REFERENDUM RESULTS AND DISCUSSION THREAD

[Paddingtonwolf]

You pay income tax at the time of exercise on all Executive Share Options bar the first £30000 in value which are classed as Inland Revenue approved. If you sell shares from an Approved Option you are liable for CGT.

Hope that helps

 

[nimrod]

I don't agree with that at all. If you think that you get the same investment or will increase investment without giving incentives then I think you do not understand investors and small companies (I have experience of investors that will not invest without EIS/ SEIS given at time of the pitch). What evidence do you have that it would increase investment?

I would like to think I have a pretty good understanding of this from a company's (I own) point of view as I've done both SEIS and EIS rounds of funding for separate investors both pre and post revenue.

Edit: My whole point at the start of this tis that nothing has really changed in the decade or so this scheme has been introduced, this isn't because of Brexit.

the thread had moved onto various tax burdens and who bears the most. it seemed to me relevant to show the sort of schemes the city invest in that provide them with major opportunities to reduce their tax burden. it's also about best use of taxpayers' money - underwriting rich investors' losses at over 60p in the £ is not a great choice imo.

and I didn't say you shouldn't provide investment incentives did I? I said imo it was skewed too much in favour of the investor. I also didn't say investment would increase, I said "better" meaning the investment that is made would go to higher quality opps. I also suggested that investment support could come direct from government via alternative schemes that may not require business owners giving up to half their company away. perhaps if you're not sure what I mean you could ask without jumping to conclusions or simply making stuff up?

just to repeat the investor essentially gets full tax relief on his investment, no CGT on any gain (which you claimed wasn't the case), and if the investment goes kaput loss relief on top. Plus the various other incentives - CGT deferral, inheritance tax benefits. i'd expect if these were reduced or removed in part investment would drop away in accordance with the risk profile. that would mean the better investment opps would still get picked, the riskier ones may not, there'd probably be greater tax receipts to the state as investors invest less but also a lower need for the taxpayer to compensate investors for failed investment.

 

[nimrod]

3 years is an eternity for a start up and will be the point of highest risk. If still going after 3-5 years then there will either be follow-on capital injection, refinancing or buying of some sort that will be the safest point to sell. All of my investors want to sell companies in their portfolio in this period as it maximses investment. I am sure you know that.

yes the first 3 years is the highest risk period but, as you say, it's hardly going to be its most profitable period and so an investor isn't missing out on much by holding onto the investment in that three year period. so from an investment return perspective, 3 years is not a long period.

 

[So Long Architect]

Is anyone else getting turned on by all this filthy investment talk?

 

[MARKakaJIM]

Is anyone else getting turned off by all this filthy investment talk?

Sure am.

 

[Johnny75]

the thread had moved onto various tax burdens and who bears the most. it seemed to me relevant to show the sort of schemes the city invest in that provide them with major opportunities to reduce their tax burden. it's also about best use of taxpayers' money - underwriting rich investors' losses at over 60p in the £ is not a great choice imo.

and I didn't say you shouldn't provide investment incentives did I? I said imo it was skewed too much in favour of the investor. I also didn't say investment would increase, I said "better" meaning the investment that is made would go to higher quality opps. I also suggested that investment support could come direct from government via alternative schemes that may not require business owners giving up to half their company away. perhaps if you're not sure what I mean you could ask without jumping to conclusions or simply making stuff up?

just to repeat the investor essentially gets full tax relief on his investment, no CGT on any gain (which you claimed wasn't the case), and if the investment goes kaput loss relief on top. Plus the various other incentives - CGT deferral, inheritance tax benefits. i'd expect if these were reduced or removed in part investment would drop away in accordance with the risk profile. that would mean the better investment opps would still get picked, the riskier ones may not, there'd probably be greater tax receipts to the state as investors invest less but also a lower need for the taxpayer to compensate investors for failed investment.

Still can't agree with any of your reasoning at all. If a risky investment works and makes more tax and creates more employment how is this a bad thing? So what if some folks get tax relief, there will be more people employed and a wealth generating company (in theory), that tax relief will surely be offset by new tax recipients generated. Even if 1 in 5 succeed (national average) and are worth 10 times their initial seed money (again national average) after 5 years the tax made by that successful company will outweigh any investment tax break.

According to what you have written that investment wouldn't have got there so all the other knock on effects wouldn't happen and can you explain to me that if an investor invests less there would be greater tax receipts?

And I'm not sure where you have the idea of the rich people getting fat on these investments or businesses giving up half their shares up come from, is it just speculation on your part?

And finally, there are government schemes and investment vehicles. There are 2 companies in the midlands which are highly successful and manager several funds for the government, they are non-profit making too.

 

[nimrod]

Still can't agree with any of your reasoning at all. If a risky investment works and makes more tax and creates more employment how is this a bad thing? So what if some folks get tax relief, there will be more people employed and a wealth generating company (in theory), that tax relief will surely be offset by new tax recipients generated. Even if 1 in 5 succeed (national average) and are worth 10 times their initial seed money (again national average) after 5 years the tax made by that successful company will outweigh any investment tax break. By that reckoning, why not give them 90% or even 100% tax relief? it's a question of degree isn't it, and to me asking taxpayers to take greater than half the risk of someone else's investment for no upside is wrong.

