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  • FIRST POST
    • Robokid40
    • By Robokid40 6th Jan 18, 2:55 AM
    • 9Posts
    • 0Thanks
    Robokid40
    What if you invested on behalf of other people, will there be a problem??
    • #1
    • 6th Jan 18, 2:55 AM
    What if you invested on behalf of other people, will there be a problem?? 6th Jan 18 at 2:55 AM
    Suppose I invested 4k(on behalf of 4 people each contributing 1k each) and I recieved 40k return., thats a 36k capital gains profit but once distributed to the investors their returns would be lower than their capital gains allowance and so no one including me should have to be taxed.

    Theres a chance hmrc will know i received the 36k but they will not know it was an investment between 4 people and returned to them. will this be a problem/will i get penalised and expected to pay tax on the 36k gain or will they believe me if the other parties confirmed this was the case? is it something i just tell them if they contact me about it?

    thanks

    ps. sorry about my distasteful name i dont know what made me choose it when i opened this account long ago, have messaged admin to change it
    Last edited by Robokid40; 06-01-2018 at 4:07 AM.
Page 1
    • SuperHan
    • By SuperHan 6th Jan 18, 11:00 AM
    • 2,077 Posts
    • 1,233 Thanks
    SuperHan
    • #2
    • 6th Jan 18, 11:00 AM
    • #2
    • 6th Jan 18, 11:00 AM
    Do you have anything in writing to say that this was done on behalf of others?

    As you have effectively held the investments in bare trust, the beneficiaries (i.e. the people you have invested on behalf of) should be subject to the tax rather than you. However, this may be difficult to prove if there is no documentation supporting this from the time the investments were made.

    Who were you investing on behalf of? The above may not apply if it was for your minor children.
    • sheramber
    • By sheramber 6th Jan 18, 1:01 PM
    • 4,792 Posts
    • 3,591 Thanks
    sheramber
    • #3
    • 6th Jan 18, 1:01 PM
    • #3
    • 6th Jan 18, 1:01 PM
    Look into setting up an Investment Club.
    • 00ec25
    • By 00ec25 6th Jan 18, 4:02 PM
    • 6,517 Posts
    • 6,078 Thanks
    00ec25
    • #4
    • 6th Jan 18, 4:02 PM
    • #4
    • 6th Jan 18, 4:02 PM
    as above, there is a perfectly legal (and normal) way of doing that, but it does require the formality of an "Investment Club". I belong to one at work and we each account for our taxes individually, more here:

    https://www.gov.uk/tax-sell-shares/investment-clubs
    • Robokid40
    • By Robokid40 8th Jan 18, 1:08 PM
    • 9 Posts
    • 0 Thanks
    Robokid40
    • #5
    • 8th Jan 18, 1:08 PM
    • #5
    • 8th Jan 18, 1:08 PM
    Regarding setting up an investment club, can anybody give further information on what I need to do to make it official. The links provided dont say much besides referring me to get legal advice. All searches online show its very informal, dont say I need to do keep any official records just make some on paper for my own reference.
    • chrismac1
    • By chrismac1 8th Jan 18, 2:30 PM
    • 2,495 Posts
    • 1,478 Thanks
    chrismac1
    • #6
    • 8th Jan 18, 2:30 PM
    • #6
    • 8th Jan 18, 2:30 PM
    In my view a much better idea than sharing money around is sharing information. If I were going to have an investing club I would share information not money, that is where the arguments start.

    In a related field I was once a part of a successful sports betting syndicate. I was part-time as I had a full-time job, the three full-timers made between 50k and 100k per year from 2001 to 2005 when I left.

    I was doing tennis and rugby. Those guys knew my tennis and rugger made an average 5% profit margin minimum. The other guys would send me their stuff in other sports and on arbitrages.

    There were no arguments and we each invested 1,000 or so in a couple of programes to find good bets quickly which ended up more than repaying the investment. We booted out a few non-performing members along the way.

    Once you start pooling money instead of just information it all gets to be a hassle.
    Hideous Muddles from Right Charlies
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