@motorbiking
He's a prosperous citizen who thinks people in this country should be taxed fairly.
Glad I was able to help you.
Fair tax: Maybe rich people should pay it too."
- Thread starter JohnD
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@motorbiking
He's a prosperous citizen who thinks people in this country should be taxed fairly.
Glad I was able to help you.
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acknowledging my edit while you replied: But do you understand Carried Interest? its all about startups.
In the cases I mentioned at the start of this thread, it's all about tax-dodging.
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So you have no clue thought as much - moment you are challenged you go running to the hills as usual with all dolts.
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You mean the tax loophole for PE boys?
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Is it A) a loop hole or B) tax dogde or C a documented tax treatment introduced during the last labour government?
If you need a hint:
https://www.gov.uk/hmrc-internal-manuals/investment-funds/ifm36540
@SirGalahad - yes - JohnD started a thread how Growth on investments from PE should be taxed.
For those who don't understand how it works...
Entrepreneur has and idea and starts a business. He/She/they/them need to grow fast and build the business. They take the idea to a VC company who funds in exchange for shares. As the company grows different VCs and PEs join and leave the party according to their investment strategy. The Deal maker - whose job it is to help the Entrepreneur find his money, charges a fee. As startups are often short of money, this can be in the form of equity. This also applies to the leadership team of the company and any early employees who bring value. it's no different to employee share purchase programmes. During the growth and funding stages (e.g. pre IPO), the company will be "bought" and "sold" according to valuations. Those in the scheme get a nice drink out of it, for their hard work in growing the company. Often this is in exchange for taking less salary.
These drinks are taxed as capital gains. Some people (presumably those who have never been invited to such a scheme) don't like it.
If the business fails, those in the scheme get nothing, they often get fired. Who would want a job like that unless the upside was worth it. This is not a role for retired teachers, train drivers, Fintech tape monkeys or others with no ability to add value.
I wonder if the additional labour fan boys with links to the ecotricity boss, submitted public tenders before partnering with the firm. or maybe they just went with their mate.
If you need a hint:
https://www.gov.uk/hmrc-internal-manuals/investment-funds/ifm36540
if you or the multi-millionaire labour fan boy have evidence of tax evasion, I'm sure HMRC would act and not need to be "prosecuted" or whatever the plan is.
@SirGalahad - yes - JohnD started a thread how Growth on investments from PE should be taxed.
For those who don't understand how it works...
Entrepreneur has and idea and starts a business. He/She/they/them need to grow fast and build the business. They take the idea to a VC company who funds in exchange for shares. As the company grows different VCs and PEs join and leave the party according to their investment strategy. The Deal maker - whose job it is to help the Entrepreneur find his money, charges a fee. As startups are often short of money, this can be in the form of equity. This also applies to the leadership team of the company and any early employees who bring value. it's no different to employee share purchase programmes. During the growth and funding stages (e.g. pre IPO), the company will be "bought" and "sold" according to valuations. Those in the scheme get a nice drink out of it, for their hard work in growing the company. Often this is in exchange for taking less salary.
These drinks are taxed as capital gains. Some people (presumably those who have never been invited to such a scheme) don't like it.
If the business fails, those in the scheme get nothing, they often get fired. Who would want a job like that unless the upside was worth it. This is not a role for retired teachers, train drivers, Fintech tape monkeys or others with no ability to add value.
I wonder if the additional labour fan boys with links to the ecotricity boss, submitted public tenders before partnering with the firm. or maybe they just went with their mate.
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The whole basis of your argument is that their gains should be taxed as capital and not income does not stand based on them taking on risk - their reward being a capital return - how much of their own money are they risking?
Where is the risk - it's not their capital thats being risked - they take a cut of the profits but not the losses - the investors in the funds do.
They should be taxed as income and not capital gains.
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Carried interest - the £600m loophole that doesn’t actually exist
Private equity fund managers pay only 28% tax on their income – the “carried interest loophole”. This wasn’t created by legislation, but by an impressive piece of lobbying in 1987 which resulted in an…
www.taxpolicy.org.uk
What’s the loophole?
When I was an overpaid lawyer, I paid 47% on most of my income. Overpaid bankers pay about 53%5. But overpaid private equity fund managers only pay 28%. One of the pioneers of the UK private equity industry famously said that he paid less tax than his cleaning lady.6
Why? Because the private equity industry claims that carried interest in a typical private equity fund is taxed as capital, not as income. And whilst income is taxed at a marginal rate of 47%, capital gains are taxed at only 28%7.
The loophole8 is worth around £600m a year to private equity fund managers.9
Why would Parliament create such a loophole?
It didn’t.
Most loopholes are created when Parliament accidentally leaves a small chink in tax legislation that a careful taxpayer can carefully squeeze through. This one is different – it was created by an impressive lobbying effort by the private equity industry back in 1987. The industry said that if it didn’t get the low tax result it wanted, then it would move offshore. And the Government blinked.
SVG chairman breaks tax taboo
www.ft.com
Nicholas Ferguson, one of the most prominent figures in Europe’s private equity industry, has broken the sector’s taboo on tax by criticising the fact that top buy-out executives “pay less tax than a cleaning lady.”
