Savings, pension advice sought.

sweven

We've started to make a bit of money from Google adsense and plan to build upon this in the next few years - the idea is to save everything we make this way to contribute to a decent retirement pot in 15 to 20 years. We don't have any other worthwhile pension/retirement arrangements.

We've set up a cash ISA to put any earnings into for now, but am interested in the options.

The Google account is in Mr Sweven's name, and he's a basic rate income tax payer. Mrs Sweven works part time, and is just under the threshold for paying tax. (Both are employees)

We presume we'll need to declare the Google earnings on our income tax form, and pay tax on it.

A couple of options occur to us:

1 - Put the money into a pension instead - presumably then we wouldn't need to pay income tax on it.

2 - Perhaps it might make sense to open an account in the US or some other country. Would this allow us to avoid tax, or perhaps get a better interest rate. The Google money could be paid directly into it without coming into the UK at all.

We're talking about roughly £1,000 per annum at the moment, but hope to double it each year.

Any advice on the above would be appreciated.

cheers

Sweven

dunstonh

We presume we'll need to declare the Google earnings on our income tax form, and pay tax on it.

yes.

1 - Put the money into a pension instead - presumably then we wouldn't need to pay income tax on it.

You would pay tax on it still but the pension would get tax relief to offset it. However, you shouldnt invest to save tax (unless the tax benefit is really a big gain for the investment - which pension tax relief isnt).

2 - Perhaps it might make sense to open an account in the US or some other country. Would this allow us to avoid tax, or perhaps get a better interest rate. The Google money could be paid directly into it without coming into the UK at all.

You still pay tax on it.

sweven

Thanks dunstonh - so I'm probably doing the right thing in terms of careful investment.

cheers

Sweven