The FT includes an article on the attractions and risks of the second tier, AIM, stock market.In particular it focuses on the attraction of investment in this market for the elderly as shares quoted on it and are subject to inheritance tax business property relief and are exempt from that tax as a result. I am quoted in the report:
HMRC recognises Aim companies as unlisted and private – unlike companies listed on the main London Stock Exchange. However, this doesn't convince many tax campaigners.
“The economic logic for inheritance tax business property relief being granted on investment in Aim quoted shares is baffling,” says Richard Murphy, professor of practice in International Political Economy at City, University of London.
“Rarely are these companies real start-ups, and their flotation is more frequently linked to releasing funds for founder shareholders than it is to raising new funds,” he adds. “The merits of attracting funds into this market seem few and far between for a government critically short of tax revenue. If there was an obvious candidate for a wholly unjustified tax relief to be removed then this one should win the prize.”
Prof Murphy warns readers relying on Aim Isas for inheritance tax planning purposes that curbing the use of this relief could be an “easy win” for the government's Office for Tax Simplification.
I hope they take the issue on.
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Good to see your thinking being recognised. I suppose we could make quite a long list of taxes crying out for “simplification”, or perhaps even to be made fair. VAT is possibly the most regressive tax, but there is a mountain of freebies that benefit only the wealthy, like ISA’s, dividends and interest, capital gains tax, main home exemption not to mention all the trusts and other methods of “tax efficient planning” devised by clever dicks who contribute nothing to fairness and equity in society.
However, a government which is beholden to the rich, wealthy and powerful are unlikely to make changes which would reduce their rentier income.
A whole load of work on all this is coming out soon
Look forward to that. Much needed.
@G Hewitt.
Main home tax ( IHT ) exemption abolition ? In your dreams . Not even a “Maduro” type raft of left leaning Govt. policies would envision that one in this country of both small shop keepers and even smaller freeholders……. A guaranteed dagger to its heart ( unless it simultaneoudly were to legislate a ban in future direct elections).
I suggested cgt exemption abolition for the record
@Lesley Plains I think I said as much in my last para. And it’s why we need a revolution.
Should we really say the government is “critically short” of tax revenue? Doesn’t that signify acceptance that government spending is limited by tax revenues?
It is not short of tax revenues
But it may collect insufficient tax
But inflation is historically low at the moment so there is not insufficient tax being collected.
And if there isn’t enough money to spend the government need only print more.
Tax is nit just about totals
It has about making sure the right tax is paid by the right people
Tax is abiut delivering social policy and redistribution as well
Why do you need tax for redistribution? If I have £100 and you have £1 Why can’t the government just print £99 extra for you?
Since some people are opposed to higher taxes doesn’t that make more sense?
Sure if the extra money given to you creates inflationary pressure then both of us could be taxed the same.
That creates equality doesn’t It?
Thanks in anticipation of your reply.
The inflation involved would be excessive
And money is not the same as the control of wealth in such situations
Well that’s confusing.
I am sure you have said that governments can print as much money as they like. But now you seem to be saying that if a government prints too much money it is inflationary.
The first claim was very radical but that second claim is very orthodox.
I have always made it clear that it can print money until full employment and then inflation follows
The mistake is all yours
How much IHT is being avoided using AIM based investments? Do you know?
But of a pointless win if it brings nothing in.
No one knows
But it is being heavily marketed so I am very sure it is being used
“a pointless win” – I suppose there are two (or more) strategies here: nibble away at this one and that one and perhaps in 2 or 3 hundred years we might have a fairer and more equitable tax regime and perhaps a slightly fairer society – but as Scheidel has argued, most levelling has involved horrendous violence and/or loss of life and is only temporary – or we can support those who campaign for the bigger picture of tax justice.
TBH I’m completely baffled by this comment
but as Scheidel has argued, most levelling has involved horrendous violence and/or loss of life and is only temporary — ”
I’m sorry to be pedantic but everything is temporary. Life is very temporary hence the urgency of trying to ensure that people’s {short) lives aren’t entirely blighted by poverty.
It is also a silly comment. The improvements to working people’s lives made by the 1950 Labour Govt were a real “thing”. The improvements to working people’s lives made by Castro in Cuba were a real “thing”. The improvements to working people’s lives made by the Chavez Govt in Venezuela were a real “thing” although fleeting.
So far as I’m aware none of those involved “horrendous violence and/or loss of life”
It would seem to me that it is the retention of the status quo ante that usually leads to “horrendous violence and/or loss of life”
May I respectfully suggest you read the book and understand his argument based on considerable evidence. The key word in the reference to Scheidel was “most”.
Mr/Ms Hewitt
I haven’t, I must admit, read Scheidel, & I appreciate you are trying to paraphrase his, no doubt hefty, opus. Nonetheless, if you make a statement like;
“most levelling has involved horrendous violence and/or loss of life and is only temporary — ”
you must expect to get picked up on it because it makes no sense. Demonstrably, for example, Lincoln’s emancipation or, come to that the emancipation in the British Empire, were not temporary phenomena.
Also, how has Mr Scheidel considered alternates? It seems to me that doing nothing about inequality is most likely to lead to horrendous violence & loss of life. If the reforming Czar had had a chance to improve the condition of the serfs Russia might have been spared the hideous blood-letting that followed the 1917 uprisings.
Oh. I see. The truth about Castro, Chavez and the inevitable failure of socialism and the deaths and imprisonment in their countries must be hidden.
What a vile, dangerous little man you are.
Small wonder you are on your own.
I condemn all non democratic regimes and all democratic abuse including that in the UK and USA
I have no time for political tyranny
But I also have no time for right wing trolls who promote it