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

He sounds like he's got the gwumps! Did you forget to praise him for doing a great job of finishing his Coco Pops this morning?

considering the majority of people on this thread are not tax experts and considering legitimate tax aviodance measures are possible, then your Dh could be correct, personally the best advice is from a qualified accountancy or tax services, rather than joe public that think they know x buy just guessing (unless of course some have got a degree in tax / finance etc)

No you can't because the contract will be with you on account that 10 month olds can't sign legal documents!

If you had an 18 year old student and the house was in their name then they could legitimately collect the money

Guardianship and Trusts:

In cases involving property or financial matters for minors, legal mechanisms like trusts or guardianships may be considered.

A trust could be set up where the property is held in trust for the minor's benefit, managed by a trustee until the minor reaches the age of majority.

Parental Responsibility:

Parents typically have the legal authority and responsibility for their minor children.

Parents may act on behalf of their children in legal matters, but this authority may have limits.

As in an additional property, not your principal residence? They owe no tax, you probably do when it’s sold but otherwise not. Technically you can only have one PPR (principal primary residence) at any time so any property which is not your PPR will attract some CGT when sold (assuming it’s gone up in value more than you’ve spent on it). Example; you buy a house, live in it for 5 years and then buy another house and move into that one. You move your child into property 1 and 5 years later you sell it. I believe you would owe CGT on 50% of the gain in value, because it was not your PPR for 50% of the time you owned it. It’s worth speaking to an accountant about this, I’d say, since the numbers could be large. You can write of costs associated with buying it and improving it. Maintenance cost are usually offset against income but since you are not receiving rent I assume you can offset maintenance costs against CGT too but that’s worth checking.

@Trilateralcommission

But this isn't in a trust, plus to be legal you would need to demonstrate it wasn't set up to evade tax. I've set up discretionary trusts and it's not straightforward.

This isn't the big brain idea that your DH thinks it is.

Take comfort from the fact that your child at least has one parent with an IQ bigger than their shoe size.

So first he says you’ll get away with not paying tax up to £12.5K.

But now when confronted by the single GCSE dinner ladies actually quoting tax law and using long words like settlements, not he’s saying he knew that all along?

🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣

Course he did.

His comment about dinner ladies with one GCSE is proper woman-hating stuff, isn’t it?

Before he somehow conned you, he was a fully fledged incel, wasn’t he? Seriously.

@bobomo “I've set up discretionary trusts and it's not straightforward.”

When you say set them up, I think you mean typed them up? For your penis owning boss. You silly woman you!

OP, if your DH is so clever, get him to Google "parents receiving rents to child's account" or whatever potty idea he's had, to show how it can be done without its being tax evasion.

Don't hold your breath while he does this.

Seriously, if this was a thing, every landlord with children would do it. But it isn't so they don't.

He sounds massively up himself. Good luck having to deal with him on a daily basis. Get tax advice, obviously.

😂

Typed it up? Oof, no, I think when @bobomomo says she's set up trusts, what she actually means is she served the fish finger and chips to the penis owning boss
Silly silly women.!

seek professional advice, it may be possible to set up some sort of trust fund but I don't think there is any way to avoid tax which is paid to you on a property you own even if you wish to gift the money to your infant son.

& now he is dissing dinner ladies - a bigger fool than I thought at first.

hes hilarious next he'll be suggesting putting it in a dead persons name

I'm one of the dumb women on the Internet and i have no gcse. but if you own the flat and it is in your name then it is still your income even if you put it at someone else's account. Its like you telling HR your husbands account number. So can you claim that you haven't received salary from your employer cause it is not on your personal account?

If you decide to put the flat in your child's name, then that's a different story.

I have a STEM degree.

If he has form for lying about what he has previously said in order to avoid admitting that he was mistaken, then I repeat my suggestion that you and DC move into the flat without him. You don't need the kind of sociopathic man who won't apologise and will lie sooner than admit fault in your or your DC's lives.

Lol, he's said nothing of the sort! If you wanna call us dinner ladies there must be an easier way 😂😂

“I have a STEM degree.”

Sounds like a fancy way of saying you like flower arranging? 🤣

(I agree with you about OP moving into the property)

It’s tax evasion and the bank will notice it, unusual income into a child’s bank account will be flagged

@bobomomo there is no need for a Discretionary Trust.

The property would be held on Bare Trust for the minor child. Child has the beneficial interest, the parent still has legal title at Land Registry and signs on behalf of the child. The child is legally entitled to the rents.

The tax position is that even though the child is legally entitled to the rents, the rents are taxed on the parents under settlements legislation. Once the child is 18 or married if earlier, they are then taxed on the rents personally.

@Testina That made me laugh.

My friend's DH is a financial advisor and accountant who graduated from Cambridge, I'll have to ask him what he thinks. Bet he thinks it's a stupid idea too. He's very hot on people paying what they should.

STEM stands for Science Technology Engineering and Medicine. It's an umbrella term equivalent to "arts".

I don't want to give the exact subject as there's not many women in that field so it could be outing.