The morality of avoiding tax

...and there is the rub. He is saving tax by paying a lower price in a foreign land. it is all within the rules. Because it is legal, there is no need for him to make a moral judgement!!!!!!!!

Hallelujah

 

I already made one. I don't agree that anything in the law is exempt from moral judgement.

 

he is paying tax in full and there are also limits.

 

Yes, he is paying the tax in another Country, similar concept to an investor moving his investments into an Trust overseas and paying the local tax.

Glad you agree with me anyway, although you have actually gone even further than me as I believe morals may still come into some decisions.

 

Why do you think there are limits?

 

Stop trying to wind him up.

 

I can assure you he's not Kieran. I'm just waiting for that last piece of rope that will hang him.
No fair minded person can defend unfettered greed for that long, it always unravels eventually.

 

Yes, you have, but the reason for me homing in on this is because for a business to defer to 000's of subjective moral judgements every tax year, with the background of their legal obligations to their shareholders, is hardly practical. Far easier if they stick with the requirements of the Law.

I do fundamentally disagree with you on the scenarios. I believe that every good business has a duty to employ a good accountant to do the tax planning and every family man should do his best to protect his family in the event of his death (and whilst he is living.)

This is backed up by the fact that this type of planning is absolutely written in to the criteria that a Regulated Financial Adviser (and accountant) must do, when providing a full service to a client. Of he fails to do so, he is potentially negligent.

Your morals, apparently outweigh the wishes of the government, which goes against your earlier posts, but Geijo!

 

:naughty:

 

There are no limits, he can do it as often as he wants.

 

Be careful because some of these financial regulations are made with perfect intent but get abused in their interpretation. Once one is successfully breeched a snowball follows as others then take their lead. This does not shift the moral boundaries one inch but only the legal ones.

 

Clearly then it is intentional and becomes immoral, do you really expect me to defend that?
But there are indeed set limits for a single trip, I want you to explain why they have been put there?

 

But as you have already said, we don't need to talk about morals do we, if it is legal!

Another example of tax planning that, for me is perfectly legal and morally correct, is that, for example, if a £600,000 is bought by a couple, then on the event of first death under normal joint ownership, the full ownership goes to the surviving spouse, meaning that the whole £600,000 value could be taxable at 40% on 2nd death, whereas, if a savvy solicitor suggests owning the house under 'tenants in common' then each only owns £300k and a potentially smaller IHT bill.

Perfectly legal and (acceptable in my view) tax planning. I know now that Godfather will agree with me now, but would Hectic?

 

And I don't think that the law for accountants should operate like that. I think tax avoidance should be considered in law to be just as bad as tax evasion. And the G8 is currently working to get the laws in place that would enable a better handle on tax avoidance. So no, I don't agree that my wishes are different to the government's.

Plus the PM (who's party I normally intensely dislike for obvious reasons) is doing a pretty good job when setting up this whole central database of accountability thing. So you know. Fair play.

 

No, you've already defended it once, no need to do it again.

I don't know the answer, but maybe it's to prevent him from selling it on at a profit.

 

No I wouldn't. It's exactly what I was describing, using a law for something other than it's intent (as is clearly the case in the example you've given). Just because it's clever and gets around a tax law that you don't agree with doesn't make it moral.

 

Look again I said nothing of the sort and you really are winding me up with this scenario. Unless the couple do actually lead separate lives this is tax evasion pure and simple, by law.

There's that final piece.

 

Hectic, the Rules that professional advisers actually advice on tax avoidance and tax planning proves beyond all doubt the government want it. If the client says to the Accountant "I am not interested in paying only the due tax, I want to pay more, please" then the accountant would get a signed statement to the fact, covering his backside.

Sorry, on this point, I believe you are totally wrong. Accountants don't go through years of training learning how to mitigate
tax, and not expect to use their knowledge. Same for a Regulated Financial Adviser who would have taken a specific paper called "AF1 Advanced Diploma in Financial Planning - Personal Tax and Trust Planning". The manual is about 3" thick, so it says a lot more than "ignore opportunities to mitigate your clients tax and collect their fees for doing nothing". Can assu you it is almost totally about tax planning to be as financially efficient as possible.

 

Do people have to make moral judgements on every legally made purchase they make?

And you do know but it doesn't suit your argument.

 

Look, you said it, I just repeated it. I even copied it for you. If you slipped up trying to argue your point, just admit that you were wrong and move on, then I can't use your inconsistency against you.

Regarding the couple. You obviously know nothing about this situation, whereas I do. To save yourself looking more daft by making accusations that 000's of couples have committed tax evasion, I suggest you just look up 'Tenants In Common' on Google, and let me know if you still believe I am wrong and 000's of couples and their advising solicitors are facing a spell in prison.

 

And I said that I don't think that should be the case, and the fact that the government is trying to clamp down on tax avoidance proves they don't like it when people avoid tax. If you're seriously suggesting that because people are given training on how to set up trusts for individuals, and then abuse that knowledge to benefit large companies, that the government likes this sort of behavior then you clearly haven't seen the news lately.

