Can I do this?

TurnaroundSue

Hi - I am self employed and am a sole trader. I have 2 business accounts, one current and one savings. I have a few thousand pounds in my savings account earning a pultry interest rate.

My question is: can I transfer these funds into the ISA in my own name or do they have to stay in my business name? Also what is the amount you can - save in any one year with an ISA = is it still £3600. If I can transfer these funds into my ISA and the amount is £3600, can I transfer the balance into my husband's ISA for him to get the benefit?

Many thanks for any advice you can give.

fengirl_2

As a sole trader, you and the business are one and the same. You can transfer into an ISA in your own name and your husband's and you would post the transfer to drawings in your books.

TurnaroundSue

fengirl wrote: »

As a sole trader, you and the business are one and the same. You can transfer into an ISA in your own name and your husband's and you would post the transfer to drawings in your books.

Thanks, that what I thought - just wanted to make sure before I did anything. Obviously if it goes to my OH though it legally then becomes his money?

fengirl_2

Afraid so!

Nomad25

Hi Sue

I am in same position as you. Did this with ISAS last year. Both mine + OH. As Fengirl says you can do it and you are working the system well by doing it.

Because my bank account [business saver] paid such crap interest, I got mad at the money they were making on my balance - I decided to transfer any spare cash straight out [drawings] of the business current a/c into a higher paying [not so much now] easy access savings personal account. If I needed the money I just transferred it back in [cash introduced] - all fairly simple if you have internet bank/saving accounts [5 working days for transactions!], but it means you have to operate fairly tight credit control, but well worth it.

Just make sure if you want it all to be kosher, you enter it in your company accounts. I closed the bank business saver.

TurnaroundSue

Thanks Nomad. Yes I know what you mean about tight control. That is why I am not sure what to do about the extra. Have used up all my ISA allowance for this year, and have around £2k left, so my quandry is this? Do I put say, £1500 in OH's ISA and then leave the extra £500 as a buffer (try and keep £500 in business account at any one time also) or do I wait until April (when hopefully would have built up a bit more) and then put that into a new ISA for 09/10?

Not sure what to do, as not really comfortable with leaving myself so 'short' for getting easy access to funds as always have been lucky to have that security of being able to do this!!

Slinky

If you trust your husband with 'your' money (no offence, some people do, some people don't), you'd be better using up his allowance for this year as you cannot carry ISA allowances over.

Hopefully next year will be kind to you and you can use up your full allowances for next year as well.

You'll be kicking yourself next year if you use up all next year's allowance, have extra you could put away, but can't use up any of the allowance you didn't use for this year if you see what I
mean.

As for leaving yourself 'short', don't forget you can pull money back out, but once it's pulled out you can't replace it (i.e. you can't pay in more than £3600 in in one year even if you have less than £3600 in the account because you withdrew some earlier in the year).

Nomad25

Not sure what to do, as not really comfortable with leaving myself so 'short' for getting easy access to funds as always have been lucky to have that security of being able to do this!!

Hi Sue - sorry for not posting earlier, you sound like me always worrying and making contingency for the 'what if scenario!

As for leaving yourself 'short', don't forget you can pull money back out, but once it's pulled out you can't replace it (i.e. you can't pay in more than £3600 in in one year even if you have less than £3600 in the account because you withdrew some earlier in the year).

Slinky makes a very good point. Ask yourself:

1] Are you reasonably comfortable about what your bills will be and that you have them covered?

2] Do you have an instant 'hammock' [I would quite often put a purchase on a personal cc - but I do pay it off every month] via the ledger/reimbursement route [this keeps it all on record, in case it gets forgotten as an expense several months later]?

3] You may have personal/business overdraft facilities?

It's a pride and principle thing isn't it?

TurnaroundSue

Nomad25 wrote: »

Hi Sue - sorry for not posting earlier, you sound like me always worrying and making contingency for the 'what if scenario!



Slinky makes a very good point. Ask yourself:

1] Are you reasonably comfortable about what your bills will be and that you have them covered?

2] Do you have an instant 'hammock' [I would quite often put a purchase on a personal cc - but I do pay it off every month] via the ledger/reimbursement route [this keeps it all on record, in case it gets forgotten as an expense several months later]?

3] You may have personal/business overdraft facilities?

It's a pride and principle thing isn't it?

Many thanks for your responses. I have enough in my business account to cover my monthly expenses, but because maybe I haven't been so strict with my banking sometimes I have 'borrowed' from my business savings account to cover my drawings; so I suppose I need to make sure I bank on, say, a weekly basis to ensure that there are enough monies for my drawings and will be okay.

I am fortunate in the fact that I do not need to use my overdraft, business or personal, so suppose can rely on those if need be. However, would need to think about any costs involved if I were to drawer on any business overdraft.

My OH is 'sound as a pound' and no worries about putting my business monies into his name.

Many thanks for all your responses - you have allayed (sp?) any fears I had.:T