According to what you have written that investment wouldn't have got there so all the other knock on effects wouldn't happen and can you explain to me that if an investor invests less there would be greater tax receipts? if an investor invests less, he gets less tax relief doesn't he. so individually he pays more tax

And I'm not sure where you have the idea of the rich people getting fat on these investments or businesses giving up half their shares up come from, is it just speculation on your part? an EIS vehicle can't be controlled by another company. So if initial ownership is via a single company it has to lose control. hence "up to half the company" to cover that scenario. I did say "up to" didn't I?

And finally, there are government schemes and investment vehicles. There are 2 companies in the midlands which are highly successful and manager several funds for the government, they are non-profit making too. Great, still no ownership upside there for the taxpayer

don't mind you disagreeing johnny. still prefer you do it without misconstruing what I've put.

my view is still that the structure of these schemes, particularly wrt risk, means the emphasis is on tax avoidance ahead of sound investment.

 

[Johnny75]

And I'm not sure where you have the idea of the rich people getting fat on these investments or businesses giving up half their shares up come from, is it just speculation on your part? an EIS vehicle can't be controlled by another company. So if initial ownership is via a single company it has to lose control. hence "up to half the company" to cover that scenario. I did say "up to" didn't I?

And finally, there are government schemes and investment vehicles. There are 2 companies in the midlands which are highly successful and manager several funds for the government, they are non-profit making too. Great, still no ownership upside there for the taxpayer.

EIS applies to individuals only, it cannot be part of a company as far as I am aware. Companies apply for EIS status for their shareholders, particular class of share or funding round and are controlled by HMRC. Although I am not sure what your point is regarding that sentence, there are plenty of companies that give up over half of their shares to investment groups/ people/ VC's and EIS can still apply to individual investors.

Your last point, of course there is an upside to the taxpayer, there has to be a person/ company to manage the fund and they will assess risk, any success stories (which they try and get to 25% of their portfolio) will provide money to the companies managing them and in doing so any profits will go straight to the government after management fees, hence not for profit. Seems like a win win to me.

 

[nimrod]

EIS applies to individuals only, it cannot be part of a company as far as I am aware. Companies apply for EIS status for their shareholders, particular class of share or funding round and are controlled by HMRC. Although I am not sure what your point is regarding that sentence, there are plenty of companies that give up over half of their shares to investment groups/ people/ VC's and EIS can still apply to individual investors.

Your last point, of course there is an upside to the taxpayer, there has to be a person/ company to manage the fund and they will assess risk, any success stories (which they try and get to 25% of their portfolio) will provide money to the companies managing them and in doing so any profits will go straight to the government after management fees, hence not for profit. Seems like a win win to me.

yes, from an investor side (it's individuals), but i'm talking about the original owner. so a company owned by another can be an EIS vehicle, provided it isn't "controlled".

the second point depends what you mean by "not for profit". what you're describing sounds like profit being returned to government, which in principle i'd have no problem with. the concern i'd have is where benefits are provided on a discount/non-commercial basis effectively from the taxpayer no different from concern i'd have if it were shareholders who own a company. as you know from past discussion (eg Treasury guarantees for energy projects (Drax, Hinkley)) taxpayers' money is used non-commercially to support all sorts of people/companies, many of whom don't really need it or could afford to pay commercially for it. then when the state can't afford it, services to the taxpayer are then reduced which is the position where the thread was headed - which is why, if people are really concerned about services they should be looking to make sure taxpayers money is used commercially to taxpayers benefit, not non-commercially to give upsides to others whilst underwriting their losses. the EIS scheme, as currently structured, is in my opinion just another example.

 

[FrankMunro-371]

That's a very poor and telling comment frank. Should we only care about ourselves?

Quite sad really if that is your view, I thought better of you.

It is not my view at all. Maybe I worded things wrongly, as I am often perceived to do on here. Criticising the government about poverty is one thing, but unless one has endured that it is wrong to blame the Government for all the ills of society. And frankly I doubt that many on here have suffered poverty. Furthermore, I also find the anti Conservative theme on here a little tiresome. I am probably the only member of the Conservative party on here, and the constant abuse aimed at the Government has in my opinion been a little bit over the top. This forum is not even remotely representative of the opinion of the normal man and woman in the street. If it were, the Labour Party would have won the 2015 election by a landslide.

And despite the opinion of at least one member on here, I am neither a racist or a bigot. I have standards, and I have my beliefs, and I will continue to stand by what I believe in.

 

[leedswolf]

.

 

[Deleted Cyber]

It is not my view at all. Maybe I worded things wrongly, as I am often perceived to do on here. Criticising the government about poverty is one thing, but unless one has endured that it is wrong to blame the Government for all the ills of society. And frankly I doubt that many on here have suffered poverty. Furthermore, I also find the anti Conservative theme on here a little tiresome. I am probably the only member of the Conservative party on here, and the constant abuse aimed at the Government has in my opinion been a little bit over the top. This forum is not even remotely representative of the opinion of the normal man and woman in the street. If it were, the Labour Party would have won the 2015 election by a landslide.

