credit card bagging!

welnik

I have been doing this since March and have quite a sum now invested in various things.

I was just thinking, does the income have to be declared the tax man? I dont have to complete a tax return. Some of it is in my children's names in trust with me as the operator.

I was thinking about this, if I popped my clogs unexpectedly and they money is in my children's names, is that money legally theirs? I know when a relative died an left debts with credit cards they were written off.

Tim_L

You can earn a total of £100 tax free interest a year from money gifted from you (which is the case with a stoozepot) to each child. After this you must declare the income on your own self assessment form: the onus is on you to declare, and if you don't the IR can fine or investigate you. It is not worth the hassle this would cause to try and evade the tax, and just by putting cash in your children's names you are effectively obliging yourself to fill in a self assessment form.

Generally stooze income is taxable in the same way as any income on savings, i.e. it is deducted at 20% for taxpayers and you need to declare the income and tax payed if you are a higher rate taxpayer The main dodge is either to offset it against an offset mortgage, or to put it a non taxpaying spouse's name.

Also credit card debts are paid out of the deceased's estate, if there is one, before any distribution is made. What probably happend with your relative was that the debts exceeded the value of the estate so no-one took it on as an executor - in these cases the debts would have to be written off or the estate liquidated wholly in the interest of the creditors.

Money in your children's name is legally theirs but there are strict gifting rules on inheritance tax: you can give away a total of £3000 a year tax free with other allowances for major events such as weddings and so on. Anything else would be counted as part of the estate for IHT calculations.

welnik

Thanks for that. I have only put £1800 each in their names so that the amount of interest should be under £100 for both of my children. So I suppose I am ok on the declaring it on the tax return front and also the gift side of things.

I have also put money in ISAs in my name and my husbands.