The Rich According to the Guardian

[Judy1234]

www.guardian.co.uk/money/2008/aug/04/workandcareers.executivesalaries

Xenia (my dear) et al- Since when the straight forward use of a tax allowance is tax avoidance. I always thought that tax avoidance was used more to describe the sharper end of tax planning such as dubious used of Venture Capital Trusts and such like.

Hope that I am not being presumptious but I agree that you should not sell the island. Long term land is (obviously) a scarce/limited commodity. And further, it adds to the romantic notion associated with you .

Hmm, not sure about this island. How far is it above the (current) sea-level!

Sorry to hear about your divorce, Xenia. I had always assumed from your posts that you had split from your ex a long time ago.

On my way to the Toy shop this afternoon, I stopped at Natwest on Regent Street to deposit a cheque into an associate's account. The teller said that she didn't recognise the sort code. It turned out that it is a Jersey NatWest account. I immediately thought of you all and wondered what Dittany et al would think of me . Am I implicated by dealing with someone doing something offshore. And remember my socialist youth?

On my way to the Toy shop this afternoon, I stopped at Natwest on Regent Street to deposit a cheque into an associate's account. The teller said that she didn't recognise the sort code. It turned out that it is a Jersey NatWest account. I immediately thought of you all and wondered what Dittany et al would think of me . Am I implicated by dealing with someone doing something offshore. And remember my socialist youth?

There is nothing dubious about Venture CVapital Trusts. The tax breaks are to encourage investors to invest in very high risk business start ups.

There is some very sharp practice out there involving VCTs. I was shown some schemes that would allow me to claim back much of Income tax for a few years by some aggressive tax accountants but i didn't go for it in the end

"There is some very sharp practice out there involving VCTs. I was shown some schemes that would allow me to claim back much of Income tax for a few years by some aggressive tax accountants"

Say there are a bunch of loons with business ideas. Some of the ideas are good, some of them are weak and some of them are plain fruitiloops. They all have one thing in common - they need people to put money into them to succeed. Seedcorn, it's called.

Now, of necessity, most of those ideas will bomb. For every success like Google there will be literally thousands of failures. Most people investing stand to lose their money.

In order to encourage the next Google and to create an environment that allows businesses to grow, there is a tax relief. You can offset the loss against your income tax.

VCTs are a perfectly normal and legal way to invest. It's not evasion. It's not avoidance.

Fed up of the tax debate..... Here is something equally divisive. Was Boris (Johnson)right to lose the £16 million from Venezuala that was supposed to subsidise transport for the poor? In return for helping improve the Venezualan public transport system? Now, TFL has to pay back the moeny it has already spent. Or was this cutting off our noses to spite our faces? Or does this deserve a new thread?

Last word on VCTs: there can be abused. If tax consultant calls you and shows you a way to manufacture losses when you had no intention of starting a business then I would say that is sharp practice. They look through the city directory and call people up who they think might be interested.

I think what has come out of this thread loud and clear is the following:

(1) People do not understand how other people live - witness the bankers in the opening article

(2) People have little understanding of the tax system, and that lack of understanding breeds suspicion and distrust

(3) People have little understanding of how tax revenues are applied and suspect that the government does not spend wisely or well

I just have a completely different mind set from some people - if you can lawfully not pay take I thnk that's fine. VCTs are just another way, a risky way.

I don't actually believe in there being tax incentives to make citizens behave in particular ways 0 like tax relief on pensions etc. Would prefer decisions to be fiscally neutral with no reliefs but this is the system we have.

(My divorce was 5 years ago whoever asked if it were recent)

(Hunting - a bit off topic. If you allow fishing (working class) but ban hunting with more than 2 hounds there does seem to be a bit of a class bias in there somewhere)

(Islands...some around there have ben for sale for ages - it's by no means a good financial investment but we'll see. It's reasonably high above sea level and not in a hurricane zone so probably okay)

..some one introduced me at a conference this week and as well as the dull work spiel mentioned my island... I replied that the most interesting bit about my CV was that I had 5 children.

And by the way, I would have attended board meetings and all that so that I would be a "genuine investor taking genuine risks". I lost a lot of sleep over whether I should go for this. But I conclude that the regulatory and documentation risk was too high. And of course I thought of the immorality of it all as well

Quattro

But you know what? I am learning... (about the tax system)

Xenia- I am sorry to be so forward but is the island lettable? Is there a dwelling? Just thinking I could have a month off away from it all.

LOL at Toughie.

I think this thread is taking another turn entirely ...

Sorry, i think very tangentially. I shall refrain.

TD - I too looked at some VCTs, but decided that they were too high risk. I didn't see it as immoral. Like Quattro said - genuine ideas that needed money from investors.

And Xenia - I absolutely agree about women taking control of their finances. I knew nothing, but am gradually learning - there is a lot of information available. I wish I had learnt more about it at school. My family didn't really discuss money so I didn't know anything practical.

A word of advice for those still battling on thoughout this long thread!

Saying something over and over again, in different language, using different words doesn't work if the person is not capable of understanding the message.

Dittany is never going to get it. No matter how clear you make it.

Think of it as trying to teach a 2year old the science involved in splitting an atom. It doesn't matter how many times you explain it, the grey matter just isn't developed enough to get it!

Has anyone used VCTs s(successfully) very recently? You have to wait a few years to get cash right? Then you can buy insurance to reduce the risk but i thought i will then have counterparty/credit risk on the insurer introducing some more due dilligence/documentation risk. The lawyers always win in the end.

Soapy, I take the point. I had given up anyway. Did you see Purits brilliant post lower down? It said everything I'd been trying to explain in three lines. A marvel of concision. I am going to repeat it

Tax evasion is illegal and only done by BAD people.
Tax avoidance is legal but dubious. It is done by 'Them', fat cats and other people that you disapprove of.
Tax mitigation is legal and, in fact, merely sensible tax planning. It is done by noble, moral people like you and me.

Potoroo- women and ethnic minorities often have a financial planning deficit, i think. I looked into setting up a volunatry scheme to address the latter but as you know, anything that looks like offering financial advice even if free is fraught with regulation. There is a way to do this but I got distracted and I am to revisit.

A MN thread giving personal financial views might not do any harm though?

Dittany - If you were a dog I fancy you'd be a Staffordshire Bull Terrier.

yawn

so your definition of tax compliance is paying taxes that YOU think we should pay and legitimately avoiding taxes that YOU think are OK to avoid, but NOT legitimately avoiding taxes that YOU think we SHOULDN'T avoid, even if doing so is completely legal and above board.

So now we know. You'll forgive us if we all think that is a unique and ever-so-slightly naive (not to say idiotic) approach. But hey, you go, girl