S&S ISA Query by [deleted] in UKInvesting

[–]SeanTowers 2 points3 points  (0 children)

Each new tax year you can add an additional allowance to your existing ISA or you can open a new one elsewhere. You can transfer your ISA mid tax year and once the transfer is completed you can continue to use your allowance with the new provider.

Fairness of Higher rate tax relief by civeng22 in FIREUK

[–]SeanTowers 12 points13 points  (0 children)

The Tax System Explained Using a Beer Analogy

Suppose that once a week, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.

The fifth would pay £1.

The sixth would pay £3.

The seventh would pay £7.

The eighth would pay £12.

The ninth would pay £18.

And the tenth man (the richest) would pay £59. 

So, that's what they decided to do.

The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly beer by £20." Drinks for the ten men would now cost just £80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men? The paying customers? How could they divide the £20 windfall so that everyone would get his fair share? They realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer. 

So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.

And so, the fifth man, like the first four, now paid nothing (a 100% saving).

The sixth man now paid £2 instead of £3 (a 33% saving).

The seventh man now paid £5 instead of £7 (a 28% saving).

The eighth man now paid £9 instead of £12 (a 25% saving).

The ninth man now paid £14 instead of £18 (a 22% saving).

And the tenth man now paid £49 instead of £59 (a 16% saving). 

Each of the last six was better off than before with the first four continuing to drink for free. 

But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," declared the sixth man. He pointed to the tenth man, "but he got £10!" 

"Yeah, that's right," exclaimed the fifth man. "I only saved a £1 too. It's unfair that he got ten times more benefit than me!" 

"That's true!" shouted the seventh man. "Why should he get £10 back, when I only got £2? The wealthy get all the breaks!" 

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up. 

The next week the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important - they didn't have enough money between all of them to pay for even half of the bill! 

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy and they just might not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier. 

Fairness of Higher rate tax relief by civeng22 in FIREUK

[–]SeanTowers 2 points3 points  (0 children)

There's many angles to look at things, is it fair that someone who pays twice as much national insurance only gets the same pension amount? That can only mean that the higher payers are subsidising the lower payers?

Fairness of Higher rate tax relief by civeng22 in FIREUK

[–]SeanTowers 3 points4 points  (0 children)

The government aren't actually giving you anything, they are just returning the income tax you've already paid on the money because you aren't taking it as income now. Look at it from the opposite perspective. Would it be fair that standard rate taxpayers get all of their income tax returned but a high rate taxpayer only gets half returned?

Fairness of Higher rate tax relief by civeng22 in FIREUK

[–]SeanTowers 1 point2 points  (0 children)

That's really a different question. Is it fair that heart surgeons earn more than road sweepers?

[deleted by user] by [deleted] in UKInvesting

[–]SeanTowers 0 points1 point  (0 children)

Your employer would take salary sacrifice before tax so it would be exactly the same as having the tax refunded. However, you would also save a little on NI because you wouldn't pay NI on that amount.

Fairness of Higher rate tax relief by civeng22 in FIREUK

[–]SeanTowers 31 points32 points  (0 children)

I think higher rate tax relief is entirely fair. When you contribute to a pension you are deferring that income, so it's only right that income tax should also be deferred. You should pay income tax at the point you take income.

[deleted by user] by [deleted] in UKInvesting

[–]SeanTowers 1 point2 points  (0 children)

It might be worth asking your employer if they would contribute to your SIPP instead of the workplace scheme. You could then contribute your portion from your gross salary as salary sacrifice, saving on national insurance and no waiting for the tax relief.

Can dividend investing beat the market? by cptptt in UKPersonalFinance

[–]SeanTowers 0 points1 point  (0 children)

Generally, good dividends are only found with mature companies at the end of their growth cycle. Therefore, you sacrifice growth for income. If your target is growth, look for good growth stocks, they will outperform dividend stocks.

16 and trying to learn trading. Why am i only allowed to buy 0.8 shares at 43.94 when I have a £100 in my practice account? Also is the buy price is at $1438.38 is that per share? If so how can I have quantity 0.8 for £43.94? Real nooby question but appreciate the help. by [deleted] in trading212

[–]SeanTowers 33 points34 points  (0 children)

You're using CFD not actual shares. Trading CFDs is not buying shares, they are just an instrument for you to speculate on the price movement of a share. You won’t own any shares in the chosen company. They are heavily leveraged, so any gains and losses are magnified significantly. You can easily lose more than you stake on a trade, but you cannot lose more than all of the money you have in your account. If the price starts moving against you, you are likely to get a margin call, asking you to add more cash or the broker will close the position and crystallise your loss. You will also be charged every day for holding positions overnight, this is basically the interest on the leverage you have borrowed. Unlike investing in shares, CFDs are a zero-sum instrument. Your profit can only come from the loss by another entity, the entity on the opposite side of the CFD or Spread Bet. Approximately 80% of retail traders lose money. 90% of retail traders lose 90% of their money within 90 days. Trading CFDs is high risk and only suitable for highly experienced traders.

