Where to put around £10k without losing Tax Credis (Help Needed)

EADGbE

Single parent....working part-time.....and I am at the top of my permitted savings while receiving Tax Credits....Want to "Lose" around £10k by gifting (or similar) to my 9 year old child.....
Any advice on best legal options??

Thanks
E

Alter_ego

No fraud advice here

ffacoffipawb

EADGbE wrote: »

Single parent....working part-time.....and I am at the top of my permitted savings while receiving Tax Credits....Want to "Lose" around £10k by gifting (or similar) to my 9 year old child.....
Any advice on best legal options??

Thanks
E

Tax credits not affected by savings, just by taxable income on them. Stick the money in an ISA or Premium Bonds, job done.

colsten

ffacoffipawb wrote: »

Tax credits not affected by savings, just by taxable income on them. Stick the money in an ISA or Premium Bonds, job done.

Are you saying I can have a million in savings and still claim tax credits? All tax credits or just certain ones?

Gadfium

As a taxpayer Im not too keen on seeing someone trying to frig the system and to continue picking up Tax Credits if they are not entitled to it.

ffacoffipawb

colsten wrote: »

Are you saying I can have a million in savings and still claim tax credits? All tax credits or just certain ones?

Yes, if you earn no taxable income from them e.g. £1,000,000 in a shares ISA.


Or even £1,000,000,000.00 (Alan Sugar territory) in a current account paying zero.

colsten

Gadfium wrote: »

As a taxpayer Im not too keen on seeing someone trying to frig the system and to continue picking up Tax Credits if they are not entitled to it.

Me neither but it appears the system is encouraging them to do so.

It feels a bit like leaving my purse on the kitchen counter and rich neighbours helping themselves to the contents when I invite them for a coffee.

Which party can I vote for that will make tax credits means tested?

colsten

ffacoffipawb wrote: »

Yes, if you earn no taxable income from them e.g. £1,000,000 in a shares ISA.


Or even £1,000,000,000.00 (Alan Sugar territory) in a current account paying zero.

incredible. Feels like Greece.

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/366913/wtc2_1_.pdf

Page 21 deals with capital and makes it clear that capital is not normally taken into account when assessing entitlement to tax credits.

However, income on capital is taken into account and if a parent were to transfer capital into the name of a child (except into a tax privileged account like CTF/JISA) and the income on that capital were to be over £100 per annum, then the whole of that income would be deemed that of the parent for TC purposes.

"What ‘notional income’ means.

Besides capital that is treated as income under the Income Tax rules, notional income also includes income that you can be treated as having which you may not in fact have, such as:

• trust income payable to 1 person but which the Income Tax rules treat as the income of another person – the tax credits rules also treat the income as belonging to that other person (for example, investment income of a minor child where trust funds have been provided by a parent and the amount exceeds £100)

• income you may have deprived yourself of for the purpose of getting a tax credit or more tax credits"

TCA

Gadfium wrote: »

As a taxpayer Im not too keen on seeing someone trying to frig the system and to continue picking up Tax Credits if they are not entitled to it.

Neither am I, but tax credits are means-tested, on income, not capital. So as was said above, the OP would only be affected by the income from any savings. Even at that, I think the first £300 of taxable income is still exempt from the rules. Strange but true and all legal and above board.

Not sure if this changes under the new Universal Credit system though.

colsten

TCA wrote: »

Neither am I, but tax credits are means-tested, on income, not capital. So as was said above, the OP would only be affected by the income from any savings. Even at that, I think the first £300 of taxable income is still exempt from the rules. Strange but true and all legal and above board.

Not sure if this changes under the new Universal Credit system though.

Something being legal doesn't mean it makes sense or that it is fair.

I do hope that assets, at least liquid ones, will be taken into account in future before tax credits are awarded.