Savings transfer - is this legal?

cmotd

Is it legal to transfer savings between partners (living together but not married)?

The position is this: I am taking a year off work, my income is well below the tax threshold and my savings qualify for payment of interest gross. My partner has substantial savings in her own name but is a standard rate taxpayer so pays tax on savings interest.

Would it be legal to put all her savings in my name thus saving the tax on the interest? If we were married this wouldn't be a problem but how does HMRC treat it if you are not married? Would it be considered as tax evasion?

zygurat789

Your partner can give money to whomever he/she likes it has always been so.
It certainly would not be tax evasion which is illegal, it is tax avoidance, which may be morally repugnant to a well known liar, but perfectly legal.

xylophone

Remember though, by putting the savings in your name, the money legally becomes yours - you would not otherwise be able to take advantage of the lower rate of tax.

You might wish to think through the full implications.

heretolearn_2

Legal but she would have to be a moron to give her life savings to anyone.

It isn't just put 'in your name'. It becomes your money. She no longer has any claim to it.

Now I'm sure you are a very nice chap but there is nothing to stop you walking out the day after with every penny. You say you won't do that, but who knows what can happen in the course of a year. Even some terrible misunderstanding.

Do you have a will leaving everything to her? If you don't and something happens to you then her money will go to your relatives. Even if you have a will leaving everything to her, if you have children from a previous relationship, for example, they will go to court and be awarded a share of it.

The risk for her of losing everything is not worth saving a little bit of interest on.

If she has a serious amount of money then she should talk to a tax planning expert.

Randvegeta

Just how substantial are we talking?

Interest on savings accounts are terrible nowadays any way.

So

1.) If we are talking about 10k - 20K, your partner can put this in a TAX free ISA over the course of a couple years. The gains will be tax free FOREVER since it's all nicely wrapped up in it's special little tax free bubble. And it doesnt have to be a cash ISA. It can be a shares/investment ISA which probably will make higher returns in the long run.

2.) If you are talking about 80k +, then why bother with interest at all? House prices are low, and assuming you already live in an owned property, buy another one and earn some rental income. Rental income will beat interest in the bank by a couple of percent at least, and you stand to gain on the sale of the house somewhere down the line.

Interest on anything under 10K is really neglible and still best put in an ISA.

But as for your query, nope it's perfectly legal!

ticktack_2

cmotd wrote: »

Is it legal to transfer savings between partners (living together but not married)?

The position is this: I am taking a year off work, my income is well below the tax threshold and my savings qualify for payment of interest gross. My partner has substantial savings in her own name but is a standard rate taxpayer so pays tax on savings interest.

Would it be legal to put all her savings in my name thus saving the tax on the interest? If we were married this wouldn't be a problem but how does HMRC treat it if you are not married? Would it be considered as tax evasion?

Sounds creepy. You're not working (is she supporting you?), you're not married to her, she's got "substantial savings" and you would like to arrange for her savings to be given to you.

My advice to your partner would be, don't even think about it.

Randvegeta

ticktack wrote: »

Sounds creepy. You're not working (is she supporting you?), you're not married to her, she's got "substantial savings" and you would like to arrange for her savings to be given to you.

My advice to your partner would be, don't even think about it.

Though I may think it is unwise for the OP's partner to agree to pushing their savings into the OP's savings account while also NOT working is not a GOOD idea, we certainly don't have all the information, and frankly, it is not our business/concern.

Your comment about the OP being 'creepy' and not really providing any additional useful information seems a little uncalled for.

The OP asked a question, so I think it is fair that those who answer this thread provide a real answer. After all, trust issues aside, there is nothing wrong with the OP's partner putting their savings in the OP's account.

So the answer to the OPs question is, NO IT IS NOT illegal. But of course there are a number of alternatives to increase income/save on tax. "DONT DO IT" is not really advice since it doesn't help with either of those two objectives.

ticktack_2

Randvegeta wrote: »

Though I may think it is unwise for the OP's partner to agree to pushing their savings into the OP's savings account while also NOT working is not a GOOD idea, we certainly don't have all the information, and frankly, it is not our business/concern.

Your comment about the OP being 'creepy' and not really providing any additional useful information seems a little uncalled for.

The OP asked a question, so I think it is fair that those who answer this thread provide a real answer.