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No, I quoted examples. What's the matter with you? You so utterly brainless that you can't read?
You really are just a simple troll aren't you.
Go away and play with yourself.
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Suggest you go ask the people who made it that way and the many who haven't changed it, and stop making a dick of yourself.Carried interest - the £600m loophole that doesn’t actually exist
Private equity fund managers pay only 28% tax on their income – the “carried interest loophole”. This wasn’t created by legislation, but by an impressive piece of lobbying in 1987 which resulted in an…
What’s the loophole?
When I was an overpaid lawyer, I paid 47% on most of my income. Overpaid bankers pay about 53%5. But overpaid private equity fund managers only pay 28%. One of the pioneers of the UK private equity industry famously said that he paid less tax than his cleaning lady.6
Why? Because the private equity industry claims that carried interest in a typical private equity fund is taxed as capital, not as income. And whilst income is taxed at a marginal rate of 47%, capital gains are taxed at only 28%7.
The loophole8 is worth around £600m a year to private equity fund managers.9
Why would Parliament create such a loophole?
It didn’t.
Most loopholes are created when Parliament accidentally leaves a small chink in tax legislation that a careful taxpayer can carefully squeeze through. This one is different – it was created by an impressive lobbying effort by the private equity industry back in 1987. The industry said that if it didn’t get the low tax result it wanted, then it would move offshore. And the Government blinked.
SVG chairman breaks tax taboo
Nicholas Ferguson, one of the most prominent figures in Europe’s private equity industry, has broken the sector’s taboo on tax by criticising the fact that top buy-out executives “pay less tax than a cleaning lady.”
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What examples - you quoted what - nominal rates?
You seem to confuse yourself with this corker. That makes as much sense as your arguments which chop and change.
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This is just opinion. The author is some bloke who studied physics and uni, did 2 or 3 years legal training and worked his way up to "partner" before "retiring". Why is it ok for him to make his wealth from it, but as soon as he's out of the loop, we should listen to his ranting about the "system". His non-profit company has been going for about a year and he is mostly a labour lobyist.Carried interest - the £600m loophole that doesn’t actually exist
Private equity fund managers pay only 28% tax on their income – the “carried interest loophole”. This wasn’t created by legislation, but by an impressive piece of lobbying in 1987 which resulted in an…
What’s the loophole?
When I was an overpaid lawyer, I paid 47% on most of my income. Overpaid bankers pay about 53%5. But overpaid private equity fund managers only pay 28%. One of the pioneers of the UK private equity industry famously said that he paid less tax than his cleaning lady.6
Why? Because the private equity industry claims that carried interest in a typical private equity fund is taxed as capital, not as income. And whilst income is taxed at a marginal rate of 47%, capital gains are taxed at only 28%7.
The loophole8 is worth around £600m a year to private equity fund managers.9
Why would Parliament create such a loophole?
It didn’t.
Most loopholes are created when Parliament accidentally leaves a small chink in tax legislation that a careful taxpayer can carefully squeeze through. This one is different – it was created by an impressive lobbying effort by the private equity industry back in 1987. The industry said that if it didn’t get the low tax result it wanted, then it would move offshore. And the Government blinked.
SVG chairman breaks tax taboo
Nicholas Ferguson, one of the most prominent figures in Europe’s private equity industry, has broken the sector’s taboo on tax by criticising the fact that top buy-out executives “pay less tax than a cleaning lady.”
Sounds like a disgruntled employee.
Can you find something credible?
You are trying to argue that people should not be allowed to generate wealth from capital. They invest their time and expertise and in return they get a share of the company. What is wrong with that?
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I do like how you make things up - I said tax them as income - point out where I said people should not be allowed to generate wealth from capital?
Go on - as a lawyer you should be able to.
An employee invests their time and expertise - so that argument of yours is weak as p iss and you know it.
You are scrambling as usual.
If it is just opinion can you find something credible yourself with evidence that taxing them as CGT is better for the economy.
Go on - bring forward the research.
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I provided you with the HMRC Guide - its very clear on the rules.
It's not Income is it. Its growth on capital. So it should be taxed as capital gain.
The value isn't revenue, profit etc.. it's often the value of their Intellectual property.
Imagine I had an idea for a FinTech start-up and I needed a IT developer to write the software. So I contacted you and said: I have this business start-up, but I can't pay you a salary as we don't have any customers yet, but I will give you equity in the company. We agree 10% and the nominal value of your equity is £1,000, which I lend you to buy the stock.
So you do the work, are not an employee, invest your valuable time - because you have a stake in the company. Then my company grows in value because you turned my IP in to software and added value. I decide to invite a PE company onboard to help me grow. They want 50% and will give £1M, so my company is now worth £2M. You decide you want out, so you cash in your equity. You now have £199k Capital gain.
what is so complex? - you took a risk that it would be a complete waste of your time. You might have spent many hours/days/months writing software that went in the bin and you'd have got nothing.
or you can get a job changing the tapes and watching the backups run in the private cloud and earn £40k per year, safe in the knowledge that you will be paid.
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