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Large amount of money deposited in my bank account from credit card
matth76
Posts: 11 Forumite
in Cutting tax
Hi
A while ago I used one of my credit cards to perform a 0% balance transfer to pay off an overdraft (of around £4000) of my main bank account. Some credit cards don't offer this facility (most cards are only used to perform a balance transfer on another card) but some allow this so I took advantage of it. My question is will the deposit of £4000 into my bank be "deemed" as taxable from the tax office? In my eyes it certainly shouldn't be because if you take out a loan to pay off a debt (this loan is deposited into a bank account) you do not pay tax on the lump sum you borrow - however when the loan (or in this case the money from the credit card) is put into my bank account how does the tax office know that it is borrowed money and not confused with taxable income? In the past I have taken out a loan which was put into my bank account and wondered at that time how the tax office would know that it is not actual income but borrowed money.
What I don't want is in five years time to receive a letter saying I owe tax etc!
Thank you for any help.
Matt
A while ago I used one of my credit cards to perform a 0% balance transfer to pay off an overdraft (of around £4000) of my main bank account. Some credit cards don't offer this facility (most cards are only used to perform a balance transfer on another card) but some allow this so I took advantage of it. My question is will the deposit of £4000 into my bank be "deemed" as taxable from the tax office? In my eyes it certainly shouldn't be because if you take out a loan to pay off a debt (this loan is deposited into a bank account) you do not pay tax on the lump sum you borrow - however when the loan (or in this case the money from the credit card) is put into my bank account how does the tax office know that it is borrowed money and not confused with taxable income? In the past I have taken out a loan which was put into my bank account and wondered at that time how the tax office would know that it is not actual income but borrowed money.
What I don't want is in five years time to receive a letter saying I owe tax etc!
Thank you for any help.
Matt
0
Comments
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No - the deposit isn't taxable ..... only any interest that is created from it.If you want to test the depth of the water .........don't use both feet !0
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Hi Mike
Thank you for your reply. How will the tax office know that the lump sum is not income?0 -
How will the tax office know that the lump sum is not income?
You're not required to prove the source ... unless you're investigated. But, as previous post, keep the paperwork , just in case.
HMRC are made aware of interest paid into Bank accounts .... so do become separately aware of large sums. But £4k isn't going to tip any balances anywhere. There are people on these forums who 'stooze' from 0% cards and some of them, reputedly, have £50k+ to their name from such sources. But I've never seen mention of HMRC causing them a problem ... so just make sure you have a basic audit trail to the source.If you want to test the depth of the water .........don't use both feet !0 -
Thanks for the replies and help.0
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