Tax ISAs (and what is 'significant wealth'?)

[Justin Passing]

Touching on my opening post, I find some of the views around this quite interesting. I get the fact if someone can afford to put away £20k each and every year into an ISA, they're in a minority re people that can afford to do this. However a couple of points. Not everyone that puts money in an ISA can afford to do this, many will put in less each year, sometimes significantly so. I also come back to my point re priorities. Again, before anyone starts, of course there are those who can't realistically save. However, for others, they perhaps sacrifice on some things so they can save.

If people do this for x years and build up an ISA value of £100k+, I think it's an interesting concept to refer to them as being significantly wealthy when the ISA amount they hold might be due to years of not doing other things e.g. bigger house, new cars, big holidays etc. That's the bracket I would fall into.

So, if you're prudent and save into these schemes, the think tank is proposing yet another tax.

Standard ISAs aren't really where it's at these days in terms of interest gained, better non ISA routes out there. I'd better not mention Stocks and Shares ISAs, that'll put some on here over the edge

Minority ok, but it's a lot of people - Waaaay down that list of supposedly rich people who pay most tax.
Put it this way - rounding things a bit this is what happened to us, apart fom some other things.
Earning "fairly well", nothing spectacular -
Paid off the mortage early, got another property and carried on investing at the same rate.
Just doing that gives someone two houses, in their 40's. Round here, 3-4 bed houses are now into 7 figures. One would only have had to earn "fairly well" then, to be worth a couple of mill. Is that "significantly wealthy"?


Edit: I'm aware that it is/was something of a postcode lottery. Not so good in some areas.

 

[ajohn]

For Mr Bike here is similar for the USA

Summary of the Latest Federal Income Tax Data

New IRS federal income tax data demonstrates that the U.S. individual income tax continues to be very progressive, borne primarily by the highest income earners.

taxfoundation.org

They have way more tax break points than we do also local sales taxes. Some here have thought that there should be local income tax for some areas. Take B'ham for instance. Loads come hear daily for work and don't pay any B'ham council tax.

 

[Mottie]

You're showing yourself up John by trying to cherry pick to get tendentious impressions.

You're coming across as a hypocritical envious jerk trying to portray a right-on hippy ethic, frankly.

He complains of 'tax dodgers' but refuses to say what his interpretation of 'tax dodging' is. If it's avoidance, he is as guilty as others who use 'avoidance' but just jealous that he cant use avoidance as well as the super rich who he despises.

 

[Justin Passing]

My mate put exactly £1,000,000 from his sale of the MOT station into shares just before the pandemic hit. Invested it through Coutts. Supposedly took the low/medium risk option. In the first year it went down to....£860K! Ok, it finally recovered after the pandemic to just over £1,060,000. but he was pooping himself for a bit!

There was a much-predicted V shaped dip in stocks. I sold a chunk fairly early, but not as early as some, then when it turned up again, got back in. Yes nervous times, but I only listerned to what pundits were saying and did ok. Then held for a while before losing my bottle, sold at about a 18% plus. If I'd stayed longer some would have done better. It's been choppy since.
Motties mate may have bought in the January of '20 or so, and been caught by the covid crash, but should have been back to par by the end of the same year year. After all the waves he's still be up 15% now.

 

[JohnD]

No doubt motorbiking will tell us this is all completely fair.

Well that's odd.

Nobody has come forward and claimed it's fair.

Why's that?

 

[JohnD]

Because it isn't.

 

[Deleted member 18243]

just lilke you do JohnD. You're coming across as a hypocritical envious jerk trying to portray a right-on hippy ethic, frankly.

Everyone's a capitalist in reality, even preachy message board commies.

 

[JohnD]

I'm very pleased that after I pointed out blatantly unfair tax laws, which deliberately favour the better-off and come down hard on ordinary working people, nobody has tried to argue that this is fair.

Instead they have just invented false ad-hominem attacks to try to discredit the facts.

If everybody paid their fair whack, we could reduce the tax rates, and have better public services. What's not to like?

 

[Mottie]

If everybody paid their fair whack, we could reduce the tax rates, and have better public services. What's not to like?

Did you pay what you consider a ‘fair whack' on the dividends from your investments or did you use avoidance to dodge paying anything on them?

 

[ellal]

If everybody paid their fair whack, we could reduce the tax rates, and have better public services. What's not to like?

Sadly what thatcher initiated was a 'me, me, me' society...

The nasty party hates the European social model (and in particular the Scandinavian one), because whilst not perfect it is nowhere near as corrupt as the UK/US model...

And they also hate the stability and the more equal 'market society' that brings about because they prefer the money to stay with the very few...

 

[Mottie]

You on lates today? You better get a move on, those bed pans won’t empty themselves.

 

[ellal]

those bed pans won’t empty themselves.

You'd know old man

 

[JohnD]

If you'd put the max you could in, every year since their inception, you'd have less than 250k .

You are quite ignorant, aren't you?

There are quite a number of ISA millionaires, though I expect some of the older ones will have died.

How the ISA millionaires made their money | Trustnet

News archive including articles on Fund Managers, Fund Selection, Asset Allocation, Absolute Return, Offshore Investments, Tax Shelters, Insurance bonds. How the ISA millionaires made their money | Trustnet

www.trustnet.com

Not as rich as the average Conservative Cabinet Minister, of course, but certainly far more wealthy than the vast majority of the UK population.

Somehow you have forgotten about PEPs (from 1987) and TESSAs (from 1991), which owners were able to migrate into the ISAs that replaced them in 1999.

Worryingly, I see there are still some people with cash ISAs. These too could be migrated into Shares ISAs.

Half the wealth in Britain is owned by the richest 10% of the population. I hear some of them begrudge paying taxes, but luckily for them, our tax system is tilted in their favour. Perhaps it shouldn't be.

Distribution of individual total wealth by characteristic in Great Britain - Office for National Statistics

Individual-level results from the seventh round of the Wealth and Assets Survey covering the period April 2018 to March 2020.

www.ons.gov.uk

 

[Justin Passing]

I'm very pleased that after I pointed out blatantly unfair tax laws, which deliberately favour the better-off and come down hard on ordinary working people, nobody has tried to argue that this is fair.

It's because it's a patently silly claim not worth trying to argue about.. The poorest pay zero tax. Those who earn most, pay most.

 

[JohnD]

It's because it's a patently silly claim not worth trying to argue about.. The poorest pay zero tax. Those who earn most, pay most.

I see you are pretending you didn't read my post, where I showed that taxes bear much heavily on people who earn their living as workers, than those receiving dividends or capital gains.

A very flimsy and unconvincing attempt.