Can you pay into someone else's ISA ?

Murphy_The_Cat

Would a parent be able to contribute into an adult childs ISA without any issues ?


If so, is it as simple as transferring money into their bank account and then the money gets transferred to the ISA provider at a later date ?


The money would be a (regular) gift and the ISA would belong to the adult child.

eskbanker

https://forums.moneysavingexpert.com/discussion/6069174/htb-deposits-need-to-come-from-an-account-in-his-name discussed this and referred to a previous longer thread, but it shouldn't be a problem if gifting cash, and shouldn't even need to be routed through an intermediary account....

Murphy_The_Cat

eskbanker wrote: »

https://forums.moneysavingexpert.com/discussion/6069174/htb-deposits-need-to-come-from-an-account-in-his-name discussed this and referred to a previous longer thread, but it shouldn't be a problem if gifting cash, and shouldn't even need to be routed through an intermediary account....

Thank you for the link/s. I'd found the 2nd (2011 link), but didn't know if the information had been superceeded.


So looks to be good :beer:


Presumably its the same story for pension contributions, as long as relevant earnings/contributions levels are adhered to.

Notepad_Phil

Murphy_The_Cat wrote: »

If so, is it as simple as transferring money into their bank account and then the money gets transferred to the ISA provider at a later date ?

Not sure that it will go quite as you might be thinking it will, although it might just be my reading of your post - if you transferred the money into their bank account it would rely on that person to either manually move it or to set up a standing order to move it across to where the ISA is.

I don't know whether all ISA providers allow outside transfers directly into their ISA accounts so that might be something to check if you want the money to go directly into the ISA. i.e. that it has an associated sort code/account number and possibly a reference number if it is a building society.

Murphy_The_Cat

Notepad_Phil wrote: »

Not sure that it will go quite as you might be thinking it will, although it might just be my reading of your post - if you transferred the money into their bank account it would rely on that person to either manually move it or to set up a standing order to move it across to where the ISA is.

I don't know whether all ISA providers allow outside transfers directly into their ISA accounts so that might be something to check if you want the money to go directly into the ISA. i.e. that it has an associated sort code/account number and possibly a reference number if it is a building society.

My thought was that person A (lets call him Murphy The Cat) does a standing order for a set amount each month to person B (lets call them Murphys Sprog). Then several days later, the money gets taken by Direct Debit from the Murphys Sprog account, into the Murphys Sprog ISA.


Doing it that way , the ISA provider should be happy about the source of the funding.

Flobberchops

Check the ISA's Ts+Cs but the general answer is yes, paying money into an ISA is *usually* as simple as making a transfer to the correct sort code and account number (or depositing cash with a cashier, where that kind of thing is still permitted). The ISA provider themselves is unlikely to ask or care what the source of funding is, unless it flags up as a Money Laundering concern.

For a number of reasons though, it may be best to give the recipient the money in a non-ISA account first and let them pay it into the ISA themselves. Reasons could include:

- Accidentally taking the recipient over their annual limit, or monthly limit in the case of HTB
- Paying into an ISA that doesn't have a current and valid declaration
- Paying into an ISA with an existing provider, whereas the recipient intended to open a new ISA of teh same type with a different provider that tax year
- Some HTB ISA providers insist on only one deposit per month, so sending a £1 "test" transfer could mess up that month's limit for the recipient

I mean, in all likelihood the recipient would be delighted to receive money, but there are a handful of specific examples where that may not be the case. Either make sure they know what the arrangement is, or give them the money by other means.

Boleyn19

If over your £3k personal allowance you'll have to live 7 years for it not to be outside your estate.

Eco_Miser

Boleyn19 wrote: »

If over your £3k personal allowance you'll have to live 7 years for it not to be outside your estate.

Sounds like a regular gift out of income to me, in which case it would be outside the estate immediately.
Of course it might actually be a series of gifts from capital.

Murphy_The_Cat

Eco_Miser wrote: »

Sounds like a regular gift out of income to me, in which case it would be outside the estate immediately.
Of course it might actually be a series of gifts from capital.

I'm just currently playing around with numbers in my mind (or on a keyboard !)
My first thought was for "matched investing" where I match the investment that my children are making to their JISA's and then I moved the thought along as to the possibility of gifting money to them, in a way that would have enormous benefits to them in in future years, whilst keeping the gifted money away from IHT calculations.
The gifts could be from earnings or capital, depending on circumstances.