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.

[Theoretician]

I know I sympathise with you, as my plan for my pension already has a measure built-in to avoid a similar scenario, the government getting money if the risks I take pay off, but contributing nothing to my losses. If my pension pot reaches the threshold where any increase in balance would be taxed at the penalty rate (for exceeding the lifetime allowance) I will move the whole pot into safe assets earning nothing. Why should I continue to invest in equities if every pound lost falls fully on my shoulders, but the government gets more than half of every pound gained?

[JassyRadlett]

Well if, as she says, OP is investing money for pension purposes, she should take advice on whether she should be doing it in a more tax-efficient way.

The idea that CGT or IHT are inherently more unfair than other taxation is rather laughable though.

As for the statement that IHT and CGT are 'double taxation' - what a strangely narcissistic view of the economy. The money for wages isn't magicked out of the air, fresh and never taxed.

[pettywitchinlondon]

As I said if you had read it I'm investing for both pensions and savings as I'm freelance. But hey ho only read half of it and make a judgement if you want.

[morage]

Yes how dare the Government tax my earnings from my business when I took all the risks.
YABVU - People take risks everyday in small businesses. They are still taxed.

[NinkyNonkers]

I'm far from envious as we are very comfortable. But to be fair, this post was always going to get these responses. I'm sure in future you'll research and structure your investments differently.

And much of the time success is not solely down to wherewithal....as many of my food bank clients will tell you.

[FrozenAteMyDaughter]

Where are all these marvellous married couple's benefits? I thought the mca was tiny and only applied to lower rate taxpayers which presumably you are not if you are paying 28% tax? Plus, how can you moan at 28% on unearned gains when you are paying 40% on what you work hard for? It's.a.bargain by comparison.

Anyway, what we are paying taxes for is important. The NHS, schools, libraries (or what is left of them), infrastructure like decent roads etc etc. Yes, there is lots of fat and waste probably. Personally, I think the government's current policies on giving away housing association properties to a lucky few and the matching of savings for house buyers is a shocking waste.of money that could be better directed but some people love them .

Taxes are essential and countries with low taxes are generally not going to be happy places to be poor in or, in many cases, fairly uncomfortable to be moderately wealthy in too. Personally I would pay a lot of tax to know that whether my child will get the medical care she might need will not depend on the vagaries of some insurance company, even if I was lucky enough to have health insurance.

Get over yourselves and pay your taxes, or take the advice on here and plan better in future.

[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.

[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.

[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.

[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.

[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]

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]

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.

[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)

[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.

[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.

[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.

[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?

[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!

[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?