bank account via a 3rd party, tax problem?

relynutz

not sure if i have posted on the wrong board (maybe should be bank accounts )

My husband and i have been trying unsuccesfully to open a business account ... My father in law has offered to open one for us on our behalf,
having just got off the phone from a lady at natwest... and she has told me that my husband and i could open a basic business and my father in law could open just a streamline account . and therefore we could just transfer the money to our account.

But there would be tax implictaions for my father in law, I just tried to ring my accountant but he is on annual leave until next fri, I have an appointment at the bank on tues am.

I was wondering if anybody had any ideas or "solutions 2 rgards to the tax issue ( i am not on about tax evasion or anything like that though)

many thanks

roger_c

Would it be possible for your FIL to hold the account 'in trust for' you and your husband? This would be the equivalent of a bare trust? Perhaps other mse people could answer?

A bare trust would mean that you and your husband are legally entitled to any capital/income held by your FIL and you can request it at any time, but basically he is holding onto it on your behalf.

relynutz

thats an idea, i havent really an idea about but its something i could ask at the bank next week
, thank you

SeniorSam

relynutz wrote: »

thats an idea, i havent really an idea about but its something i could ask at the bank next week
, thank you

............ Be very carerful about the bare trust idea! A bare trust cannot change the beneficiary and assts will count as belonging to the benificiary so if the business goes under, those assets are part of the beneficiaties assets.

Take legal advice always.

Sam

tyllwyd

So you are saying that you want to have an account in your father in law's name that accepts money in, and then for him to transfer the money straight over to you & your husband?

Since your father in law will be effectively associated with the business, I wonder if the most straightforward solution might be for you to set up the business in partnership with him, or a limited company with him involved, then you can sort out with your accountant how much (if anything) is paid to him from the business - your accountant should be able to give you advice on how to keep any tax payable to a minimum, and you'd have everything set up properly in case HMRC asked questions.

CLAPTON

I'ld worry abou the non-tax aspects of this.
if the business went bankrupt or was sued what effect would this have on you FIL if he owns the bank a/c
Do you really a business a/c or could you use a personal one initially?

relynutz

we have been using a personal account, the main reason ( only reason i think is ) that we need a business account is to accept chip and pin , we are finding that we a losing out on a lot of work from not accepting debit/ credit cards. and i'm not talking a couple of pounds .. i have been searching the internet for a solution but cant seem to find 1.???

Pennywise

Do the terms & conditions of the credit card merchant account actually allow him to take monies on behalf of another business? I don't think it's necessarily a tax/accounting problem, but a legal one which needs a review from a commercial lawyer. Also what about complaints and chargebacks - it sounds like he'd be liable if the business went under or refused to pay. All in all, sounds a good deal for you, but a very bad deal for him, as it seems he takes all the risks and you get the money.

relynutz

all i need is access to a chip and pin, i dont want anyone to take on any risks on my behalf, i dont want them to have any responsibilty to the business if that makes any sense?