Can I use a mate's allowance?

insomniac

My ISA allowance is used up. Would I get in trouble if I transferred some cash into a friend's account and had her invest in an ISA? Would Inland Revenue care? Obviously I trust my friend enough to do this...

exel1966

How would the IR ever know ? Each individual is entitled to open an ISA and that is what happens with married couples and unmarried couples on a daily basis. Who's to say whose money it actually is ?
Just make sure you don't fall out with your friend !!!

Bossyboots

insomniac wrote:

Obviously I trust my friend enough to do this...

If I had a £1 for every time I had heard this to add to a £1 for every time I have heard the words "its an amicable divorce" and then it has turned out badly, I would be lanquishing on a sun lounger in foreign climes sipping cocktails all day.

You don't just have the worry of falling out with the friend, you have the risk of her falling into debt elsewhere and your money being looked up as her asset (which it is, her creditors will not be interested in any "arrangements" you have).

rakesh_2

I did this with a couple of m8's of mine. All i did was that i was the only person to know the the passwords of the account - that way my m8's can not run off with the money!!!!

Bossyboots

rakesh wrote:

I did this with a couple of m8's of mine. All i did was that i was the only person to know the the passwords of the account - that way my m8's can not run off with the money!!!!

That doesn't work as they can apply for a new password saying they can't remember it and there is nothing you can do about it as the account is in their name.

The only way to intercept that would be if the account was registered to your address but account opening is usually so tight nowadays that you have to produce proof of your address and proof of any subsequent change.

equitydealer

insomniac wrote:

My ISA allowance is used up. Would I get in trouble if I transferred some cash into a friend's account and had her invest in an ISA? Would Inland Revenue care? Obviously I trust my friend enough to do this...

Not worth the risk!!

Stonk

Don't do it. There are numerous tales in these forums of people who have lent money to a "friend", only to have them spend it, refuse to repay it, or disappear into the sunset.

This is exactly what you are proposing, because once it's in an account in their name, it is their money.

Debt_Free_Chick

insomniac wrote:

My ISA allowance is used up. Would I get in trouble if I transferred some cash into a friend's account and had her invest in an ISA? Would Inland Revenue care? Obviously I trust my friend enough to do this...

The only way to do this is to GIVE your friend the cash and hope that she (1) puts it in an ISA (she can only do this in her own name) and (2) gives you back the full amount in the account when you want it back.

If you have any kind of written agreement relating to this, then I think the whole thing will be null and void as it's clearly tax evasion! However, there is no tax evasion if you gift the money to her - but no comeback if it all goes t!ts up.

No matter how much you and your friend currently trust eachother, this kind of arrangement breaks friendships.

Also, it is really worth the hassle for a few extra quid? For a basic rate taxpayer with £3,000 to save the difference between an ISA and a non-ISA both paying 5% is only £30!