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

Same here, we have had clients move to new accountants (usually friends/family) as they don't like how much tax we tell them they owe. They often come back to us when their friends/family don't actually know what they are doing and have resulted in them getting fines etc.

@OP - not an Oxford lawyer myself but have Dc who is , who agrees with me - what you need as others have said proper accountancy advice. Don't mess about with HMRC - tax evasion is serious and can end up with a custodial sentence. But as long as Dh says it's fine Hey Ho. If he ends up incarcerated I am sure MN will chip in to send him a card.

This reminds me of the thing ( does anyone remember ) where the chap - who I think was well meaning asked if he could help any Mums with computer literacy. I still laugh now at the woman who was a senior IT specialist who replied - Oh thank God you're here - I have just been bashing my tits on the keyboard and hoping for the best.

Honestly I would I would just say to Dh - you had an idea - it just wasn't a good idea. Now let's do it properly.

Oh boo, I only went to Cambridge :(

Eww his stupidity would give me massive ick. Tell him to see an accountant if he really wants to evade tax that badly.

😂😂😂

the chap - who I think was well meaning asked if he could help any Mums with computer literacy. I still laugh now at the woman who was a senior IT specialist who replied - Oh thank God you're here - I have just been bashing my tits on the keyboard and hoping for the best.

I'm memorising that for future use.

Although maybe you keep quiet and let him do it - if he gets thrown in jail at least you get away from this horrid man…

Let him go ahead. At least you’ll get a break from the arrogant man child while he’s in prison.

I think he means an accountant. He doesn't sound very clever.

Original thread: https://www.mumsnet.com/talk/parenting/2307274-I-am-everything-you-hate-about-people-on-the-internet-I-am-here-to-help?reply=52533449

I did no maths after age 14 (yes I'm very old). But I am shocked how uninformed your DH is - any brief online search will set him straight. People will laugh in his face!

@gardenfoundry just won’t do - for Dark Deeds you need Dark Blues, not people who shed light on matters & provide quality booze 😉

Your DH’s suggestion is as stupid as me setting up a bank account for the the mouse living under my garden deck and sharing my self employed income with it to halve my tax bill.

If the investment is for the child, one option would be to buy a btl under a limited company / SPV, and give your child shares in it. Will be a bit easier tax wise, especially if you are higher / additional rate tax payers.

This made me laugh immensely. Thank you.

@haXXor - thank you for that , I misquoted but I think I got the gist. I have just read that thread again and hooted with laughter. I love the woman also with her proper programming said - oops - I meant to say handbags.

Thank you 😂

Perhaps DH should look up the four Levels of Competence - your DH is on level 1, Unconscious Incompetence.

Tax evasion, if you don’t want to pay tax sell the property and don’t rent it out. It’s that simple.

Can only imagine what other shortcuts he would take whilst being a landlord....

Can I ask here, if you own a house and your adult child lives in it without paying rent, are you , or they, liable for any tax, other than when it's sold?

go for it, judging by how poorly our own government handles money it's better in your pocket than theirs

Tax on rent is declared and paid by the owners of the asset, in the proportions they own it. If you want you child to have the income they also need to own the asset. There are many practical and moral problems with your husbands plan.

@coucoululu Hope this helps

In the scenario you described, it seems that your husband is considering opening a bank account for your 10-month-old child, intending to declare the rental income from the flat as the child's income, with the expectation of benefiting from the personal allowance (currently £12,500 in the UK) before any tax liability arises.

It's important to note that tax laws can be complex and subject to change. In the UK, tax authorities may scrutinize arrangements that appear to be artificial or designed solely to avoid taxes. The concept of "kiddie tax" or taxation of income generated for minors exists in some jurisdictions, including the UK.

Here are a few considerations:

Legal and Genuine Transactions: Tax authorities generally distinguish between legitimate financial planning and arrangements that are created solely to avoid taxes. If the arrangement is genuine, legally structured, and not devised to deceive tax authorities, it may be considered legitimate tax planning.

Purpose of the Arrangement: If the primary purpose of the bank account and income declaration is to genuinely provide for your child's future and support the maintenance of the property, it might be more defensible from a legal standpoint.

Anti-Avoidance Legislation: The UK has anti-avoidance legislation in place to counteract arrangements specifically designed to reduce tax liability. If tax authorities believe that the arrangement is artificial and structured only to avoid tax, they may challenge it.

Professional Advice: It's advisable to consult with a tax professional or legal advisor who can provide personalized advice based on your specific circumstances. They can assess the legality and potential implications of the proposed arrangement.

In summary, while tax planning is legal and common, it's crucial to ensure that any arrangement is genuine, complies with tax laws, and is not designed solely for tax avoidance. Seeking professional advice will help you make informed decisions and navigate the complexities of tax regulations in the UK.

We had a massive fight.

He said I believed dinner ladies on the internet with 1 GCSE over him.

He also said he wasn't wrong. That we can do it in DC's name it's just that we are still liable to pay the tax so it wouldn't make sense and to just do it the normal way ie. Pay the tax as you have all described

Bloody cheeky man. He comes up with a stupid idea and then when we say it's a stupid idea he says we are stupid.

Is drink involved?

@Jellybean23 I do think there is a saying that the most dangerous people who don't know what they don't know.

@coucoululu - please don't get inveigled into his batshit ideas. Take proper advice. Otherwise I am sure MN can do a short go fund me for a little card with unicorns and flowers and glitter and shoes and handbags on it to wish him well for his 5 stretch in chokey. I don't mean to take the piss really but tax is something you really have to take proper advice on because evasion is serious. & just ignoring MN advice where people very often know what they are talking about because you think you have found a loophole I think is bonkers , unless you have taken proper advice.