Labour intentions for pensions

[Lootman]

No change to the rules regards losses on the tax return for Gilts. Heads the. GOV win, tails you lose.

Anything is possible, but unlike, eg the US, gambling profits are tax-free in the UK on the basis that if they were taxable then losses would be tax-deductible. As far as I'm aware not even the most radical of Labour governments have sought to change this principle so I'm not sure why you think a centrist like Starmer would.

I thought that you can no longer deduct gambling losses on a US tax return? That went away with the Reagan tax simplification changes, along with deducting sales taxes.

If so then isn't that an example of gains being taxed and losses being disallowed?

The problem with taxing gains on gilts is that returns are pre-determined if held to maturity. So right now people can change taxable income into tax-free capital gains, because low-coupon gilts trade below par. If losses were allowed then instead people would be buying up all the high-coupon issues trading above par.

[SoBo65]

I plan to fully retire next year, this is what I have done.

1. I took my TFLS 4 years ago (as had Fixed Protection under the old LTA).
2. Made additional contributions to my wife’s SIPP.
3. Maxed out both our ISA’s.
4. Bought low coupon GILT’s maturing in each of the next five years to provide the bulk of our living costs (and some) as CGT tax free.
5. Will take £12.5k pa from each of our SIPPS (potentially a bit more, but keep within the basic rate, possibly recycle into ISA’s).
6. Maxed out on Premium Bonds.

What does concern me is ISA’s think it is likely the annual limit will reduce to say £10k, with perhaps a cap with exception for those already above it (but no further subscriptions).

Likely IHT free pensions will go and further reduction in TFLS with perhaps a higher LTA than was latterly in place.

[TedSwippet]

I thought that you can no longer deduct gambling losses on a US tax return? That went away with the Reagan tax simplification changes, along with deducting sales taxes.

Topic no. 419, Gambling income and losses | Internal Revenue Service

Gambling losses
You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as "Other Itemized Deductions."

Topic no. 503, Deductible taxes | Internal Revenue Service

State, local, and foreign income taxes or state and local general sales taxes
You may deduct as an itemized deduction, state and local income taxes withheld from your wages during the year (as reported on your Form W-2, Wage and Tax Statement) and estimated state and local income taxes and prior years' state and local income taxes paid during the year. Alternatively, you can elect to deduct state and local general sales taxes.

[Charlottesquare]

We do have compulsory pensions already, Workplace Pensions, 4% employee, 1% tax relief, 3% employer. Catch is they only apply to band earnings so the lower paid get next to nothing. Whilst I would not particularly increase the upper threshold I would gradually keep dropping the lower threshold so that those with say three part time jobs at £6,000 pas each actually had some contributions. I think lower contribution threshold is currently £6,240 pa, reducing this so as to at least apply 8% to total salary would be a start.

They aren't actually compulsory as in the UK you can opt out of workplace pensions and NEST - it is just a hassle to do so as unless you keep opting out they will try to auto-enrol you at fairly regular intervals.

They are of course compulsory for employers to provide.

[LondonChris]

Haven't read the report yet, but Paul Johnson at the IFS has just tweeted "If we keep current excessive tax breaks which allow pension pots to be inherited tax free, tax free lump sums up to £250k, and no employer NI, then yes LTA should come back. Better, though, to sort out current over-generous mess than to apply this complex sticking plaster."

Attached is the IFS report today on pensions inc. the LTA - https://ifs.org.uk/articles/should-pens ... -if-so-how

Happy reading !

[1nvest]

SKS vs Sunkak ITV debate and SKS indicated that in order to avoid increasing NI, VAT ...etc. that Labour would target tax revenues via

Energy firms
Equity loopholes
Non Doms
Private School fees

The latter two are pretty much zero add, revenues from VAT on fees being spent on having more in the public sector education system. Energy firms is just a indirect form of taxation what the firms pay clawed back via higher costs to customers. So suggestive of a £38Bn hole being predominately filled via closing equity loopholes.

[Lootman]

SKS vs Sunkak ITV debate and SKS indicated that in order to avoid increasing NI, VAT ...etc. that Labour would target tax revenues via

Energy firms
Equity loopholes
Non Doms
Private School fees

The latter two are pretty much zero add, revenues from VAT on fees being spent on having more in the public sector education system. Energy firms is just a indirect form of taxation what the firms pay clawed back via higher costs to customers. So suggestive of a £38Bn hole being predominately filled via closing equity loopholes.

Hmm, and what are these "equity loopholes"? ISAs? SIPPs?

Starmer did not say taxes won't go up. He said they won't go up for "working people". Since most Lemons do not meet that definition it would appear that the TLF community has a target on its back.

If the "big three" taxes (NI, VAT and income tax) do not go up a little, then every other tax has to go up a lot. Either that or it is 5 more years of austerity.

[LondonChris]

SKS vs Sunkak ITV debate and SKS indicated that in order to avoid increasing NI, VAT ...etc. that Labour would target tax revenues via

Equity loopholes

Starmer's language was imprecise and vague. Politicians rarely in my experience use the correct terminology when describing or outlining financial / investment / economic proposals. I agree the language sounds scary, but I am guessing he was meaning to say the private equity loophole his party has been referencing over the last year or so - ie the taxation of carried interest which attracts a lower tax rate than the 45% higher IT rate and avoids a further 2% NIC. Just a guess though from me.

[vand]

IWhat does concern me is ISA’s think it is likely the annual limit will reduce to say £10k, with perhaps a cap with exception for those already above it (but no further subscriptions).

Likely IHT free pensions will go and further reduction in TFLS with perhaps a higher LTA than was latterly in place.

Personally I think the rolling back ISA limits tend to be mostly ignored as governments are mostly concerned with raising revenue for the next year, which money going into ISAs has already done. The benefits of capping ISAs won't be felt to the Treasury for many years down the line, by which time the current administration are likely to be gone anyway.

