Reducing tax ?

[Blod]

From


You could well be right ,but there is nothing better then farm to pass money down without tax implications

True, as long as the accommodation isn’t OTT and any outbuilding developments are cannily arranged. I’m out of my depth now

 

[Sid]

The op want to reduce tax, BTL probably they lease tax efficient vehicle there is.

Even after the stamp duty hike?

Property prices have stagnated in last 12 months.

If you have kids that "help" on the farm pay them a wage.

Then when it comes to collee uni car insurance you will have saved tax on that money.
My kids have bought and insured their own cars.

 

[Robw54]

I know I don't take Bupa plan from the company I work for as the Gov consider it a benefit and tax me on it. That and the company car would give me a negative tax code.

Seems ridiculous I can get a plan that might take a small amount of pressure of the health service yet I and loads of others won't take it for tax reasons. Talking to an Aus colleague they get taxed more if they don't take private health insurance

I've never understood why private heath is a taxable benefit.

 

[Robw54]

Some people have done well out of houses. I'm not knocking your investment. It's done ok. It looks to me like a 185-28=157, leaving a gain of 88k. And I'll bet that 28k spent last year wasn't the only money you've spent over the last 21 years, but moving on. That's a 3.99% gain per year for 21 years. More than half of that has been eaten by inflation - 69k in 1996 is 122 today to stand still (so it's a real gain of 35k). And, you bought it with tax paid money. So it cost 29% more if charged at basic rate self employed. That's really 89k. A real gain of 15k? And the gain has presumably been subject to capital gains tax, at a rate of 18 or possibly 28%. Some of that will be a tax of the inflation part, which is horrendous when you think about it.

The winning part is the income. Not sure what figure your 9% arrived from, but if youre a basic rate tax payer, again, make that 6%. Still good. Is that net of running costs like rates, insurance etc?

With a self invest pension, it's tax free going in, and the gains are tax free. It will be taxed at a time of your life when you would naturally expect to have less income than you do now, so probably a lower effective tax rate overall than if taxed today. But I fully agree that the big risk is government policy change. Probably best to split saving for retirement into several streams to spread risk.

The CGT used to be per year as well.

My advisor suggested the situation may get a lot worse with CGT and I think we are heading towards a lot more asset taxes as it is in other countries and here in the past. I own houses and the government has made the direction of travel v clear. They have made no bones about taxing some sections over 100% of income where interest rate relief has been lost.

How many votes will be lost if an ag land tax came in with APR being perceived as being abused for avoidance?

 

[Robw54]

From


You could well be right ,but there is nothing better then farm to pass money down without tax implications

If The the government had a choice between removing APR and removing pension relief which do you think more likely?

 

[Turra farmer]

If The the government had a choice between removing APR and removing pension relief which do you think more likely?

I wouldn't hazard a guess ,

 

[Flat 10]

Im sure there are good pensions out there, but personally I see pensions being the next big scandal in 15-20 years time when all the people that have been forced to start workplace pensions in the last 2 years or so realise the returns are rubbish!

 

[Robw54]

I wouldn't hazard a guess ,

The one that does the least political damage.

The few hundred thousand buy to letters for example hit by the taxes or those getting hit by the various tappers on income tax won't cost you an election, especially if you're labour.

 

[Turra farmer]

T

Im sure there are good pensions out there, but personally I see pensions being the next big scandal in 15-20 years time when all the people that have been forced to start workplace pensions in the last 2 years or so realise the returns are rubbish!

They are an ongoing scandal

 

[Robw54]

Im sure there are good pensions out there, but personally I see pensions being the next big scandal in 15-20 years time when all the people that have been forced to start workplace pensions in the last 2 years or so realise the returns are rubbish!

My auto enrolement done 14% since last Jan. It's now worth nearly 4x what I put in with various reliefs and company contrib.

 

[Flat 10]

My auto enrolement done 14% since last Jan. It's now worth nearly 4x what I put in with various reliefs and company contrib.

This sounds sarcastic but; Good I'm pleased for you! Sounds like its doing what it should be doing.
I just don't believe that everyone will get as good a deal as you, but I may be wrong. I'm also not sure that anyone knows the effect of what this extra invested money will do to the economy in the longer term either, might be good might be bad. We won't know for a bit.

 

[Robw54]

This sounds sarcastic but; Good I'm pleased for you! Sounds like its doing what it should be doing.
I just don't believe that everyone will get as good a deal as you, but I may be wrong. I'm also not sure that anyone knows the effect of what this extra invested money will do to the economy in the longer term either, might be good might be bad. We won't know for a bit.

Pension get a bad wrap but for higher rate up wards you get cash in hand back now if paid out of income.

They are staggeringly generous and I can't see it continuing.

Surely 40k from the company account is better spent than upgrading a machine to avoid tax which will be worth v little in 20 yrs.

The vast majority could park 200k and pay v little if any on the way out.

I'm not a FA just a normal bloke and you only need to look at the inflow to see its what a lot are doing.

Of corse the rules may change on the way out but that goes for anything. The pensioners are the voters and will be last to be hit.

