Avoiding Tax Returns - Large Lump sum

Trolly_Wally

Hi,

I've never filled in a tax return and have no desire to, although I suspect it will happen sooner or later. I am currently a lower rate tax payer (£39.6k) with no savings. However, I have just sold my flat and will shortly have around £50k cash, which I am concerned will cause HMRC to ask me to complete a tax return which I'll have to do each year forever more. I have nothing to hide, I just really can't be bothered with the whole affair.

Is this a large enough sum to prompt them to send me a tax return? And if so, is there anyway of avoiding this? ...can I put the money in an overseas or off-shore account or something? I'm looking to buy another property shortly so will probably only have the cash for 6-12 months.

Thanks,
Wally

le_loup

Trolly_Wally wrote: »

I have nothing to hide, I just really can't be bothered with the whole affair.

Get a grip man!
There are lots of things I can't be bothered about but when you become a grown-up, you just have to deal with them.

dzug1

Lump sums do not trigger tax returns - you don't have to tell them about it if it doesn't lead to a tax liability. Which it doesn't.

twig1_2

There are advantages and disadvantages to off shore accounts but you will still be required to declare the tax on the interest.See this
http://www.thisismoney.co.uk/savings-and-banking/tips-and-guides/article.html?in_article_id=394274&in_page_id=53951&in_advicepage_id=98

However if you put it in a Uk account and not request you receive the interest gross the taxman will get his due without you being bothered with the tax returns so why make it difficult for yourself.
If you pay tax through the paye system it isn't the case that you will have to fill in a tax return forever they collect any tax say from savings recived net of basic rate tax from higher rate tax payers by alterering your coding notice

Trolly_Wally wrote: »

Hi,

I've never filled in a tax return and have no desire to, although I suspect it will happen sooner or later. I am currently a lower rate tax payer (£39.6k) with no savings. However, I have just sold my flat and will shortly have around £50k cash, which I am concerned will cause HMRC to ask me to complete a tax return which I'll have to do each year forever more. I have nothing to hide, I just really can't be bothered with the whole affair.

Is this a large enough sum to prompt them to send me a tax return? And if so, is there anyway of avoiding this? ...can I put the money in an overseas or off-shore account or something? I'm looking to buy another property shortly so will probably only have the cash for 6-12 months.

Thanks,
Wally

John_Pierpoint

le_loup wrote: »

Get a grip man!
There are lots of things I can't be bothered about but when you become a grown-up, you just have to deal with them.

Because SA is a pain in the neck.
Every year you find some stupid little change in procedures in the financial services industry - such as "we only mail out interest and tax deducted certificates if you ask for them".
That sort of hassle can waste a couple of hours to get details that actually make sweet FA difference to the amount of tax you owe, BUT if you left it off somewhere you might well trigger an investigation.
(I have written before about the fun of being told at Christmas that my explanation that "what ever I put in the (CGT) figures, I cannot possibly owe you any tax as the transaction is exempt" was unacceptable, so I had to waste my money and a day iof my life creating untaxable figures).

In theory the job takes an afternoon a year but it would be a very brave self assessor who waited for the wet Sunday afternoon after Xmas, before getting on with the task.

THRIFTY_GIRL

dzug1 wrote: »

Lump sums do not trigger tax returns - you don't have to tell them about it if it doesn't lead to a tax liability. Which it doesn't.

How do you know there is no tax liability? That is a grand statement to make without having all of the facts to hand.

Would be better to say .... you do not have to pay tax on the sale of your main residence provided you have not let/rented it out at any point. Please be careful as if there is a liability and OP reads your advice the wrong way then there could be a potential problem for them in the future.

le_loup

John_Pierpoint wrote: »

Because SA is a pain in the neck.

No they isn't ... for most people.
If nothing else they make you keep yourself in order, and provide incentives to get rid of them by being more tax efficient.
I would think the OP would have to complete just two lines and would be able to stop after a couple of years when HMR&C see it is a straightforward case.
People do try to frighten other people about administrative matters that are nowhere as problematic as they may seem.
If you think SA for a guy on PAYE and a little bit of interest income is difficult, wait until he has to apply for attendance allowance!

John_Pierpoint

Yes I know what you mean - we became the neighbourhood experts on applying for Attendance Allowance.

Can I recommend Lasting Power of Attorney as something that pips them all.

http://www.bbc.co.uk/programmes/b00t3zb8

John_Pierpoint

So there we have it.
I would recommend that everyone listen to this programme. You could be hit by a car tomorrow and then it will be too late to create a Lasting Power of Attorney.
Even if you have, how long does it take to get it/them registered in exchange for your 120 quid payment(s)???:

We have already seen the processing time for LPAs come down to 13 weeks and EPA times are holding steady at 9 weeks. For LPAs, this breaks down into 5 weeks for us to carry out the initial checks and send notifications of receipt, followed by the statutory six weeks waiting period and then a further two weeks to process and despatch the final registered documents (down from three weeks in May). In practical terms, this means you may not receive any notification from this office until up to 5 weeks after making an application. Staff will often have very little by way of any useful information that they are able to provide on the progress of an individual case during this period.

So even if you have done the sensible thing, you will need an understanding relative, stuck in the dark wondering if the paperwork is lost in the post, prepared to "sub" you while the bureaucrats quietly and carefully get on with their service.

If you haven't been able to find a trustworthy volunteer to look after you - the "court" will eventually appoint a solicitor. Beware you will likely be paying 199 pounds a week for the privilege and the court controlled funds will be earning the bank base rate of 0.5 percent.

Anything you need done will take "forever" (well perhaps 18 months). Even when your bullying relative is found to have stolen lots of money (actually 300,000 including/plus (?) half a house) it will take a solicitor three months to stop the fraud.

God how I hate this "don't call us we'll call you" patronising attitude - Just what would it cost to return a pre-paid postcard with a reference number on it. The waiting in the dark attorney could then text the reference number and get back a:
Its is waiting in the in tray code or
We have notified the family of your application code or
45 days are up and its back in the in tray again code or
Get in touch there has been a glitch code.

This sort of service makes a solicitor doing conveyancing look like a paragon of customer facing good communications.

Fortunately I took the advice of MSE and created an Enduring Power of Attorney while I still could.