Self employed

jimmyburg

Hello im self employed, Im still living at home, and my
father wants to give me a lump sum of money to save
(15 - 20K), before i get married next year, the problem
is how or where do i put it without declaring it for tax,
yes ive got an isa,

any thoughts?

Thanks

ThriftyBeanie

Max out your ISA if not already done so, assuming your ISA returns more than the net of tax interest available elsewhere.

Put the rest into the highest rate savings account you can find and pay tax like everybody else. Tax evasion is illegal and no responsible member of this forum will advise you on how to do that.

Lavendyr

You can invest £15k per issue in NS&I Inflation-linked certificates and they are tax free. I don't know whether you have to declare them though.

http://www.nsandi.com/products/ilsc/index.jsp

mpg

ThriftyBeanie wrote: »

Tax evasion is illegal and no responsible member of this forum will advise you on how to do that.

Tax evasion IS

But Tax Avoidance isn't and thats what the OP was asking

ThriftyBeanie

mpg wrote: »

But Tax Avoidance isn't and thats what the OP was asking

Wrong.

OP wants to not declare income for tax. Non declaration is evasion, not avoidance.

jimmyburg

thanks for the replies,
my father has paid tax on it as its sitting in his account, im not trying to escape paying tax, my only question is,
As im self employed will that be counted as earning money eg 20% taken off me from a gift from my father. if i put it into my account.

ThriftyBeanie

Ok, for the income you earn from the investment of the capital, you will be liable to income tax at your highest effective rate.

But as far as the capital is concerned, there is no income tax implication of the gift from your dad. But there may be some inheritance tax issues to be aware of.

Basically, if your dad survives 7 years after making the gift, there will be no charge to IHT. But just in case the worst should happen, it might not be a bad idea to structure the gift as efficiently as possible. For example, if your mum and dad are still together, your dad could gift half of it to mum, for mum to then gift to you. (There is no IHT between spouses). Then each of your mum and dad could gift £3k to you using their annual exemption. The remaining capital could sit in an account of their own, earning taxable interest for them. Then, on the occasion of your wedding, they could each make you a gift of £5k using the parental wedding gift exemption.