Taxation

Chancellor’s Budget and How It Affects You

What follows is a summary of Chancellor Philip Hammond’s Budget speech today, and the impact of the tax changes. Private investors were particularly concerned about the impact of tax reliefs in the VCT/EIS schemes following the Patient Capital Review but these are in fact relatively minor (see end of document). This is a summary of the key points he announced: The Chancellor said we are on the brink of a technological revolution, we must embrace it. Britain is at the forefront, but ...
Post Date: November 22, 2017 Read more

Confessions of a Tax Avoider

There have been extensive reports in the press about revelations contained in the so-called "Paradise Papers". One of the most intriguing of these has been the accusation of tax avoidance levelled at the Duchy of Lancaster, part of the Queen's private estate. I was therefore interested to read the details contained in this article in the Financial Times... and from it, I learnt that I am a tax avoider too! Before moving on to the specific issue, I will just point out ...
Post Date: November 7, 2017 Read more

Response to Financing Growth Review

The Government is currently consulting on “Financing Growth in Innovative Firms” (otherwise known as the Patient Capital Review). It covers the perceived problems in building world-beating companies from a small size in the UK, and the ways the Government provides support to early stage companies. That typically means the VCT, EIS and SEIS schemes with their associated tax reliefs and other possible “support” programmes where the Government funds them directly. Anyone who invests in this area, directly or indirectly, should respond to ...
Post Date: September 12, 2017 Read more

Expensive Dividends – National Grid and Electra Private Equity

National Grid (NG.) are returning some of the cash received from the sale of their stake in a gas distribution business to shareholders via a large special dividend. And some will be returned via market share buy-backs, the wisdom of which may be questionable. But the real concern for private investors is that dividends are taxed as income even though this is in essence a "return of capital". It is not being paid out of operating profits, but simply from the ...
Post Date: April 28, 2017 Read more

Finance Bill and Tax Changes

Post Date: April 26, 2017 Read more

Double Taxation and Broken Promises

The most recent changes to dividend taxation in the Chancellors Spring Budget are a major attack on private investors. The simple change to reduce the Dividend Tax Allowance from £5,000 to £2,000 only a year after it was introduced will have a big impact on the tax paid by many investors. It's also another example of a broken promise about "no increases in taxes" made in the Conservative manifesto. The Chancellor, Philip Hammond, has already had to back-track on the increases to ...
Post Date: March 20, 2017 Read more

It’s a Budget – But Not As We Know It

The Chancellor, Philip Hammond, delivered his Spring budget yesterday. But as most of the big changes have been moved to the Autumn, this was a "steady as you go" statement in essence. However there were some significant changes for private investors. The biggest is that the tax free allowance on dividends has been reduced from £5,000 to £2,000. So if you rely on dividend income, say in retirement, this will cost you substantially more - over £1,000 extra in tax in some ...
Post Date: March 9, 2017 Read more

AIC Press Release on VCTs

To follow on from my last blog post, another interesting press release from the AIC today was that on the performance of Venture Capital Trusts (VCTs). That's particularly so when everyone is considering their tax bills at this time of year, i.e. those just paid and how they can avoid such big ones for the current year and next. VCTs do of course offer upfront income tax relief when investing in new shares, and also tax free dividends thereafter. Many have been ...
Post Date: February 28, 2017 Read more

Brexit, Industrial Strategy and Productivity

What next now that we are committed to Brexit? Well first we need an "industrial strategy" to help us develop a new place in the world and possibly to pay for the up to £60 billion that might be demanded by the EU (as settlement for outstanding commitments if you believe that - yes divorce can be expensive). Now it just so happens that the Government has just published a Green Paper entitled "Building our Industrial Strategy" on that topic which ...
Post Date: February 2, 2017 Read more

Losses From Withholding Taxes on Dividends

An issue that has come to the notice of ShareSoc is the problem of the Withholding Tax introduced on dividends in South Africa. Even though Pan African Resources Plc (PAF) is registered in the UK, it is dual listed on AIM and the Johannesburg Exchange (JSE). Because of the way South Africa introduced the tax change, any shareholder is going to get 15% deducted before payment (or 10% for UK residents under a dual tax treaty). To get the lower rate, you ...
Post Date: January 9, 2017 Read more