Cinnamon Posted January 31, 2007 Share Posted January 31, 2007 I know some of you out there are financial whizzes, & I need some advice. The In-Laws want to gift to us a fairly large sum of money & we need to know the best way to go about it,avoiding Tax if at all possible. Can it be gifted to the children,who as non-tax payers will avoid a tax penalty? How about Premium Bonds? We intend to either sit on the money for at least 10 years, or possibly buy an overseas property in the near future............... Any ideas/help??? Quote Link to comment Share on other sites More sharing options...
Popcorn Posted January 31, 2007 Share Posted January 31, 2007 How about an ISA Sarah? Quote Link to comment Share on other sites More sharing options...
Egluntyne Posted January 31, 2007 Share Posted January 31, 2007 You took the words out of my mouth Gina. Quote Link to comment Share on other sites More sharing options...
Popcorn Posted January 31, 2007 Share Posted January 31, 2007 I was hoping you wouldn't notice Quote Link to comment Share on other sites More sharing options...
Cinnamon Posted January 31, 2007 Author Share Posted January 31, 2007 Yes, an ISA is something we are thinking about. Decisions,decisions... Quote Link to comment Share on other sites More sharing options...
SarahJo Posted January 31, 2007 Share Posted January 31, 2007 I agree ... ISA or a high income yield bond, where you reinvest any interest made. The ISA's have a maximum start amount ... but then you can add in £1000 in total each year (I think) tax free, whether as another lump, or in bits totalling 1000. Check the Martin Lewis financial site ... I think there is a link on one of One Manned Banned topics where Andrew clawed back penalty fine money from the bank. . Quote Link to comment Share on other sites More sharing options...
Tina C Posted January 31, 2007 Share Posted January 31, 2007 How lovely for you to recevie a 'windfall' - but it is a bit of a responsibility as well, trying to invest it wisely. ISAs are good but there is a limit to the amount you can invest in one year. We have just put a couple of thousand pounds in Premium Bonds for Layla. She won't get the interest she was getting when it was in the building society but she won't lose her capital and she could get so much more (we hope). I have to say I would tempted by the overseas property, if you don't need access to the money. There would probably be tax implications when you sell it though, either here or in whatever country you choose. And if you choose well you could get an income from it. Or you could just find something that all the family can use for holidays and hope that it appreciates in value by the time you do want the capital back. Good luck! Quote Link to comment Share on other sites More sharing options...
buffie Posted January 31, 2007 Share Posted January 31, 2007 I know a safe place to keep it Sorry not got any good advice but everyone seems to have some good ideas Sarah BBx Quote Link to comment Share on other sites More sharing options...
Guest Posted January 31, 2007 Share Posted January 31, 2007 I don't think children are non tax payers are they? It's just they don't usually have the sort of money that requires being taxed. I could be wrong! I'm a non tax payer too because I don't ever go over the threshold. Quote Link to comment Share on other sites More sharing options...
Tina C Posted January 31, 2007 Share Posted January 31, 2007 I believe children do have to pay tax if the interest they earn goes over a certain amount - which is why we shifted some of Layla's money. But kids (sorry children) can't hava an ISA because they aren't taxpayers. Its very confusing. I think some of the rules are designed to catch out tax dodges by parents investing in their childrens' names. I have just had another thought - you need to be careful about this anyway because there may be a problem with inheritance tax, which is what I am guessing your in-laws are trying to avoid. I can't quite remember how it works though. If it is a substantial amount you should seek out proper advice - your bank may be able to help. Quote Link to comment Share on other sites More sharing options...
Guest Posted January 31, 2007 Share Posted January 31, 2007 If the parents die within 7 years of the gift, you are liable to pay inheritance tax. I think this is outrageous. I can understand the tax-dodge issues but 7 years seems way over the top. I also think inheritance tax is totally outrageous anyway. Why shouldn't parents leave money for their children? It's already been taxed anyway. And it's done on the total amount, not the individual gifts. So when OH lost his parents, a substantial amount of their estate was lost to tax even though it was being shared by 4 children. So the individual amounts weren't very much at all and the tax man probably got more than anybody! Quote Link to comment Share on other sites More sharing options...
Louise Posted January 31, 2007 Share Posted January 31, 2007 That is true about inheritance tax I live in fear of anything happening to my dad for more reasons than the obvious one He doesn't look after himself and 3 and a bit years ago he bought my ex's share of my house but it is in my name so technically he gifted the sum of money too me Quote Link to comment Share on other sites More sharing options...
