Using parent's Personal Savings Allowance?

Dird

Currently I control a couple accounts on behalf of my mom (TSB for £100 switch incentive & Tesco for the DDs). I've got money sitting in her Tesco for the interest & next financial year will move into the 40% income range meaning only £500 PSA rather than the current £1k (and all my regular savers will mature next year which will already exceed the £500).

Does anyone think there'd be any issues with me transferring money to additional accounts of hers (e.g. a 2nd Tesco account)?

Presumably it would be treated as tax avoidence (rather than evasion) so not an issue? As people effectively do the same with their OHs.

The 2nd thought was if she was viewed as depriving assets or something if above £6k for a while but as long as the initial transaction originates from my own bank accounts that shouldn't be an issue also?

p00hsticks

Dird wrote: »

The 2nd thought was if she was viewed as depriving assets or something if above £6k for a while but as long as the initial transaction originates from my own bank accounts that shouldn't be an issue also?

If it's in her bank account it's legally hers - if she's claiming means tested benefits then she would need to declare the change in circumstances and potentially find her benefits reduced.

Dird

p00hsticks wrote: »

If it's in her bank account it's legally hers - if she's claiming means tested benefits then she would need to declare the change in circumstances and potentially find her benefits reduced.

She doesn't claim any currently. What if the money became legally mine again then the account closed down then she applied for benefits (if she needed to in the future)?

McKneff

As it is at the moment any money that is in her account is hers, whether you put it there or not, it ceased to belong to you when it hit her account.

As far as benefits are concerned, if she started to claim them and the DWP asked to see bank statements *even from closed accounts* she would be in deep doo doo, because it would look as if she had given the money to you, to enable her to get benefits, in turn, benefits would not be granted.

Placitasgirl

Also if your Mum was to pass away whilst your money was sat in accounts in her name it would be part of her estate, and would be administered/distributed accordingly.

agrinnall

If it's your money it's tax evasion, and if it's not then it's because the money is now hers - you can't have it both ways. In the latter case she can gift you the interest, and the principle at the appropriate time, but then she would potentially face the deprivation of assets / IHT issues described above. You should probably rethink your investment strategy, how about a S&S ISA?

Dird

agrinnall wrote: »

how about a S&S ISA?

Not easily accessible.

What a load of tosh she regularly places bets for me/transfers the winnings to my account also

Dazed_and_confused

Ignoring the ethics of this for a moment you shouldn't lose sight of the fact that all interest of this nature remains taxable income so you would need to consider the impact of this on your on your moms tax position.

She may be unaffected but something to bear in mind.

Dird

Dazed_and_confused wrote: »

Ignoring the ethics of this for a moment you shouldn't lose sight of the fact that all interest of this nature remains taxable income so you would need to consider the impact of this on your on your moms tax position.
She may be unaffected but something to bear in mind.

Yeah she'd never been getting close to the £1k allowance, was just wondering if I could increase how much was saved in her name or if the council would throw a wobbly

p00hsticks

Dird wrote: »

She doesn't claim any currently. What if the money became legally mine again then the account closed down then she applied for benefits (if she needed to in the future)?

If she gave away the money in her account to you immediately prior to claiming means tested benefits then it would be probably be taken to be 'deliberate deprivation of assets' and her claim would be assessed as if the money was still in her account.

If you feel that she is likely to need to claim means tested benefits or social care in the near future, then my personal view is don't involve her in your tax saving ideas.... the savings for you aren't likely to be worth the potential hassle for her

Keep_pedalling

Dird wrote: »

Not easily accessible.

What a load of tosh she regularly places bets for me/transfers the winnings to my account also

Sorry, but you are the one talking tosh and you really should not involve your mother with your tax evasion. There are plenty of legal ways to reduce the tax you pay, why burden your mother with such a dodgy scheme?

Unless you have power of attorney then you should not be putting anything in her name, but even if you do it should be for her benefit alone not yours.