What happens if you have an ISA in someone else's name?

PeteGn

Does anyone know what the penalty is for having 1 ISA in your name and an ISA in another family members name?

Andystriker

Why would there be a Penalty?

More details please?

talana

PeteGn wrote: »

Does anyone know what the penalty is for having 1 ISA in your name and an ISA in another family members name?

You don't have an ISA in someone else's name.
They have it. You've effectively gifted them the money, they can walk away with the cash and you wouldn't have a leg to stand on.

PeteGn

I thought there may be a penalty if the govenment found out that the money was all 1 persons so you would be using someone elses tax allowance.

talana

PeteGn wrote: »

I thought there may be a penalty if the govenment found out that the money was all 1 persons so you would be using someone elses tax allowance.

But that's the point....legally it's not your money any more if it's in someone else's name.
You're allowed to gift money to another person. They can then do what they want with it.

PeteGn

Thanks for the help

pqrdef

When opening an account, one would normally have to sign that one is the beneficial owner of the money. But of course that doesn't prevent the account-holder from having borrowed the equivalent sum of money from somebody else.

As the lender, you run the risk that if the account-holder goes bust you have to join the queue with the other creditors. You can't claim that the ISA is yours and you can't secure the loan against the ISA.

alanq

If however the lender is paid interest by the family member and does not declare it to the tax man there could be severe penalties. (Interest on a loan is not interest on an ISA and is therefore taxable).

pqrdef

alanq wrote: »

If however the lender is paid interest by the family member and does not declare it to the tax man there could be severe penalties. (Interest on a loan is not interest on an ISA and is therefore taxable).

Just convert to Islam. Muslims don't do interest.