Tax Help

[Steve H]

As a self employed partner in a business I am always looking for legit ways to keep my money from Mr Darling. At present I have ISA's to full capacity but was wondering where I stand with investing money in my kids accounts. Are there any benefits in me saving my hard earned in my daughters accounts?
Steve

[wattsm666]

If your children are minors, under 18, then this won't work. It is taxable on the parents for this very reason!

[Steve H]

So, i am a 40% tax payer and self employed and so I have to advise my accountant of any interest earnt on saving every year. If I took some of tehse and put them in my daughters accounts (they are 5 and 3) surely I will not have to declare these for the "extra" tax???
is this right?
Steve

[Gravy]

Sorry to jump in here but I have a question relevent too.
If you have savings accounts, and you earn money in interest on these accounts, unless they are ISA's they are taxed anyway yes? So why does the Inland Revenue have to know how much interest you have earned on those savings accounts, if the tax has already been paid?

[wattsm666]

If you are a higher rate tax payer then you need to disclose on your tax return. Interest is taxed at 40% but only 20% is deducted at source.

Income that you minors earn would also need to be included on your return.

[northandy]

Gravy said:

Sorry to jump in here but I have a question relevent too.
If you have savings accounts, and you earn money in interest on these accounts, unless they are ISA's they are taxed anyway yes? So why does the Inland Revenue have to know how much interest you have earned on those savings accounts, if the tax has already been paid?

I think you only have a duty to inform them if the balance is over 10k.

Like someone else said Tax is deducted at base rate, if your a 40% payer you'd be liable for the difference

[Steve H]

Thanks Watts, that answers my question about savings in childrens name.
Steve

[Gravy]

Thanks, that clears that one up for me too!

[Eric Mc]

northandy said:

Gravy said:

Sorry to jump in here but I have a question relevent too.
If you have savings accounts, and you earn money in interest on these accounts, unless they are ISA's they are taxed anyway yes? So why does the Inland Revenue have to know how much interest you have earned on those savings accounts, if the tax has already been paid?

I think you only have a duty to inform them if the balance is over 10k.

Like someone else said Tax is deducted at base rate, if your a 40% payer you'd be liable for the difference

If you pay tax at the higher rate, then any other income you have which is taxed automatically at source will only have been taxed at 20% or 10% (or not at all in some cases).

Therefore, you MUST have additional tax liabiliuties arising and the way to ensure that they are properly declared is to complete a Self Assessment tax return.