Usually, I would agree with that. But in this case, the OP is asking about somebody else's money being transferred completely to him. The person who may stand in need of advice -- the owner of the money -- may not even know her affairs are being discussed in a public forum.

After all, trust issues aside, there is nothing wrong with the OP's partner putting their savings in the OP's account.

Not if it's her idea, and her initiative. There's plenty wrong if it's the OP's idea.

So the answer to the OPs question is, NO IT IS NOT illegal.

It might be illegal. As you said, we don't know the full circumstances. If undue pressure is being put on the woman to agree, or if she's not fully competent, then it might be illegal. And why would anyone hand over their savings if they weren't being pressured to do so?

But of course there are a number of alternatives to increase income/save on tax. "DONT DO IT" is not really advice since it doesn't help with either of those two objectives.

Indeed not. If the owner of the money wants tax advice about her money, she is the person who should ask for it, not the OP -- particularly when his suggestion is that the money should be given to him.

Randvegeta

Usually, I would agree with that. But in this case, the OP is asking about somebody else's money being transferred completely to him. The person who may stand in need of advice -- the owner of the money -- may not even know her affairs are being discussed in a public forum.

We have no way of contacting the OP's partner so all we can do is offer advice to the OP. If the OP is indeed a DECENT human being, good advice on this forum will be taken back and discussed with the partner. If not, then it doesn't matter what is said. Advice should be given in good faith, not suspicion and distrust.

Not if it's her idea, and her initiative. There's plenty wrong if it's the OP's idea

I said, TRUST ISSUES aside. It doesn't matter who's idea is it if both the OP and partner truly trust each other. The only problem with the OP's idea is that it seems unlikely that they are unaware of their options.

It might be illegal. As you said, we don't know the full circumstances. If undue pressure is being put on the woman to agree, or if she's not fully competent, then it might be illegal. And why would anyone hand over their savings if they weren't being pressured to do so?

The question of moving money from one person to another is NOT illegal. Indeed we may not know the full circumstances but if you start fabricating scenarios from nothing, then no question is answerable since it is impossible to know the full circumstances surrounding each scenario.

Example: 'I get paid by PAYE. My annual wages are below the tax allowance. I have no other income. Do I need to pay tax?'

Simple answer is, "NO, you don't need to pay tax".

Complicated answer, "Well we don't know the full circumstances of your situation. Perhaps you are earning on the side and not declaring it. Perhaps you are a drug dealer! So not only would your earnings as a drug dealer be taxable if your earnings were pushed over the allowance, you may be committing a crime by dealing drugs".

I rather just go with the information provided. Simple questions, simple answers.

Indeed not. If the owner of the money wants tax advice about her money, she is the person who should ask for it, not the OP -- particularly when his suggestion is that the money should be given to him.

There are a number of people who ask questions on this forum on behalf of others. People answer those without any problem. Is it simply because the wording of the OP's does not state they are asking on behalf of anyone?

A question has been asked. Why beat around the bush? Why not just answer it. OR, if you feel it is not appropriate to answer, due to suspicion and mistrust, one could always just leave it be.

How do non-constructive comments help anyone?

cmotd

Blimey, you are a suspicious lot! I asked a simple question - I didn't expect the Spanish Inquisition.

I don't intend to elaborate on our joint finances on a public website but I can assure you that I am not intending to abscond with my partner of 36 years life savings! I am also not a drug dealer nor am I living off her earnings. I am financing my gap year out of my own resources thank you and the savings transfer was her suggestion. Better in our account than the Chancellor's was her opinion. I just wanted to check out the legal position.

If I had any criminal intent I would not have been announcing my intentions here. We have full access to each others bank details and passwords already so I could, if so inclined, steal her money anyway.

Thanks to those who trusted my honesty and answered accordingly. Your advice is appreciated. We are aware of (and use) other tax efficient alternatives such as ISAs and are just seeking the best solution for some "rainy day" money.

Randvegeta

Thanks for kudos!

Short answer:No, there are no tax/legal implications for putting your partners life savings into your own account (barring foul play of course).

Long answer: There just may be other ways of putting money/assets aside then sticking it in a savings account. With interest rates so low, I hardly believe the savings are worth it.

If you have 100k, earning a GENEROUS 3% interest, then I believe the savings would be 300GBP /yr from tax you aren't paying. If inflation isn't kept under control, such savings are meaningless. You may as well stick these live savings in other vehicles that may better weather the effects of inflation.