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Santander don't like savers much


Jim Davis
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I advised him to invest the money in property.

Meanwhile he will get some interest on the money sat in his savings account.

.........

Are there any tax liabilities for transferring the money to my son?

I hope not.

 

If you've taken financial advice, you'd know the CGT and income tax ramifications of:

Transferring the money, your son gaining interest on the money in a savings account, as well as the income tax and CGT liability from investing the money in property.

 

If you have transferred the money without taking financial advice: Oops.

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OP, you really should be taking some professional advice to help you with your plans. Lots of questions will be raised. It may cost you for an initial meeting (although a lot will do it for free) but would be worth it in the long run.

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To my house sale conveyancing solicitor I provided my paper driving licence,

 

You can exchange your paper-only driving licence for the photo card one, free of charge.

 

http://www.telegraph.co.uk/finance/personalfinance/11028839/Driving-licence-changes-what-do-paper-licence-holders-need-to-know.html

 

(You'll have to renew the photo card at least every 10 years though : current cost for renewal £20, though they do the initial exchange free.)

Since you'll need both a counter-signed photo, and to be exempted from the fee for a photocard replacement you'd have to do this by post rather than the online service.

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OP, you really should be taking some professional advice to help you with your plans. Lots of questions will be raised. It may cost you for an initial meeting (although a lot will do it for free) but would be worth it in the long run.

 

OP has been so advised, a number of times.

 

My perception is the OP likes to let situations develop they can then grumble about (financial advice, interest rates on savings, photo ID, interest rates on borrowing), instead of taking action to help themselves.

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My money is now in my Son's bank account. Nobody has complained or sent him or me

any kind of tax demand.

 

Why should anyone complain?.

 

The lack of a tax demand doesn't mean he won't be liable to pay the relevant tax, when it becomes due.

 

It isn't HMRC's responsibility to ensure he declares taxable income, it remains his responsibility to do so - even if they don't send him a notification that they want him to submit a tax return, or a 'tax demand'.

 

How much (if anything) he'll owe will be influenced by how much he invests, and how much he saves, and the income he gets from both.

 

For savings, tax depends on his Personal Savings Allowance (which itself depends on if he is a basic, higher, or additional rate tax payer), and how much interest he gets (which is no longer paid with basic rate tax already deducted).

https://www.gov.uk/apply-tax-free-interest-on-savings/how-much-tax-you-pay

 

Investment income is also taxable, and doesn't attract Personal Savings Allowance.

 

Have you told him he may now have to pay more tax?, and submit a tax return? (even if he didn't have to previously.........)

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OK Bazza so you are implying that I shouldn't invest in property but take advice from some

financial adviser. I think you are talking out of your a**. My first house cost me £7,300 and I sold

my last house for £250,000. Please explain why you think such an investment is so poor.

Edited by Andyorch
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OK Bazza so you are implying that I shouldn't invest in property but take advice from some

financial adviser. I think you are talking out of your a**. My first house cost me £7,300 and I sold

my last house for £250,000. Please explain why you think such an investment is so poor.

 

Where have I said you shouldn't invest in property?

 

It MIGHT be ideal for you, (although doing so through your son may have added a layer of complexity.....)

It might not be ideal ..... reasons why it might not be ideal include:

 

Does it fit with your desired outcomes? (are you looking for income? or capital growth of your portfolio?)

Are you looking for quick access to your funds (property can often be difficult to convert to liquid assets without paying a premium to do so)

Are you looking for a long or short term investment? (property is more suited to long-term ... short term, what if there is another 'property price crash'?)

 

Tax : property as a capital growth investment (rather than for a main residence) attracts CGT.

Property (to generate rental income) attracts income tax on rental income.

You have evaded answering about you and your son's new tax obligations....... have you reminded him of the obligations he is taking on?.

 

Moving to why "I think such an investment is poor" (which I never actually said, but lets look at if it is poor or not....)

Your first house cost you £7,300 in year and your new house (aproximately!) £100,000 in 2017.

How much is £7,300 in year when adjusted for the 'time value of money'? as you can't directly compare £7,300 years ago with £100,000 today ......

 

Also, are you comparing a house of the same size with a house of the same size?? You've downsized.

You need to be comparing a house of the same size / location / upkeep as your £100k house, and find the purchase price of that house in year . Factor in payments made on upkeep over the years, too.

 

Then compare that cost with the £7,300 you paid back then, adjust that difference for (the time value of money / inflation / FTSE 100 / cost of Mars bars / whatever you feel is the best way to compare like with like across many years.....) to give a present day sum, and compare that with the £150,000 you were left as proceeds of sale ......

 

That may show THAT HOUSE was 'a good investment' (with the benefit of hindsight), but that doesn't mean property is still a good investment for you, in the future....

 

For example, you didn't have to pay CGT (if it was a main residence). So, you can't imply that doing the same on non-"main residence" is as good a deal, as you need to factor in CGT.

 

You have said "I'm talking out of my a**".If you are being so superficial as to say "£7,300 has become £250,000 so that must be a good investment", without looking at the effects of inflation, how other investments have performed, and the effects of you downsizing, then I doubt that is an assessment you can reliably make, even before considering CGT on investment property, income tax on rental income, and if property is a good fit for

 

a) your desired level of risk and

b) your desired level of access to the money invested

 

Ohh, and I'm not a financial adviser (independent or 'tied'), Yes, an IFA might cost you a little, but not involving an IFA may end up costing you a lot .....

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