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Savings: Student finance and Tax code
Hello!
I am new here and to all of this, so sorry if I have posted in the wrong category.
I am a single parent, and my daughter has just gone to university and was entitled to the full maintenance and tuition loans due to me earning under £23k a year, with no savings. My brother has recently sold a family property and has about £185k in a current account but he also has a gambling problem, and he has asked me to hold money in my name for him so that he doesn’t throw it away. I am also concerned about having a joint account with him due to his credit score and future debt.
I was looking at premium bonds and 5% saving accounts, but I am concerned that anything I try to do to help will affect my tax code, and/or my daughters access to the support she needs for university.
If anyone knows of any guidance or suggestions to look into that would be really helpful.
Many thanks in advance!
Comments
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Anything held in an account in your name is deemed to be your money, and half of it yours if it is a joint account (which comes with other downsides as you mention.)
Your brother could put £50K in Premium Bonds himself, the question is whether that would be out of the way enough for his needs. Then notice accounts, which are more out of the way than Premium Bonds but still technically accessible by waiting long enough. Unless there is another family member who could help (perhaps someone also benefitting from the sale of the property, as they wouldn’t be entitled to any means tested support for themselves or their children) I would suggest opening fixed rate bonds in his name. He could get you to set his login credentials so that he does not know them, and you keep a record. Once the cancellation period had passed he wouldn’t be able to touch the money until the maturity date, at which point rinse and repeat. Multi year fixes may mean all of the interest being taxed in one year, but if it stops him gambling away the money it may be a price worth paying.
He can put £20,000 per tax year (currently) into an ISA on which interest isn’t taxable, but fixed ISAs can always be accessed early with a penalty.
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Hi - here is a link to our guidance on student finance, what counts as income etc: https://www.litrg.org.uk/tax-nic/student-finance-and-tax-system/student-finance-applications. Hope it helps“Official Company Representative
I am an official representative of LITRG (Low Incomes Tax Reform Group) part of the Chartered Institute of Taxation who are an educational charity. We are not part of MSE or HMRC. MSE has given permission for me to post on the Forum but this does NOT imply any form of approval of my organisation or its products by MSE. We can’t give individual advice, but if you require further help, we recommend that you contact a tax adviser, HMRC or one of the tax charities where relevant. You can find more information about where to get help with tax here. If you believe I am posting inappropriately please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"2
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