To think we cannot accept rent via DC's bank account!?

[coucoululu]

DH and I have a flat that we would like to rent out. We understand rent will be a second income and so will get taxed as such.

DH is saying if we were to open a bank account for our 10 month old, it would be his income and will only get taxed after £12,500.

I highly doubt this is ok. I have had a Google and am sure it's not allowed.

The money ultimately would be for DC and maintenance of the property but even so.

Advice greatly appreciated. X

It's tax evasion. Just pay FFS.

Hilarious! Does he think Oxford University teaches law on tax that other university law courses do t? Some special insights only provided at Oxford?

You’ve got an idiot DH who can’t admit he’s wrong.

This made me laugh. OH & I are both accountants with his specialty being tax and he says pretty much word for word the same. Some of his clients drive him to distraction with the refusal to believe/follow the advice they are paying him for. His other favourite is when they say I’ve done “x” so how’s best to manage that for tax. Answer is invariably ask the question before you do anything.
OP - just tell your OH it doesn’t matter if it’s a clever idea or a stupid one as regardless it’s not allowed and will just lead to you ending up with a fine.

You might be able to legally save some tax by putting the property in a company, and running it that way rather than as your personal asset, particularly if you're higher rate tax payers. But whether that's a sensible option will depend on your particular circumstances, and your intentions for the property (length of time to hold, mortgage status, likely increase in value)

What your DH is proposing is illegal on several counts.

Talk to a tax specialist for permitted ways to reduce/offset what you owe.

I'm an Oxford qualified lawyer and you can tell DH he's stumbled upon a tax loophole only geniuses ever notice.

Definitely go ahead and do it; HMRC's view is basically that if you're clever enough to think of this ingenious scheme then you deserve to keep the money, so no issues there.

I'd be pouring him a cold beer for being such a smart boy!!

Please don't hurt his feelings by pointing out very easily Google-able points of law, it's not kind.

I had a landlord that did exactly this. He was dodgy as fuck in many other ways too. He was prosecuted for tax evasion and I was interviewed by HMRC when they investigated it. They went after him for every penny they could and made his life miserable. So no, it's not a good idea, your DH is very wrong.

I'm not surprised you're totally fed up now. Your husband sounds like a total twat. Whilst it was "an idea", it certainly wasn't a "good idea". And "Oxford qualified lawyer", oh my goodness, I think he means a tax specialist. He may think Mumsnet is stupid, but it seems he is more stupid than this internet forum.

Be careful with this prick, he clearly can't deal with being wrong, not the sort of thing you need to deal with in a partner.

First thought reading this thread was 'Ewww'; as PP have said, stop trying to worm your way out of paying what you owe. It's a crime, and when it's rental income it's bloody worse, and if you're going to break the law don't also be stupid enough to ask to advice on mumsnet (of all places!) for how to do it.

Your DP's attitude stinks and would give me huge ick quite frankly!

Yep, this

Something else your DH is obviously unaware of:

If you use a letting agent they automatically inform HMRC of who their clients are and which properties are being let.

Talk to an accountant who will be able to advise on how to (legally) minimise your tax liability. Landlords are also subject to some very specific laws so a letting agent would be able to advise and supply contracts and tenant vetting. HMRC will also help as most of their investigations deal with idiots making mistakes rather than out and out crooks.

If DH won't listen make the appointments yourself. Or is he worth going to court for?

😁

I'm on the "other side" to your OH, if you see what mean, but I will we all share similar experiences.

The worst is when it's family or friends. This is normally the conversation:
Them: I'm going to do a, b, c, so I don't have to pay tax
Me: That's not a good idea, and it wont work because tax law x, y, z
Them: You're wrong! My mate Paul told me he does it and it's fine
Me: Fine. Do it then. But when you and your mate Paul have to deal with HMRC and pay interest and penalties, do not come crying to me.^

It's always a bloody "mate" or" someone down the pub" who is giving out stupid tax advice. 😂

I scraped a Diploma of Higher Education from the Open University and even I can tell that your oh, so very smart husband is clearly suffering from a serious condition.

It's called being an absolute fucking imbecile.

Although it is sometimes possible to find loopholes and evade tax, that is usually the prerogative of the very wealthy. This idea is so obvious every landlord in the country would be doing it (advised by every accountant) if it was possible.

It’s tax evasion

just pay it

Being a qualified Oxford lawyer doesn’t exempt him from paying tax (or being convicted for fraud). Don’t do it!

🤣😂🤣😂🤣😂

You don’t need an Oxford qualified lawyer. Just a regular accountant who will tell you this is illegal.

That's tax fraud.
If you like the idea of jail time, go ahead and commit it.
Otherwise, pay your tax and stop trying to find ways to avoid it.
I hope you have a more ethical approach to how you treat your tenants than you do to paying for public services via taxation.

We have an accountant (and the tax partners at work) handle our tax affairs as my Cambridge qualified lawyer husband isn’t to be trusted with finding “loopholes”!

Tax bod here too. It’s quite a complex area - settlements legislation - but essentially anything received as taxable income over £100 per annum will be taxed on the parent. https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem4300

As an aside a minor cannot legally own property but an adult can hold the legal interest and the minor can have what is called the beneficial interest, i.e. the right to income or the proceeds on any sale.

Signed a non-Oxford grad (will Russell Group suffice?)

If MN had an award for “thickest partner of the day” your husband would have won it.

Jesus what a fucking bellend. Sorry OP, life must be quite a challenge for him you.

As the qualified tax experts have already said - let him go ahead.

This is a prime example of being unable to argue with stupid.

In his mind, he's unable to argue with the stupidity of MN.

Meanwhile, you're unable to argue with his stupidity (and massive ego and enormous ickiness).

I cringe for him, for you and your poor child.

I'm afraid I'm only a (non-Oxford educated) Chartered Accountant so can't possibly know as much as him. As a pp stated, there are very strict rules about how a child's income is treated for tax purposes. Trust income, some earnings from employment etc are ok, property income, savings transferred from parents etc, definitely not.

If this is how he usually reacts when you tell him "no, you can't do that", I suggest that you and DC move into the flat without him.

There are many legitimate expenses in letting out the property which can be offset against rental income. You might be surprised how much you can offset legally.

Otherwise, try DH's way, and keep looking over your shoulder for the day HMRC catch up with you..