And despite the opinion of at least one member on here, I am neither a racist or a bigot. I have standards, and I have my beliefs, and I will continue to stand by what I believe in.

Just imagine how it would be if you were a card carrying ukip member lol! Centre right minority on here as you know but we try and hold our own!

 

[Tredman]

It is not my view at all. Maybe I worded things wrongly, as I am often perceived to do on here. Criticising the government about poverty is one thing, but unless one has endured that it is wrong to blame the Government for all the ills of society. And frankly I doubt that many on here have suffered poverty. .

That's probably the major difference between labour and Tory - labour was founded to help people.

The idea that you can't help someone, or empathise with people suffering because you haven't suffered the same, is frankly bizarre to me and does make me feel rather jaded about other people in this country. I do think your micro / macro isolationist attitude is in the majority in the country at the moment - which for a country which led the fight against slavery and fascism is particularly sad.

The anti-conservative part of your post does come across as a bit paranoid, personally I would consider voting Tory (as I have said before) if they would be more representative of the general population, rather than representing a subsection of rich privately educated upper classes.

 

[Langers]

Furthermore, I also find the anti Conservative theme on here a little tiresome. I am probably the only member of the Conservative party on here, and the constant abuse aimed at the Government has in my opinion been a little bit over the top. This forum is not even remotely representative of the opinion of the normal man and woman in the street. If it were, the Labour Party would have won the 2015 election by a landslide.

I don't think it's criticism for the sake of criticism, nor do I find that it's criticism JUST because it's the Conservatives. The criticisms are of the policies, mistruths and injustice and the criticism is usually backed up with facts and a bit of basic humanity that there are people out there being royally fucked over by some brutal, unfair decisions taken by the government.

I have never understood party politics and the need to side with a particular political party no matter what their policies. It's not like supporting a football team and I would wager that the majority of posters on TWF don't have an allegiance towards a particular party. That doesn't mean criticism of policies - from both ends of the spectrum - aren't warranted. We've seen poor campaigns from both sides in the referendum and US election.

I agree this forum isn't representative of the general public - and as a regular poster I'm very pleased about that. In the current political climate, the opinion of the man and woman on the street tends to make me bang my head on the desk.

 

[So Long Architect]

Off the top of my head there are at least 6 regular posters who put a right-wing point of view across regularly and several more who lean in that direction. It's hardly a minority of one.
There are a few more lefties (though I don't think many Labour party members, if that's important) and while it's probably not representative of the country I'm not sure that's a reason for people to stop giving their views, or to temper them in some way.

Frank, you're very quick to assert your right to put your views, so you should extend that courtesy to others even if they disagree with you.

And citizens hurling abuse at governments is a very healthy thing surely. The reason it's the Conservatives getting it in the neck on here is because they're in power. If Labour party were in power I'm sure you and the others on the right would be jumping on their every failing, and rightly so. You already do it on the Corbyn thread at a time when Labour offer absolutely no challenge to your side.

 

[Jolemai]

Turkeys vote for Christmas

 

[machin05]

:icon_lol:

 

[machin05]

 

[Deutsch Wolf]

And citizens hurling abuse at governments is a very healthy thing surely. The reason it's the Conservatives getting it in the neck on here is because they're in power. If Labour party were in power I'm sure you and the others on the right would be jumping on their every failing, and rightly so. You already do it on the Corbyn thread at a time when Labour offer absolutely no challenge to your side.

If the Tories (or this iteration of them, at least) weren't so irredeemably awful at being the Government then I wouldn't need to have a go at them all the time.

If they carry on with ideologically driven austerity which has already long since been proven to increase misery and little else then I'll need to keep having a go at them. Or if they're intent on imposing 1950s moral values on the population. Ditto if five months of not having the first clue how to deal with Brexit (which a sizeable rump of their own party has been screaming for over the past 40 years on and off, so someone should have an idea, surely) becomes nine months, a year, two years, longer.

 

[Deleted Cyber]

It is not my view at all. Maybe I worded things wrongly, as I am often perceived to do on here. Criticising the government about poverty is one thing, but unless one has endured that it is wrong to blame the Government for all the ills of society. And frankly I doubt that many on here have suffered poverty. Furthermore, I also find the anti Conservative theme on here a little tiresome. I am probably the only member of the Conservative party on here, and the constant abuse aimed at the Government has in my opinion been a little bit over the top. This forum is not even remotely representative of the opinion of the normal man and woman in the street. If it were, the Labour Party would have won the 2015 election by a landslide.

And despite the opinion of at least one member on here, I am neither a racist or a bigot. I have standards, and I have my beliefs, and I will continue to stand by what I believe in.

Turkeys vote for Christmas

Because turkey is the traditional lunch not curry not chicken not beef. Doing the right thing to maintain a culture and identity despite the cost.

Now I am not saying I believe that word for word, just wanted to put some perspective on the joke