Multiple ISA accounts !

Pavlov_2

This is a tricky question, I know but I sincerely would like to know what the legal issues are relating to funding ISA accounts belonging to friends or relatives. If for example I have a relative with insufficient savings to open an ISA is it permitted to fund all or part of an ISA for them. (The account would be their ISA in their name and they would operate it).
Obviously, the other thing I would like to know, if this is possible what are the legal issues on the sharing of the interest.
Of course, I don't wish to break the law but, I would like to know if people actually do this and if it is legal or not.
Thanks in advance for any suggestions / comments.

asharon

I would have thought it would come under the rules that say how much money you can give someone else. Legally you would be giving them the amount to open the ISa and then hoping they were going to give you the interest back which is fine from a legal point of view as long as they don't change their mind.

dadsarmy

They may have to pay tax on anything over a certain amount per year on your gift - It was once £250.00 - I think

steady__eddie

There are a few thoughts on a question similar to this one on this thread http://forums.moneysavingexpert.com/showthread.html?t=822417

RayWolfe

Be very careful.
Tax evasion, for that is what you are contemplating, is a criminal offence.
There is nothing to stop you giving money to other people, however. But the act of giving is just that, ownership changes.

Kay_Peel

The key word in ISAs is Individual. They weren't intended for sharing.

When you open an account, the money has to come from the Individual's own money - by cheque, debit card etc. The fund manager/ISA manager will deal with that person and no other. The holder will decide how the ISA will be managed - making decisions about moving, staying, cashing in. Third parties don't figure.

Or so I believe, unless anyone has some further information?

munk

At the end of the day what you're doing is giving the money to someone else - you don't own the money any more and don't have any rights to it or any legal standing as to how that person spends the money if they should choose to. As someone else mentioned technically there may be tax to pay on the money you give as well and IHT issues if you're likely to die in the next 7 years.

Fair enough if you have a very trusting relationship with the other person... but there's still the question of tax evasion of course.

If you were to receive money back from the other person - your 'share' of any interest - then I would have thought technically that that money would have to be accounted for in any tax return you submit and as such you'd end up paying income tax on it anyway? I'm far from being a tax expert though (very far ).

End of the day is it worth the risk? Personally I wouldn't bother.

Pavlov_2

So it's a definate maybe / maybe not then.

Under those circumstances, no it's not worth the risk. I was just hoping that there was a more straightforward answer, and while I'm here, why doesn't the uk gov tax site have information about tax on giving gifts. It only talks about gifts from parents to children. Not very helpful.

Thanks for all these answers though.

RayWolfe

It's because there is NO tax on gifts. Difficult to draw up rules in those circumstances.