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Can I put 25k in my Dads Tax free account

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Just a thought, but I have 25k maturing in a weeks time from a 1 yr Bond, can i simply gift it to him in order to take advantage of the tax free savings he qualifies for ?? ...
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Comments

  • opinions4u
    opinions4u Posts: 19,411 Forumite
    What tax free savings does he qualify for?
  • ultra10
    ultra10 Posts: 379 Forumite
    He is over 75 so i think doesnt pay tax I think
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    Don't do it.

    1) Age doesn't make him a non-taxpayer - his income does. State pension plus small private pension plus interest on savings = tax liability for many.

    2) If he dies and has other assets, you could end up paying inheritance tax on your own money!

    3) If he doesn't have a will and there are other claimants on the estate, you could lose some of your money to other family member.

    4) If he ends up in a care home, it will be treated as his money and some of it used to pay for his care.

    There are numerous other reasons not to do this !!
  • ultra10
    ultra10 Posts: 379 Forumite
    Thanks for that . It was just a thought but will probably go for another Icesave bond now .. :beer:
  • Voyager2002
    Voyager2002 Posts: 16,254 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ultra10 wrote: »
    He is over 75 so i think doesnt pay tax I think

    People over 75 may have a higher personal allowance than the rest of us, but that is very far from being a blanket immunity from tax. Only the Queen enjoys this, and that is not a function of her age!

    It may be that he would pay less tax on the income from your money than you would, so under some circumstances it might make sense to give the money to him instead of anything else you might have been planning to give him. But once you have made the gift, it is his.
  • Is it illegeal to put money in somebody elses account to avoid paying tax on savings?
    They say you can't put a value on life... but I live it at half price!
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    People over 75 may have a higher personal allowance than the rest of us, but that is very far from being a blanket immunity from tax. Only the Queen enjoys this, and that is not a function of her age!

    It may be that he would pay less tax on the income from your money than you would, so under some circumstances it might make sense to give the money to him instead of anything else you might have been planning to give him. But once you have made the gift, it is his.
    I think you'll find that since April 1993 Her Majesty has paid income tax.

    I don't think she is liable to CGT or IHT though.
  • Plasticman
    Plasticman Posts: 2,540 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Is it illegeal to put money in somebody elses account to avoid paying tax on savings?


    Not if you're married to them.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    Is it illegeal to put money in somebody elses account to avoid paying tax on savings?

    it isn't illegal to give money to some else.
  • dunstonh
    dunstonh Posts: 119,650 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    It would be classed as a gift to the father. So, the father can spend it and if he was to pass away it would be distributed in accordance with the Will (if there is one).

    As your father is a non tax payer there is a good chance he is getting pension credits as well. Gifting him this money could see him lose some or all of the pension credit and that could do him a lot of harm financially.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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