pissed at paying cgt when I took a risk to invest my money

[pettywitchinlondon]

I've got quite a large tax bill to come as some of my investments have done very well. I don't mind paying tax usually, but I'm a bit pissed at this as I had to take a huge risk with money I've already paid tax on and if I lost it all the government wouldn't bail me out.

[Nettletheelf]

I'm a keen investor, but I wouldn't dream of complaining about paying tax on those investments. C'est la vie. If you're lucky with your choices, and your investments aren't in a tax efficient wrapper like an ISA or a SIPP, you have to pay tax on your dividends or gains. Just as you would pay tax on other income. I pay tax on my dividends in my ordinary share dealing account. Why shouldn't I?

Your original 'stake' is taxed income, but the profits you make aren't. You're not being double taxed on the same money.

I don't think that IHT is 'iniquitous', by the way. Without it and its predecessors, most of the wealth would still be in the hands of the old aristocracy. I remember when blessed Lady Di died, the Mail was full of outrage that her estate should have to pay IHT "because that's not what she would have wanted". Tough. Richer people need to be made to share with poorer people. It's called civilisation.

I work in finance, and it's surprising how many people justify their own selfishness and greed (e.g. participating in egregious tax 'avoidance' schemes, a la Take That) by bleating that Google, Amazon, Starbucks etc. are much naughtier than them.

[longtimelurker101]

Just as a thought... are you relying on the rule of law and the policing of it to protect your gains made from investments? If so then yes you should pay tax.

It is rather silly to say: " I took the risk, with my money", yes you did, but the society you live in facilitated your ability to do so. You must contribute back into it.

End of discussion

[Iggly]

You can find out what taxes are paid for easily enough. Look at government accounts!

[daisychain01]

The gripe is the lack of transparency in what taxes are paid for

Welcome to democracy OP, it's pointless griping about not having a direct say in how taxes are allocated, that's not how the system works.

As others have said, the tax on your investment risk is on the profit, the government doesn't target the 'principle' - you'll still get some profit presumably, and isn't that better than nothing?

What do they say .... Speculate to accumulate?

[BabyMurloc]

But if you just bought stuff you would have been double taxed. You would have paid income tax on your earnings and then paid VAT on whatever you bought. Double taxing happens all the time, to everyone, rich and poor. If you put fuel in your car you pay fuel duty and then you pay VAT on top of that...or is it the other way round? In any case, you pay tax on top of tax

This most peoples money is double taxed in some way or another.

[Cherryblossomsinspring]

OP congrats on the investment win. I'd just try to enjoy that and accept that you have some tax to pay on it.

[howabout]

Trying to square the circle in my head on why so many think BTL is such a great investment in that it is one of the most likely investments to lead to a CGT liability?

[Klayden]

You lead a very eventful life.

[Mistigri]

To put this in perspective, in order to incur CGT you need to realise gains of 11k a year, which suggests that the OP has assets - not including the family home - that are well into six figures.

If this investment was a risky one then it is reasonable to assume that it involved only a small proportion of her assets.

I'd reiterate what others are saying: we are not talking about the average family here, but someone who may well have assets in the high six figure (or low seven figure) range. Most people do not pay CGT because you have to be rich or careless (or both) to become liable for it.

[YetAnotherHelenMumsnet]

Hi there,
We have had a number of reports about this thread, and made quite a few deletions. We know money is a sensitive subject but could everyone be naice from now on, please?

[PomeralLights]

Did you miss my key point it's cheaper to pay the damn tax

Very few rich people have such a bizarre objection to tax that they'd rather spend more employing a team of people than just paying their tax bill! That was my point!

[MajesticWhine]

It isn’t really at all complex. It’s the easiest tax to avoid which is why so few are paying it. No team of experts needed.

• Use your ISA allowances to the full.
  
• Don’t incur a profit of more than 11,000 in any tax year. - i.e. stagger the selling of your assets
  
• if you have multiple residences and have to sell one, then make sure you live in it as your principal residence.
  

pettywitch - prove to us that you are not mega rich, how exactly did you manage to incur CGT?

[JassyRadlett]

Point is it's only the middle people that pay cgt or it - not the richest.

Your definition of 'middle' is somewhat skewed. You may want to investigate some of that perspective I mentioned earlier.

[aurynne]

pettywitchinlondon... you had some money to spare. You took a risk and invested it. You won, and you actually did really well... in my world that is a reason to celebrate.

Instead you are here moaning that you will have to pay tax on it.

If your investment had done badly, you would be here moaning that you lost money.

Could you please explain what would be needed for you to feel happy and lucky? I certainly hope you don't apply this same attitude to the rest of your life.

[pettywitchinlondon]

Of course its very complex, that's exactly why the middle people are the only people to pay it as they can't afford a team of experts to circumvent it. You haven't helped your point at all.

[MajesticWhine]

Nope. It is not the middle people who pay CGT. It is a minuscule proportion of taxpayers who pay it.

"The number of taxpayers who are liable for CGT remains very low. In 2012-13, only 154,000 individuals – roughly 0.5 per cent of the total – incurred the tax."

(Source FT.com)

[PomeralLights]

Thats just not true.

The amount of tying yourself up in knots that is required to avoid paying taxes if you are super rich is hideous. In many cases taking into account the action HMRC will likely take, it's often cheaper to just pay the damn tax than pay specialist advisors to come up with a scheme, implement then defend it in court. More and more advisors are now refusing to go beyond the bare basics of legal tax planning from fear of the GAAR (general anti-avoidance rule).

But hey, don't let the truth get in the way of your victim complex.

[pettywitchinlondon]

Point is it's only the middle people that pay cgt or it - not the richest.

I don't disagree about tax credits but that's not the topic here.

[PomeralLights]

I will never understand people who moan about CGT and IHT.

For a start only about 6% of deaths (estimated by IHT specialist colleagues during an unusual IHT settlement that went to court, used in training exercise, have every reason to believe it's an approx correct figure) result in an IHT liability so if you are paying it you are rich, unless being in the top 6% means you're still just 'average'.

Similarly it's actually quite hard to get into paying CGT, there's all sorts of exemptions (e.g. main residence) not to mention the annual allowance.

The reality of it is that the majority of people will never see a CGT or IHT bill. But yet taxes that focuses almost entirely on the very richest in society are seen as unfair. The mind boggles.

Unfair is NMW being so low it's propped up by tax credits. To me that is the very definition of a broken system that is unfair.

[pettywitchinlondon]

I didn't come here for financial advice. Wrong. I came on here to moan about the system.

If only basic grammar knowledge could make up for lacking intelligence.

[MajesticWhine]

"I'm not by any means rich"

I assume if you are liable for CGT you are investing a good deal more than your annual ISA allowance, (currently 15k), in which case, you are rich by most people's standards. So it is only fair you pay your CGT.

[sparkysparkysparky]

Dick I may be for a petty grammar post but I'm not the one who came on AIBU for financial advice about CGT. Assuming that was your purpose in posting.

[JassyRadlett]

God help anyone who has the wherewithal to do well for themselves....

Don't forget those of us who have done well but have the sense perspective to recognise that we are rich relative to the vast majority of the population. I don't always feel rich, because many of my friends are richer than me for various reasons, and it's very easy to get stuck in that bubble rather than seeing the big picture.

But it is quite graceless for people who are objectively doing better than the vast, vast majority of the population to claim that we are not rich (or well-off, if 'rich' offends your sensibilities).

OP, if you're not taking advantage of tax arrangements designed to level the playing field between self-invested pensions and other pension schemes, that's your problem.