Don't want to pay tax on savings !!

liverpoolcarl

I currently have £3000 in my cash isa and £3700 in my ICICI savings account. Also I save £550 per month. My mum is a non tax payer so I am thinking of getting rid or my ISA (Halifax paying 5%) and closing my ICICI account and opening an ICICI account in my mum's name and putting all my money into the one ICICI account (do to be 5.45%) so I don't pay any tax.

My mum has a will and everything is left to me as I am an only child.

Can anyone see a problem with this and am I right in saying I will earn more interest tax free in ICICI than I would do with an ISA ???

Phoenix79_2

Can't your mom take out an ISA and you can transfer some of your savings into that? That'll be £6k tax free then. Then take out a new ISA in april for yourself and another in your Moms name.

Will that work?

Bossyboots

The problems with this are:-

1. It becomes your mum's money and she can do just what she likes with it
2. As it is classed as her money it could affect any claims she may need to make for council tax, housing or any other benefit.
3. Makes no difference she has left everything to you in her will. If you fall out (and please don't say this won't happen, you can't possibly be sure) she can change her will.
4. If she marries (again, please don't say it won't happen) this money becomes a matrimonial asset

This is a high risk strategy as the security of your money depends on you and your mum never falling out and her not falling on hard times and needing state support.

liverpoolcarl

My mum already had an isa for my Dad in her name.

System

What would happen in the future if she had to go into a home? Your money would be classed as her money and she would be expected to fund her care if the money in her name was above a certain limit.

johnmoney05

It is a BAD BAD BAD idea. Just think about it, Inheritance Tax and Income Tax which one is higher?? (unless if you are paying higher rate) No matter what, money in your pocket is better than in someone else's.

ReportInvestor

You run a financially complex family up in the North West .

With lower house prices, the scope for fleecing Gordon via such dubious arrangements is much greater given that far fewer people in Liverpool are above the IHT bracket.

But I would endorse the other reservations of all the above posters re benefits, nursing care, remarriage, willful mum etc.

Your money is your own. More fool you if you trust others with it.

liverpoolcarl

:rotfl: Have I opened a can of worms here !!!!

I think I'll give it a miss now listening to your comments and stick with mu isa and icici account.

I just hate the thought of giving my hard earned money to the tax man :mad:

Thank you all for your help..

Phoenix79_2

You are only paying interest on the savings. Its not as if you are being taxed on the whole amount! Even though the taxman will take his cut of the interest, you will still be better off than you would be if you stuck it under your mattress.

ReportInvestor

P.S. Don't forget that it's the taxman that keeps Liverpool going.

I must say that you are more enterprising than the national scouser stereotype .

liverpoolcarl

I agree.. I just hate looking at my ICICI account and seeing the taxmans cut being deducted.. I wish Mr Brown would up the cash isa limit but I can't see that happening..