for most benefits and bankruptcy. The tax benefit is sometimes a red herring as it's really deferment pay in tax free then get taxed on withdrawal, there are breaks with the 25% tax free allowance and those in lower tax brackets in retirement.


The AE pensions for most are wholly inadequate, if they start making contributions from zero earnings they would be much improved, but because the starting threshold is very low the amounts actually paid over are pretty paltry.

Here is a real one I did earlier, member of staff earning £1,973.22 per month, £23,678.64 pa, employee pays £58.13, employer £43.60, with tax relief re employee that makes £116.26 pm, £1,395.12 pa paid in, hardly setting the heather alight re future pension in payment.

I have no problem whether tax relief given at front end or exit, I appreciate tax relief is not the big plus it is "free" employer contribution that sells unless one pays tax at 40% , but until AE payments are based from zero earnings upwards they are actually bad news in some ways- "oh, my pension is sorted, I have this AE one, don't need to do anything else" is what you will hear from staff. And of course as an employer I can hardly give investment advice, but most people who just have AE schemes are seriously deluded so anything that encourages pension saving is imho a good thing.

Arborbridge
The full Lemon
Posts: 10366
Joined: November 4th, 2016, 9:33 am
Has thanked: 3599 times
Been thanked: 5227 times

Re: Dividends, a prime taxation target?

#325872

Postby Arborbridge » July 13th, 2020, 6:07 pm

Lootman wrote:
Arborbridge wrote:I would have thought seizing money from illicit activities was a thoroughly good thing, and we need more controls, not fewer. You need an incredibly large unexplained dollop of wealth before you are in any danger and this would only effect a minute percentage of the population.

I doubt that it would effect me either. That said if I were suddenly asked to explain where my net worth comes from in any detail, I'd struggle to do that. It derives from a combination of working for 26 years, stock market gains, profits from various properties, rents received, an inheritance, winning a lawsuit and having a fairly well off wife. And being fairly frugal.

That much I know but it would be a nightmare actually working out exactly how much came from where and when. A zealous government inspector could certainly make my life miserable trying to get me to break it all down in detail. And I'd hate to be on the hook for tax on any amount I could not fully prove to have been gained legally.


That's perfectly true, but the question would be: "is the wealth accumulated within the bounds of probability for a normal waged earner - even a very successful one?" I don't believe our State is after middling fry, but concentrate on those of sudden or extreme wealth which cannot reasonably be explained. When someone's husband is accused of bank embezzlement and the wife is spending untold millions which she says is all her normal earnings, can one blame the authorities for raising eyebrows?

Having said that, of course, if one makes a mistake - which could be an unwitting one - they could well go over the books with a fine toothcomb. However, I doubt they would seriously waste their time unless it was worthwhile.

Arb.


Return to “High Yield Shares & Strategies - General”

Who is online

Users browsing this forum: No registered users and 10 guests