I am beginning to see little point in continuing this debate. I've tried a number of times to find some common ground and communicate to think of the best solutions and all you've done is nitpick fine details, like whether your mate can buy a tank of diesel in France without me getting upset.

 

If the government stop accountants providing tax advice, then most will be out of a job as the accounts, certainly at individual level or SME level will be out of a job, as their role could adequately be carried out by a Bookkeeper, or Accounts Clerk, online. As far as I know, the government is not cracking down on the sort of planning I am talking about here.

Yes, I am reaching the same conclusions about carrying on with this discussion.

For a start, you obviously didn't grasp the point of my OP, which may be my fault. The argument needs to be about the nitpicking details, that is why I outlined the scenarios rather than just ask for views on tax avoidance. The difficulty lies with the detail in sorting out this horrendous tax environment we have in the Country. It can't be about idealist, or political dogma, without tackling all the little decisions that occurs within a tax return. It isn't right to make blanket dismissals of tax avoidance, if those making the accusations are also avoiding tax, even on much smaller levels. It is easy to say that you disagree with something if you don't tackle the minutiae of putting your alternatives into practice. Without such discussion and attention to detail, it is just a load of pointless hot air.

 

Ok, I confused it with another situation, legally what you have is fine. However I find nothing showing why the differentiation and until that is clear I can only see this as an ambiguity that needs closing one way or the other. You can not deny that this is tax avoidance but I suggest that unless you know the intentions of lawmaker then you cannot claim the moral high ground.

 

And I already stated my opinion on those kind of details quite clearly. The difference between tax reduction and tax avoidance is that the latter uses laws in a way that they were not intended to be used for, and/or otherwise exploits loopholes that allow them to pay less tax than they ought to. The former is using a law with it's original intent to pay less tax.

Tax evasion is wrong. Tax avoidance is wrong. Tax reduction is fine.

I can't make my point any clearer for you.

 

Well you certainly can't, as two minutes ago you thought they were breaking the Law. Whereas, at least, I have vast experience in this area.

 

We all make mistakes and I defer to your greater legal knowledge but please explain why you think tax avoidance in this scenario to be morally acceptable and in others not?

 

They're only reacting to public outrage. They wouldn't utter a word if some practices hadn't come to light. One complaint that's levelled at government and the Big 4 is it's too cosy, there's too many crossovers between gov. projects and private business. This muddies the waters and forces those in charge to turn a blind eye if you like.

 

No those wide sweeping statements are quite clear. What "tax avoidance" is obviously not clear, because you can't understand what the government wants in every situation, although you seem to think you do.

It's a pity you don't head the government, as you would just stand up in parliament and say. I don't like "tax avoidance" and the next day, everything would be sorted as you don't think you need to say any more. Simples.

I think we have just about reached the limit of any intelligent discussion now, so I'm signing off in a few minutes.

 

Play nice zz

It's not always clear what the current government wants, but it is usually very clear what the original intention of a law was as we tend to keep quite good historical records in this country.

My solution would not be to just say "I don't like tax avoidance" but to implement a law that would require a database of who was responsible for tax returns (which is currently being set up) and to hold those people accountable if they are considered under the legal definition of a "reasonable person's" judgement to have abused a law from its original intent

 

Firstly, that house is likely to have been purchased by using money that has already been taxed, probably over 75% (including IHT at 40%) for a higher rate taxpayer and more including stamp duty, so I don't think any more tax should be paid on it, but it should be left for my family, if I wished, as it is my family who have had to put up with me working 60 hours a week to earn the money in the first place.

Secondly, the law is there, it is allowed, it has been there for years and could easily be closed by the government, for new buyers, if they wanted to.

 

Cop out! just as your immorality starts shining at it's brightest you decide to quit the scene!

 

All selfish reasons and not one questioning the law itself ... I rest my case.

 

The original idea behind IHT, or "death duties" was to fund the Boer War, what relevance has that got today? Trust law has developed over century's. The government can change things if they want, except where there is an International dimension, out of their control, hence the latest G8 initiative. If they didn't want Accountants to give tax planning, then they could easily stop it. We cannot be certain as to the Governments intentions, particularly as they change on a regular basis, you are right, so that is why we should not try and 2nd guess them, and just go by the Law, which is documented or firmly entrenched in Common Law.

It is you that is hiding behind false arguments now.

Regarding your new Law, to subject each accounting decision to a potential test in Law as to it's "reasonableness" is totally unpractical. Whilst i understand your argument about "intent" but in my opinion, black and white is best, so that decisions can be made with certainty by professionals. One positive about your suggestion though, is that you could probably solve the unemployment problem overnight as you would need to open up many new Court facilities to handle all the potential disputes.

 

You can rest what ever you like. You may not care about leaving your family financially secure, but I do.

Presumably, you'll just hand over 75% of your income, voluntarily, and live on bread, water and dripping and send your kids out to work when they are 16 to make up for what you can't be bothered to provide them with. Every night, instead of watching the TV that you can't afford now, you can sit on the floorboards and polish your halo!

 

Did I not already say? ... A deposit for my daughter's first house, her higher education covered and a battered VW for her first car. The rest she can earn herself. Whatever else I leave goes to the state ... I will not miss it, I will be dead.