In the news

Presumably this is just a result of "fund managers get paid in carried interest" and loads of them live there?

Yep, I think it’s 9K. We just had to pay it after selling a house in the UK after moving abroad.

Pissed that I even have to give that scumbag government money when I haven’t lived or worked there in 5 years.

Capital gains allowance is £6k per person per year.

To @Howard 's question, HMRC deduct the allowance, you have to report irrespective of whether you have to pay it.

I've become quite expert on this recently, which has come as a big surprise to me.

Dropping to £3k in April.

Yes, correct. Which is good I think, we should be taxing capital gains as much, if not more than, income.

Found this interesting from Dan Neidle on where the Capital Gains for CGT are coming from. (The "other financial assets" are probably mostly fund holdings (held outside pensions and ISAs))

Good to know the tens of billions we are spending on a nuclear deterrent is worth it.

the missile simply splashed into the ocean: “It left the submarine but it just went plop, right next to them.”

This was the second test in a row that failed. The last one was in 2016, so they had a bit of time to work out the issue and get it right.

Also

Grant Shapps was present at the time the test took place.

https://www.theguardian.com/uk-news/2024/feb/21/labour-seeks-trident-assurances-after-missile-test-anomaly

I think sea launched missile failure is far more common than you’d think. My father launched a Polaris one fifty years ago and it went off course and had to be self-destructed. Apparently that wasn’t unusual.

so they had a bit of time to work out the issue and get it right.

In 2016, a missile that had been fired had to be destroyed after going off course.

Different issue I assume

Imo the allowance level was fine.

The issue is the %.

We have carve outs for pensions to cover people when they need to live off unearned income, so I'm not sure why we incentivise capital over working.

As Laura Trott says, there is a duty to work.

I think it's a certain that a labour government will up the CGT percentage to nearer 40%. I hear what @andyp is saying but my wife gets a chunk of her salary as share options for which she'll pay income tax and then CGT on top which is a bit of a kicker when that lump sum is earmarked to live off.

pay income tax and then CGT on top

Isn't the CGT only due on any increase in value over the purchase price (as set by the option), with income tax due on any beneficial pricing of the option? That doesn't sound that different to any other investment scenario where CGT would be due.

Of course, I may be wrong 🤷🏻‍♂️ #IANATA

That is probably right - the cgt on top shouldn't be a kicker so much as "better than the alternative" which would be having income tax on the receipt...

You're correct, they vest for three years and then we can sell if the share price has risen and pay the IT and CGT. But I still think it's rough, maybe I'm turning into a fucking tory. First world problems etc

Hasn't Rachel Reeves recently said they're not doing that?

Does she work in banking? Because that model was brought in to realign bonuses to longer term performance.

Either way, I appreciate that it impacts your household, but fundamentally that payment structure is designed to tie your interests to the organisation's. If the price tanks you also loose. If the base pay is below market rate and the org uses the shares to balance it out, then that doesn't seem right.

CGT is payable on any gains from the date they vest, so if she sells the shares on the day they vest, assuming there is no quiet period, then CGT will be avoided. If you hold onto shares after they vest, then you can be liable for CGT, assuming the selling price is higher than the vesting price.

She can also transfer shares to you, so that you can use your CGT allowance too.

I had missed that, but still, trust a politicians word? :)

@hugo7. She works for TJX (TK Maxx) and tbh it's not (cough) her only bonus but the only one subject to CGT. The pandemic was weird because they all fell short of performance targets as the shops were shut but the share price has risen significantly because other retailers are jettisoning stock which is great for their business model. And so we became more dependant on the share options.

@andyp. Interesting stuff, thank you. I had no idea the time of vesting influences the tax position. Time for another trip to the accountant.

It can get very complicated depending on the vesting schedule, i.e. if you get quarterly vests then HMRC will use an average to calculate CGT rather than the actual price at vest, as you can’t sell specific shares based on when they vested. My employer IPO’d in September and I’ve had two vesting events but can’t sell the shares yet due to a 180 day blackout period. The second tranche vested at a price that was almost three times the first vest, so the CGT calculation is almost impossible to calculate.

now you're all just showing off

Make them pay NI on it at least

https://amp.theguardian.com/business/2024/feb/20/uk-middle-classes-jobs-housing-costs-abrdn-financial-fairness-trust

Britain’s insecure jobs market and high housing costs are leading to the growth of a precarious middle class struggling to maintain a decent living standard on household incomes as high as £60,000 a year, a report has said.

A study released by abrdn Financial Fairness Trust, a research body set up by the fund manager, said the uncertain nature of work meant there was a one in three chance that someone earning a middle income today would not be doing so next year.

The report – Caught in the Middle – said that problems of middle-class insecurity were especially acute for single parents, with those in employment more likely than not to be in an insecure job.

Bank of England ‘risks worsening UK recession if no interest rate cuts soon’
Donald Hirsch, a policy adviser at the FFT and one of the report’s authors, said 20% of those in the middle fifth of the income distribution were struggling to pay for food and other essentials. “It is people earning between £30,000-£60,000 a year, depending on the type of household, people who you would expect to be doing OK,” he said.

Think this is probably more a London and South East problem

Household income of £60k is just two people on £30k each. If you have kids and are renting you're fucked on that.

😭