[moorfield]

Or they could introduce a completely new tax to squirm around this, that replaces NI and income tax (which, technically, is still a "temporary" measure).

Let's call it Earnings Tax, for sake of argument.

[1nvest]

Or they could introduce a completely new tax to squirm around this, that replaces NI and income tax (which, technically, is still a "temporary" measure).

Let's call it Earnings Tax, for sake of argument.

Abolish VAT, introduce a 33% "Purchase Tax" and ... told you we wouldn't increase VAT and look, we even did away with it altogether.

No different to the Tory promise of 40 new hospitals where 40 hospitals were given a lick of paint and declared to be as good-as-new.

The electorate after all just a bunch of plebs.

[ADrunkenMarcus]

Starmer did not say taxes won't go up. He said they won't go up for "working people". Since most Lemons do not meet that definition it would appear that the TLF community has a target on its back.

If the "big three" taxes (NI, VAT and income tax) do not go up a little, then every other tax has to go up a lot. Either that or it is 5 more years of austerity.

What’s the definition of ‘working people’?

We have a huge public policy issue in that the population is growing old and fat. If we can’t get the economy growing faster we’re screwed.

Best wishes


Mark

[scrumpyjack]

"What’s the definition of ‘working people’?"

Well certainly not MPs!

Older people were mostly 'working people' in the past and the roads and hospitals we currently have were paid for with the taxes levied on them.
Their income is generally 'deferred pay' from when they were 'working'. This whole attempt to separate 'working people' from everyone else is fundamentally dishonest with a nasty tone of class prejudice thrown in.

[ADrunkenMarcus]

"What’s the definition of ‘working people’?"

Well certainly not MPs!

Older people were mostly 'working people' in the past and the roads and hospitals we currently have were paid for with the taxes levied on them.
Their income is generally 'deferred pay' from when they were 'working'. This whole attempt to separate 'working people' from everyone else is fundamentally dishonest with a nasty tone of class prejudice thrown in.

I tend to agree, but without a precise definition it’s rather hard to discuss it.

People of pensionable age may be working. People of working age might not be. What about a parent of a young child, who is temporarily out of the workforce? Is someone working part time considered as such?

The issue here is that, without a precise definition, we might not be discussing the same thing.

Best wishes


Mark

[ADrunkenMarcus]

With the cooperation of TUC (Labor in Australia needed the same from the equivalent ACTU), they could enact a law mandating compulsory employer pension contributions to large and low cost industry funds, starting at 1.5% and raising at 1.5% per year. This could come from existing defined benefit contributions where they exist and the law allowed (or could be made).

After two terms in office, unfunded retirement would be on its way out - as well as dependence on former employers' solvency for your retirement. You ideally need the TUC (and implicitly, the Labour left) on board though, as noted above, to moderate wage claims whilst this is ramping up. In short, the whole economy would be on a better footing from that point IMO, as long as the "boiling frog" 1.5% increases can be tolerated.

Paul Keating seemed to be pretty farsighted in that respect, planning in the mid 1980s for the demographic bulge that was looming decades ahead. His intention was for superannuation to be mandated to, I think, 15%, which would have created an even larger asset pool than Australia has today. That was something that did not follow after he left office. The current Labor government is overseeing a raise to 12% or so. Had it been 15% for the prior twenty years or so, they would be in a much better position.

There is a lot of shortsightedness in UK policy making.

Best wishes


Mark.

[Kantwebefriends]

"Either that or it is 5 more years of austerity."

Austerity is a myth: there's been no austerity. Every month government runs a deficit and therefore government debt grows every month.

[Tedx]

"Either that or it is 5 more years of austerity."

Austerity is a myth: there's been no austerity. Every month government runs a deficit and therefore government debt grows every month.

For every debt there is an asset. Somewhere.

[Urbandreamer]

"Either that or it is 5 more years of austerity."

Austerity is a myth: there's been no austerity. Every month government runs a deficit and therefore government debt grows every month.

For every debt there is an asset. Somewhere.

Alas that is not true with Fiat currencies and fractional/no reserve banking. Money is created by recording a debt without the asset to cover the debt.
There are even people like Stephanie Kelton who argue that this is how the government should be funded and that taxes are not really necessary for funding.

https://x.com/StephanieKelton/status/17 ... 1565411638
https://en.wikipedia.org/wiki/Stephanie_Kelton
She wrote a book on the subject.

It had the Austrians frothing at the mouth.

[Lootman]

Starmer did not say taxes won't go up. He said they won't go up for "working people". Since most Lemons do not meet that definition it would appear that the TLF community has a target on its back.

If the "big three" taxes (NI, VAT and income tax) do not go up a little, then every other tax has to go up a lot. Either that or it is 5 more years of austerity.

What’s the definition of ‘working people’?

it doesn't matter in the sense that what Starmer is doing here is giving himself cover for future tax increases on interest, dividends, capital gains, ISAs, pensions and wealth. And as long as NICs and income tax do not go up on employment income he can claim to have kept his word.

As Jack notes, the use of that phrase is designed to divide the population into two groups - the "idle" rich and the workers. And that takes you right back to Marxism.

[airbus330]

What’s the definition of ‘working people’?

it doesn't matter in the sense that what Starmer is doing here is giving himself cover for future tax increases on interest, dividends, capital gains, ISAs, pensions and wealth. And as long as NICs and income tax do not go up on employment income he can claim to have kept his word.

As Jack notes, the use of that phrase is designed to divide the population into two groups - the "idle" rich and the workers. And that takes you right back to Marxism.

This article from todays Guardian seems to back you up.
https://www.theguardian.com/business/ar ... c-services