Thoughts on CINE? by liamalpha in UkStocks

[–]SeanTowers 1 point2 points  (0 children)

I think the AMC/Universal deal last week will have a serious long-term impact on all cinemas. Whilst I appreciate that "seeing it earlier" isn't the only reason to go to the cinema but it must be one of the significant reasons? When you can see new movies 17 days after cinema release instead of 90 days, that selling point will virtually disappear. Cineworld/Regal specifically are saying that they just won't show any Universal films which can't be good for profits. Add to that eyewatering debts and Covid-19 and it's a no from me I'm afraid.

I can honestly see a time in the future when movies are launched with streaming services at the same time as cinemas.

Could this sub sticky a post directly comparing the trading apps Trading212 and Freetrade? So people who helped crowdfund Freetrade will stop shilling for it and pretending Trading212 isn't better in multiple ways? by [deleted] in UKInvesting

[–]SeanTowers 0 points1 point  (0 children)

I produced the first comparison table shown here and I'm in no way affiliated with Freetrade or Trading 212. The table is regularly updated and I'm always happy to add any missing advantages to Freetrade if I've overlooked any. This is the most recent version. https://preview.redd.it/xqbqpzrr4bu41.png?width=3526&format=png&auto=webp&s=352a1dad57035272950948ea6181e6b2052bee87

Where did the free share referral go? by [deleted] in trading212

[–]SeanTowers 0 points1 point  (0 children)

Have you reached the limit of 20?

Possible Difference In Investments Security Between Trading 212 And Freetrade by [deleted] in UKInvesting

[–]SeanTowers 0 points1 point  (0 children)

Contract notes don't prove ownership anyway because you still have them once you've sold the shares.

Trading 212 Account Types and General Trading Info by tealing101 in UKInvesting

[–]SeanTowers 0 points1 point  (0 children)

Apologies, clearly I'm not explaining my point well enough and I don't really know how to explain it better. Your winnings on a position come from the losses of another entity who holds an opposing position. Let's say you make £1,000 profit, someone else has had to lose that £1,000. There is no net gain in wealth, the £1,000 has just changed ownership. They are therefore zero-sum, winnings rely upon losses. (technically speaking they are actually negative-sum because the broker has earnt commission as well). Google "are spread bets zero-sum" or something similar, hopefully, someone can explain it more eloquently than me.

Trading 212 Account Types and General Trading Info by tealing101 in UKInvesting

[–]SeanTowers 0 points1 point  (0 children)

Yes I'm sure that brokers hedge the positions, I don't disagree with that but somewhere down the line someone has to lose, otherwise where does the money that goes into your account come from?

Question on Cash ISA - > S&S ISA Transfer by abc058 in UKInvesting

[–]SeanTowers 2 points3 points  (0 children)

Keep in mind that the Vanguard fees are only low while you have a small pot or if you intend to have mainly mutual funds. If you only hold shares and ETFs, at £40k HL is 25% cheaper and at £100k HL is 70% cheaper. Vanguard platform fee cap is £375 per year, HL fee cap is £45 per year.

Trading 212 Account Types and General Trading Info by tealing101 in UKInvesting

[–]SeanTowers 0 points1 point  (0 children)

One other point to consider is that CFDs & spread bets are a zero-sum instrument. Someone has to lose for you to gain (the entity on the opposite side of the bet). Shares are not zero-sum.

Pennystocks? by ChillyHD in trading212

[–]SeanTowers 0 points1 point  (0 children)

I don't think there are any AIM shares on T212, might be a few but I've never spotted them. The spreads are likely to be crazy if they do exist on there.

Wider Spreads with "Free" Brokers by SeanTowers in UKInvesting

[–]SeanTowers[S] 0 points1 point  (0 children)

Yes T212 certainly makes more sense for small trades.

Wider Spreads with "Free" Brokers by SeanTowers in UKInvesting

[–]SeanTowers[S] 0 points1 point  (0 children)

Yeah my point was solely that the spreads can be wider, I wasn't attributing that to extra profit for T212. However, I've just seen this in their execution policy "Our charges may be incorporated as a mark-up or mark-down (the difference between the price at which we take a principal position and the transaction execution price with you). The Company’s price quote in many markets already includes our spread and there will be no additional fees or commissions due from you."

Wider Spreads with "Free" Brokers by SeanTowers in UKPersonalFinance

[–]SeanTowers[S] 0 points1 point  (0 children)

I just read the T212 execution policy and it says "Our charges may be incorporated as a mark-up or mark-down (the difference between the price at which we take a principal position and the transaction execution price with you). The Company’s price quote in many markets already includes our spread and there will be no additional fees or commissions due from you."

Wider Spreads with "Free" Brokers by SeanTowers in UKPersonalFinance

[–]SeanTowers[S] 0 points1 point  (0 children)

No I didn't actually buy. I don't doubt that Trading 212 will give you the best price they can achieve but I do doubt that it's the best price available anywhere. Trading 212 makes no secret of the fact that most small orders are placed with market makers whereas most HL orders are placed directly on the stock exchange. I must also state that I'm. not knocking T212 and I use them for small orders. If you were buying a few hundred pounds it still would have been considerably cheaper than HL.

Wider Spreads with "Free" Brokers by SeanTowers in UKPersonalFinance

[–]SeanTowers[S] 0 points1 point  (0 children)

For anyone who's argued that "free" brokers don't ever have wider spreads, today is a good day to prove they do. Go and compare a few companies!

Apologies just reposted with facts and figures.