What caught my eye this week.
Figures from HMRC, as reported on in the Financial Times [search result] show the tax take from capital gains tax and inheritance tax rising fast in recent years:
Much of the increase is apparently due to growing tax receipts from property sales. The FT quotes Sean McCann, a chartered financial planner at NFU Mutual:
“Landlords are being caught in a very effective pincer movement from the taxman. From one side the higher rate tax relief on mortgage interest is gradually being phased out and making letting properties less profitable. From the other side, landlords looking to sell buy-to-let properties are being squeezed with an extra 8 per cent capital gains tax.”
I suspect most Monevator readers won’t be too sad to see buy-to-let being squeezed after a 20-year boom. I’m not against the rental sector on principle. But I did think the game had tilted too much in favour of landlords, and I was glad to see measures to address that.
Of course I myself swooped to buy my own home barely a year or so into the resultant correction. My stellar record of making a fist of the erstwhile millionaire-maker that is the London property market continues!
I don’t think property is the whole story, though. It doesn’t take a charting genius to notice the previous peak in capital gains tax receipts was just before the last bear market. So after a decade of strong stock markets, at least some of the latest surge is surely also coming from investors coughing up on selling unsheltered investments.
I am still defusing capital gains tax liabilities from back then – as well as some built up when I’d filled ISAs but hadn’t started on a SIPP – and expect to be doing so in a decade.
You might say it’s a high-class tiny violin problem to have; perhaps but it was also an unforced error.
Back then I thought tax on investments was only a concern for moguls. Not only was I wrong, but in the eyes of The Man anyone pursuing the sort of high six-figure portfolios required for financial independence pretty much is a mini-mogul.
Now I’ve got rid of nearly all the dividend payers it’s not such a pressing issue as it was (at least not until the rules change again) but it is a pain.
How to improve your sustainable withdrawal rate – Monevator
From the archive-ator: Environmental degradation threatens your long-term wealth – Monevator
Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1
The Slashie: A glamorous new way to work, or the ultimate grind? – Guardian
Number of landlords investing in London falls 31% since 2010 – ThisIsMoney
Living costs rising faster for UK’s poorest families than richest – Guardian
More companies are going public again, but the trend to stay private longer is here to stay – Tech Crunch
“Outrage is justified”: David Attenborough backs school climate strikers – Guardian
They’re popular, but high-yield bonds offer the worst of both worlds – Bloomberg
Products and services
Monzo announces new ‘Plus’ accounts with a £6 monthly fee – Monzo
20 ways to save cash while helping to save the planet – ThisIsMoney
GiffGaff is the best rated mobile deal provider – ThisIsMoney
Smart Beta slows down – Institutional Investor
Are prefabs the homes of the future? – ThisIsMoney
The price of buying into the classic English country life – ThisIsMoney
Five of the best wisteria-clad homes for sale [Gallery] – Guardian
Comment and opinion
The problem with most financial advice – Of Dollars and Data
Is the value premium dead? – The Evidence-based Investor
You played yourself – Morgan Housel
[Effectively] get 97% off annuity rates with Class 2 NI contributions… – Simple Living in Somerset
…but beware the top-up system is complex and overdue an overhaul – ThisIsMoney
A stealth wealth solution for property investors with kids – Financial Samurai
Only intrinsic motivation lasts – Daniel Vassallo
“I’m having more fun than any 88-year-old in the world”: Warren Buffett [Search result] – FT
A bad year in the bond market is a bad day in the stock market – A Wealth of Common Sense
The path-dependent nature of Perfect Withdrawal Rates [Nerdy] – Flirting with Models
How many stocks should you own in your portfolio? – Intrinsic Investing
Bond-fund managers have enjoyed a happier hunting ground – Morningstar
Professional investors are now very bearish. Retail investors are very bullish – The Macro Tourist
There’s a case for a 1% allocation to Bitcoin, but beware the charlatans – Money Maven
How do great (active) investors measure success? – Market Fox
The best place to build a life in English? The Netherlands [Search result] – FT
Kindle book bargains
How to Have A Good Day by Caroline Webb – £0.99 on Kindle
Eat Well for Less by Jo Scarratt-Jones- £1.99 on Kindle
Mortality by Christopher Hitchens – £1.39 on Kindle
What You See is What You Get by Alan Sugar – £0.99 on Kindle
Off our beat
Who’s really buying property in San Francisco? [Fascinating end-of-times stuff] – The Atlantic
Global warming: Is Greta Thunberg right about UK climate emissions? – BBC
Computer scientists say AI’s ethics have yet to move beyond Libertarian phase – The Onion
Housework could keep your brain young, research suggests – Guardian
On finding something to say – Seth’s Blog
The Instagram aesthetic is over – The Atlantic
Post-coal Prom Queen: Romania’s lost lands [Gallery] – Guardian
“Warren and I aren’t prodigies. We can’t play chess blindfolded or be concert pianists. But the results are prodigious, because we have a temperament advantage that more than compensates for a lack of IQ points.”
– Buffett’s partner Charlie Munger quoted in Michael Batnick’s Big Mistakes
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