No Future

[GD4ELI]

it may be a question of time before there is a stampede..

 

where are they going to go ?

 

The serious money is heading for Switzerland, now that the 75% rate is being introduced in France house prices are rocketing here.

 

Others are just simply trying to downsize.

 

Speaking with an EA it appears that there are very few UK residents moving to the rock.

[manshimajin]

The serious dubious money is heading for Switzerland, now that the 75% rate is being introduced in France house prices are rocketing here.

 

Others are just simply trying to downsize.

 

Speaking with an EA it appears that there are very few UK residents moving to the rock.

Modified to reflect the history of Swiss banking....

 

Otherwise I'd agree with you - if you are French why come to the IOM? Maybe the CIs would have some attractions too. But a country that speaks your language has some advantages. Mind you in Zurich recently I was struck how dirty it was and how much graffiti there was. No doubt the immigrants not the Swiss (the expat bankers?). I was travelling from Germany so it could be the contrast with there that struck me! It also didn't seem to have the same feeling of economic activity and core wealth as the region of Germany I had been in (Bavaria).

 

I think your last paragraph has been evident for quite some time now. It is a logical outworking, amongst other things, of the difficulty selling up in the UK (particulalry in the areas where people tend to comeover from). The amount of top-end property on the market is a clear signal of this. Why the Dwarf From The North would want to make it easier to build more hacienda homes is not at all clear when there is so much relatively expensive to expensive property available (such as that wonderful bungalow at Santon shown elsewhere.......ermmm maybe I get the reasoning).

 

P.S. GD4ELI what percentage of Swiss GDP is financial services related? I see that over 70% of GDP is from the services sector but I couldn't find the percentage of that which is related to FS.

[pongo]

The serious money is heading for Switzerland, now that the 75% rate is being introduced in France house prices are rocketing here.

 

I am not saying that you are wrong. But has there really been a sufficient passage of time to make that call. Hollande's tax changes were only announced over the past week including yesterday (though granted they were pledged in his manifesto). I should have thought it was early to draw a definite conclusion.

 

Also - the 75% rate only applies to income earned in excess of the €1m. Are so many people really going to be significantly affected ? Will they not already be employing very effective accounting ? ETA: the wealth tax is a different issue. It already existed, is widely avoided already and the changes to that are relatively minor.

 

These tax increases, apart from sending out possibly the wrong message, seem to be a political distraction - because the real issue is that Hollande's govt know that they are going to have a huge battle with the unions in order to implement the cuts which they are going to have to make. Left leaning govts never like to be the ones to have to make cuts - and the effect may very well be to divide the left longer term.

[Lxxx]

increasing government influence in personal affairs....his reply....'We've only just started.'

How about this as a conspiracy theory? They are going to be asking lots more questions about peoples' financial affairs so that Honest Al and Fast Eddie can have a stab at seeing how much they could raise with CGT and/or IHT without "scaring the horses" away. They are determined not to shrink Government and its' activities.

 

I'd get a less rigid form of hat if I were you.

[Lisenchuk]

...how much they could raise with CGT and/or IHT without "scaring the horses" away.

 

I think the horses are already very nervous, it may be a question of time before there is a stampede.

 

I would actually go for IHT and property tax.

Surely thats just an inequitable tax that penalises those who have been financially responsible,and would in any case be avoided through trusts and other schemes by the wealthy.

I could only support taxation increase if it applied fairly,and only after the Govt has got its spending priorities sorted out.

[manshimajin]

I could only support taxation increase if it applied fairly,and only after the Govt has got its spending priorities sorted out.

Isn't the reality that whatever changes could be made would hit middle income earners? They have the money to pay tax but not enough to get into major tax minimisation.

 

Given the inability of Bell to sort out spending as Treasurer what comfort is there that he can do so as Chief Minister? Too many vested interests and obligations IMO.

[woolley]

Some people will vote with their feet but it is a delicate balance. Excluding those of us who simply love the Island and would be loathe to leave whatever happens, there are many who look at the whole package and see the tax advantages outweighing the inconveniences and extra cost of living here. There would be a tipping point if they saw the financial package i.e. earnings less tax, less cost of living moving in the wrong direction. For a long time that strictly economic measure has been in favour of living here but I can see a time in the not too distant future when it moves drastically the other way. Then there is the level of service provision. Health, education, children's welfare, benefits etc. We have already been told that we cannot expect better than or even equal to what is available in the UK and "we have to cut our cloth". Big question for those leaving is at what price will they be able to sell their property? Interesting times ahead.

[Lxxx]

Some people will vote with their feet but it is a delicate balance. Excluding those of us who simply love the Island and would be loathe to leave whatever happens, there are many who look at the whole package and see the tax advantages outweighing the inconveniences and extra cost of living here. There would be a tipping point if they saw the financial package i.e. earnings less tax, less cost of living moving in the wrong direction. For a long time that strictly economic measure has been in favour of living here but I can see a time in the not too distant future when it moves drastically the other way. Then there is the level of service provision. Health, education, children's welfare, benefits etc. We have already been told that we cannot expect better than or even equal to what is available in the UK and "we have to cut our cloth". Big question for those leaving is at what price will they be able to sell their property? Interesting times ahead.

