Dan Jarvis and Anita Cherryholme Barnsleys Labour representatives

Spot on, tykesrus1! El Gordo's taxation of pension fund dividends basically shafted them, and made them uneconomic. OK, demographics would have needed them to reform a bit in any event, but Gordo's ministrations made them unviable. That 'politics of envy' has now transferred itself to other areas, with envious glances being cast on public sector (so-called "gold-plated") pensions. We have replaced one long-term problem (affordability) with another now, because an elderly and ailing workforce will have to bat on into old age or else become more reliant on the state, given the sustained attack on pension provision.

 

They are bare comments however the examples are real.

How they got round it is beyond my comprehension as its not something that I have more than a basic knowledge for.

 

Not really - because we are talking about the big bonuses they get which they end up having paid in shares which are only subject to a lower rate of caital gains tax when they sell them.

 

You still pay income tax on the value of the shares when they're awarded. Then more capital gains tax when they're sold.

 

That is not what the tax exoert said on Radio 4 last week.
He says he bonuses paid in shares are only taxed at the lowest rate if any! Not at the 45% rate which they would normally be. I am just going on his say so.

sent from little boat chippy

 

Believe me, bonuses paid in free shares are subject to income tax in exactly the same way.

Without knowing what he said I can't explain what he meant. Unless he's referring to entrepreneurs' relief but that's a capital gains relief.

 

Isnt' there a way with bonus' for cheif execs and these big money earners that they give you the shares but you can't sell them for 5 years but after 5 years you get them for nowt.

Not like share save where you're limited to next to threpence happeny a week but proper money like these million pound bonus's

 

If you are interested...

Most share awards to executives are restricted such that you can't sell them for a few years. Otherwise they would just sell them immediately for cash and there would be no point in awarded shares over cash in the first place. The whole point of giving shares is to retain the executive (if they leave they don't get their shares) and incentivise them to create value for other shareholders. There's no magic way of avoiding a tax charge by holding them for 5 years though. Generally, there's a part tax charge on the award of shares and a part tax charge on the lifting of the restrictions. Putting restrictions on the shares usually increases the total tax due as it shifts part of the tax charge to the future when the shares have (hopefully) increased in value.

Sharesave is scheme that an employer must offer to all employees so the limits are much tighter (£500 per month that you can put away to buy discounted share options). Still definitely worth taking a company up on though, ordinary Tesco employees realised gains of thousands of pounds because of the dramatic increase in Tesco's share price over three years and and they paid less tax on the gain than they usually would too.