Tax Free?

CambridgeGal

Hi Everyone!
I'm desperately trying to save more money at the moment (need to buy a house but not got enough and renting is crippling me!) if I put my savings in a non tax paying relatives account to avoid tax, is this illegal?

le_loup

That's tax evasion. Illegal. But if you want to give them the money and they put it in an ISA, that's fine.

xylophone

Have you used your ISA allowance for this year and will you use it next year?

dunstonh

if I put my savings in a non tax paying relatives account to avoid tax, is this illegal?

It is tax evasion but it is the least of your worries. If you do this it is a gift to your relative. So, if they spend it, die or you fall out, then it is their money, not yours.

AndyGuil

Inheritance tax issues gifting money too.

DiggerUK

CambridgeGal wrote: »

.......if I put my savings in a non tax paying relatives account to avoid tax, is this illegal?

No, it is tax avoidance, not tax evasion, and is legal.

However, as it is legally your relatives property, due to the fact it is in their name, you will need to trust them to pay it you back when you ask for it.
..._

Linton

DiggerUK wrote: »

No, it is tax avoidance, not tax evasion, and is legal.

However, as it is legally your relatives property, due to the fact it is in their name, you will need to trust them to pay it you back when you ask for it.
..._

and hope they dont die/go bankrupt/divorce in the meantime.

le_loup

DiggerUK wrote: »

No, it is tax avoidance, not tax evasion, and is legal.

No, it is evasion if you still keep control of the money!
But as you (and I) say, if you want to give them money, that's fine. But it then becomes their money, not yours.

Gromitt

I've lost count as to how many people give their spouse money because they are on 40% tax whilst their spouse is on 20%. If it is illegal then no one gives a damn!

le_loup

Spouses are a distinct group which HMRC treats in an entirely different way.
... and you know that!
The OPs makes no mention of spouse.
Transfer of ownership is not the same as keeping control.
... and you know that too!

Anyway, clearly the OP doesn't care because he/she has not returned; why do we bother?