 

I can see a time in the not so distant future where the house prices drop dramatically as the mobile middle class desert the island in a hurry. From the comments by ding dong recently he doesn't care either way, his gold plated pension is secure and as long as his mates in Athol Street don't bear the brunt of it it's someone else's problem.

[Lxxx]

I could only support taxation increase if it applied fairly,and only after the Govt has got its spending priorities sorted out.

Isn't the reality that whatever changes could be made would hit middle income earners? They have the money to pay tax but not enough to get into major tax minimisation.

 

As has always been the case.

[manshimajin]

I could only support taxation increase if it applied fairly,and only after the Govt has got its spending priorities sorted out.

Isn't the reality that whatever changes could be made would hit middle income earners? They have the money to pay tax but not enough to get into major tax minimisation.

 

As has always been the case.

Yes

[Cambon]

increasing government influence in personal affairs....his reply....'We've only just started.'

How about this as a conspiracy theory? They are going to be asking lots more questions about peoples' financial affairs so that Honest Al and Fast Eddie can have a stab at seeing how much they could raise with CGT and/or IHT without "scaring the horses" away. They are determined not to shrink Government and its' activities.

 

I'd get a less rigid form of hat if I were you.

looking into personal affairs to me indicates wealth tax. CGT and IHT would kill anything IOM has left

[GD4ELI]

looking into personal affairs to me indicates wealth tax. CGT and IHT would kill anything IOM has left

 

Wealth tax doesn't generate a great deal of money.

[Evil Goblin]

CGT and IHT would kill anything IOM has left

Not necessarily, Cambon. If CGT were not payable within Companies (under 0/10) but only by resident individuals then, say, CGT at 5% compared with the UK (up to 28%) would still be seen as very attractive. IHT for resident individuals might be more of a problem because it would include otherwise tax-free assets held in companies.

[pongo]

looking into personal affairs to me indicates wealth tax. CGT and IHT would kill anything IOM has left

 

IMO 'personal affairs' is far more likely to relate to some of the issue which are clearly addressed in the Treasury consultation document including, for example:

 

- International tax co-operation, the sharing of information internationally and potentially the recovery of overseas tax debts .... (since this is disussed in the same section) as a prerequisite for the sorts of proper taxation agreements which modern jurisdictions enjoy and which are an important part of normal business.**

 

- Widening the scope of NI to potentially include other forms of income including dividends etc

 

- Automatic reporting of banking information, earned interest etc.

 

As above, these and other potentially 'personal' issues are already raised in the Treasury document.

 

ETA: wealth taxes and IHT would be an expensive and bureaucratic nightmare. Can you really imagine an army of expert bureacrats with clipboards going door to door to see what paintings, furniture and other valuable items people had stashed away in their attics and cellars ! You would need a department full of people with art history degrees plus considerable experience.

 

**ETA2: taxation agreements are possibly potentially important if the IOM ever wants to get into the business of intellectual property and rights management in general - ie collecting royalties from abroad. In theory that might have some potential one day - since it is typically virtual (ie no transport costs) and tends to be all about contracts and legal documents.

[Cambon]

looking into personal affairs to me indicates wealth tax. CGT and IHT would kill anything IOM has left

 

IMO 'personal affairs' is far more likely to relate to some of the issue which are clearly addressed in the Treasury consultation document including, for example:

 

- International tax co-operation, the sharing of information internationally and potentially the recovery of overseas tax debts .... (since this is disussed in the same section) as a prerequisite for the sorts of proper taxation agreements which modern jurisdictions enjoy and which are an important part of normal business.

 

- Widening the scope of NI to potentially include other forms of income including dividends etc

 

- Automatic reporting of banking information, earned interest etc.

 

As above, these and other potentially 'personal' issues are already raised in the Treasury document.

 

ETA: wealth taxes and IHT would be an expensive and bureaucratic nightmare. Can you really imagine an army of expert bureacrats with clipboards going door to door to see what paintings, furniture and other valuable items people had stashed away in their attics and cellars ! You would need a department full of people with art history degrees plus considerable experience.

Bank interest / interest earned is pretty much nil at the moment. NI is already basically capped, so any extra from dividends etc. will be minimal. However, people over 65 who still work don't pay NI, which I think they should.

 

Wealth tax could be as simple as a percentage of tax based on your house insurance, combined with a percentage taken automatically from your savings, although I think that may be left alone.

 

IHT would be a nightmare, as would CGT. For example, in the uk you have a separate allowance for tax relief against CGT. That would have to be mirrored here. After which you would have to pay an accountant to produce a consolidated tax analysis.