 

[Turra farmer]

Pension get a bad wrap but for higher rate up wards you get cash in hand back now if paid out of income.

They are staggeringly generous and I can't see it continuing.

Surely 40k from the company account is better spent than upgrading a machine to avoid tax which will be worth v little in 20 yrs.

The vast majority could park 200k and pay v little if any on the way out.

I'm not a FA just a normal bloke and you only need to look at the inflow to see its what a lot are doing.

Of corse the rules may change on the way out but that goes for anything. The pensioners are the voters and will be last to be hit.

Once it's in , it's out of your control , you will get 25% tax free at a certain age , then you will be taxed on rest as income ,

 

[Robw54]

Once it's in , it's out of your control , you will get 25% tax free at a certain age , then you will be taxed on rest as income ,

200k , less 50 tax free. Leave 150 taken over 20 yr from say 60 (or passed) on say 8k yr. Add in 8 state at 68. Won't be paying much on that and what u going to live on?

That 200 might only have cost u 50 originally.

 

[Robw54]

Once it's in , it's out of your control , you will get 25% tax free at a certain age , then you will be taxed on rest as income ,

Agree biggest risk I see is them moving private pension access date. It's currently 55 mine will be 58 but due to move 10 yr behind state, it could be 5 which would compress your tax. You can now pass it on tax free to 75 and pretty much there after.

I'm not saying go all in but it has a place in tax management.

Pay some tax, buy some land, houses or a new tractor if that what u want. Life to short to be living for when you're 65.

 

[rob1]

Some people have done well out of houses. I'm not knocking your investment. It's done ok. It looks to me like a 185-28=157, leaving a gain of 88k. And I'll bet that 28k spent last year wasn't the only money you've spent over the last 21 years, but moving on. That's a 3.99% gain per year for 21 years. More than half of that has been eaten by inflation - 69k in 1996 is 122 today to stand still (so it's a real gain of 35k). And, you bought it with tax paid money. So it cost 29% more if charged at basic rate self employed. That's really 89k. A real gain of 15k? And the gain has presumably been subject to capital gains tax, at a rate of 18 or possibly 28%. Some of that will be a tax of the inflation part, which is horrendous when you think about it.

The winning part is the income. Not sure what figure your 9% arrived from, but if youre a basic rate tax payer, again, make that 6%. Still good. Is that net of running costs like rates, insurance etc?

With a self invest pension, it's tax free going in, and the gains are tax free. It will be taxed at a time of your life when you would naturally expect to have less income than you do now, so probably a lower effective tax rate overall than if taxed today. But I fully agree that the big risk is government policy change. Probably best to split saving for retirement into several streams to spread risk.

The only other money i spent was the cost of a couple of winows I changed when i bought it and included in the 69. All the other figures affect any other investment too. I sold it to a step son and his partner as they now have a child, on the open market i would have got more , we have used the money to buy a family holiday flat as between us we now have five kids and so far five grandkids . I couldnt have done that so easily with my pension, the painful part will be next jan when i have to pay some CG tax

 

[Robw54]

The only other money i spent was the cost of a couple of winows I changed when i bought it and included in the 69. All the other figures affect any other investment too. I sold it to a step son and his partner as they now have a child, on the open market i would have got more , we have used the money to buy a family holiday flat as between us we now have five kids and so far five grandkids . I couldnt have done that so easily with my pension, the painful part will be next jan when i have to pay some CG tax

Private pensions was dodgy back in 96 and the rules was different so can't fault u retrospectively and houses done well. CGT rules was also different back then.

 

[Rowland]

The only other money i spent was the cost of a couple of winows I changed when i bought it and included in the 69. All the other figures affect any other investment too. I sold it to a step son and his partner as they now have a child, on the open market i would have got more , we have used the money to buy a family holiday flat as between us we now have five kids and so far five grandkids . I couldnt have done that so easily with my pension, the painful part will be next jan when i have to pay some CG tax

I know this is probably to late for you but when selling a a property the more names on the title the more CG tax allowances you can claim , 11k each I think.
Some solicitors say you can't do this but you can mine has done it several times.
Edit- they maybe do not know how to do it

 

[Wombat]

Im sure there are good pensions out there, but personally I see pensions being the next big scandal in 15-20 years time when all the people that have been forced to start workplace pensions in the last 2 years or so realise the returns are rubbish!

Scandal in the next 2 years they've been one for years. look at the collapses of a couple of private funds that were supposed to be safe

Dads was supposed to pay sum at 60, at 70 it's still not worth that amount. Gordon browns raid plus the fact a lot of these companies were strokers means a lot of people have lost loads

I still have a pension, I just hope it's worth something in 30yrs

 

[farmerdan7618]

Back to the OP, plenty of ways to reduce tax, best one for you depends on circumstances and aims - a few for income tax would be: Farmers averaging, Business structure (incorporation, changes in partnership etc), Remuneration planning, pension contributions (SIPP/SSAS), Trusts, EIS if you have the cash. Gifts only really helpful for IHT, again business structure can help with this. CGT mitigation all based on what the aims are for the cash.

Most important thing is to get specific advice based on your business circumstances as everyone has different aims.