Cinnamon Posted January 31, 2007 Author Share Posted January 31, 2007 Agreed Ginette. What has happened is this. Brians Grandmother is no longer capable enough to live on her own,so is coming to live with his Father,Mother,Sister,Hubby & their children. Rather them than me,to be honest, as we have never seen eye to eye. So, Brians Dad is going to sell her house & split the proceeds between her Grandchildren. We can each (all 4 of us,including the children) be gifted £7000,& as Ginette says if the in-laws live another 7 years then we won't need to pay any inheritence tax. This can also be back dated to cover the full amount,if needs be. We can get a couple of ISAS, & will maybe put the rest into premium bonds. An overseas property is a real possibility though, as we have always intended to move "somewhere" one day.So why not buy now,somewhere run down which we can slowly do up, with a view to a premenant move in a few years time? You lot can all use it of course Quote Link to comment Share on other sites More sharing options...
chelsea Posted January 31, 2007 Share Posted January 31, 2007 If the parents die within 7 years of the gift, you are liable to pay inheritance tax. I think this is outrageous. I can understand the tax-dodge issues but 7 years seems way over the top. I also think inheritance tax is totally outrageous anyway. Why shouldn't parents leave money for their children? It's already been taxed anyway. And it's done on the total amount, not the individual gifts. So when OH lost his parents, a substantial amount of their estate was lost to tax even though it was being shared by 4 children. So the individual amounts weren't very much at all and the tax man probably got more than anybody! I totally agree with you on this one. Inheritance tax is CRAZY...people work hard all their lives and want to share it...and yet again they are taxed, when they've paid tax on their earnings already. TAX TAX TAX.. GRRRRRR Quote Link to comment Share on other sites More sharing options...
myles Posted January 31, 2007 Share Posted January 31, 2007 Sarah, Take proper advice, I know the seven year ruling exists, but you have to watch out for being done for tax avoidance you have to get it right. You really need to pay for advice, As for what to do with the money, consider buying a second home hear, to avoid different country taxation problems, when you need to release the capital You could a house to rent out or a holiday home by the sea Anne Quote Link to comment Share on other sites More sharing options...
buffie Posted January 31, 2007 Share Posted January 31, 2007 Know a great financial guy in Gerrards Cross Sarah, not that far away. I can get his number for you and you can see if he can help you. Just helped our friends with redundancy monies ( they live in Maidenhead) and we have used him for years, even living in Wales BBx Quote Link to comment Share on other sites More sharing options...
Cinnamon Posted January 31, 2007 Author Share Posted January 31, 2007 Thanks A friend of mine has passed her financiers details onto me,but a back-up would be great Buffie if you wouldn't mind letting me have his phone number. We need to sort out our mortgage soon too & I have no idea where to start on that one Quote Link to comment Share on other sites More sharing options...
buffie Posted January 31, 2007 Share Posted January 31, 2007 He is very good, Mikey is away tonight but I'll get it to you as soon as I can, most probably friday now, BBx Quote Link to comment Share on other sites More sharing options...
ubereglu Posted January 31, 2007 Share Posted January 31, 2007 If I were you I'd find the number of an independent financial advisor. I don't think you have to pay them, as they get commission off the products they advise. They're very useful and most of them do home visits too-in the evenings, or whatever time you want. They'll help you out and go through all the loopholes you can follow. Quote Link to comment Share on other sites More sharing options...
buffie Posted January 31, 2007 Share Posted January 31, 2007 Ours is, he has such high recommendation locally and all our friends now use him. BBx Quote Link to comment Share on other sites More sharing options...
Charlottechicken Posted January 31, 2007 Share Posted January 31, 2007 Check here for Inheritance tax rules: http://www.hmrc.gov.uk/cto/iht.htm I have a mini cash ISA, as they are very safe, just a high interest account with no tax deducted really and no stocks and shares like an ordinary ISA. You can invest up to £3000 per year in one, and you can start one for as little as £1, depending on where you go. You can only have one mini cash ISA (they need your National Insurance number when you apply), and your combination of ISA products cannot exceed £7000 saving in one year. You are also allowed one 'friendly society' savings account investment of £25 per month tax free as well. Quote Link to comment Share on other sites More sharing options...
