Quick tax question
15 March 2007, 05:02 PM
#1
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Quick tax question
Can my mother and I transfer funds between each other without any tax implications? ie can I put my savings into her account for 6 months and then take it back again without any tax liabilty? Obviously during that time their will be tax on the interest, but we won't be liable for income tax or cgt will it?
Many thanks
Many thanks
15 March 2007, 05:43 PM
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Do you want theory or practice ?
Theory - Once she's paid you back it's very transparent what you've been doing & you'd be liable for tax throughout
Practice......how the hell would they uncover it.... do it & keep your head low !
(No CGT implications on the pure transactions between you.)
D (with a very wealthy 5 yr old son !)
Theory - Once she's paid you back it's very transparent what you've been doing & you'd be liable for tax throughout
Practice......how the hell would they uncover it.... do it & keep your head low !
(No CGT implications on the pure transactions between you.)
D (with a very wealthy 5 yr old son !)
15 March 2007, 05:51 PM
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Do you want theory or practice ?
Theory - Once she's paid you back it's very transparent what you've been doing & you'd be liable for tax throughout
Practice......how the hell would they uncover it.... do it & keep your head low !
(No CGT implications on the pure transactions between you.)
D (with a very wealthy 5 yr old son !)
Theory - Once she's paid you back it's very transparent what you've been doing & you'd be liable for tax throughout
Practice......how the hell would they uncover it.... do it & keep your head low !
(No CGT implications on the pure transactions between you.)
D (with a very wealthy 5 yr old son !)
Just wanted to make sure that when I took it back it wouldn't be classed as income(or cg) and suddenly find I'm hit with a 40% tax bill on my entire savings!
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15 March 2007, 11:20 PM
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Can my mother and I transfer funds between each other without any tax implications? ie can I put my savings into her account for 6 months and then take it back again without any tax liabilty? Obviously during that time their will be tax on the interest, but we won't be liable for income tax or cgt will it?
Many thanks
Many thanks
15 March 2007, 11:59 PM
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Technically, if the two transactions are considered as gifts in different tax years you should pay tax on the return of the money as income. If you were to loan her the money and she repaid the loan after 6 months, then she would be liable for tax on the interest and you would be liable for tax on the capital gain when she repaid it. Definitive answer depends on the amount of 'loan', her tax status and the interest rate.
16 March 2007, 09:02 PM
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Technically, if the two transactions are considered as gifts in different tax years you should pay tax on the return of the money as income. If you were to loan her the money and she repaid the loan after 6 months, then she would be liable for tax on the interest and you would be liable for tax on the capital gain when she repaid it. Definitive answer depends on the amount of 'loan', her tax status and the interest rate.
Hiya. Just as an example (not real amounts)
I, in 40% tax bracket, give (gift or loan) my mum £100,000. 6 months later I take it back. Mum has £0 other income apart from state pension.
In that 6 months the £100,000 makes £3k in interest
All done in same tax year.
What is the tax liabilty?
Many thanks
20 March 2007, 02:06 AM
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