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Where Taxpayers and Advisers Meet

BEST WAY TO PAY TAX FOR MY SONS INVESTMENT

BG123
Posts:4
Joined:Sun May 27, 2018 12:39 am
BEST WAY TO PAY TAX FOR MY SONS INVESTMENT

Postby BG123 » Sun May 27, 2018 12:46 am

Hi,

I retired a few years ago, I also ran my own company.
I gave my son some money to make an investment out of my companies account. It was a gift, not a loan, we didn't sign any papers agreeing to pay the money back or anything.

He's quietly confident that the investment will make him some money, he just wanted to know the easiest method for paying the correct amount of tax.

Will he need to file tax returns or would it be easier for the money to be taxed through my company?

Thanks

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: BEST WAY TO PAY TAX FOR MY SONS INVESTMENT

Postby AGoodman » Wed May 30, 2018 4:29 pm

Sounds like it is now his money so you need to pay tax on the distribution and he will pay personal tax on any profits of the investment. If it is an investment that will realise a gain (other than property) he would only be paying max. 20% CGT.

Gains made by a company are taxed twice - once to CT and then again on distribution.

BG123
Posts:4
Joined:Sun May 27, 2018 12:39 am

Re: BEST WAY TO PAY TAX FOR MY SONS INVESTMENT

Postby BG123 » Wed May 30, 2018 11:44 pm

Thanks so much for taking the time to reply.

Yep, he was planning on giving me the investment back plus the distribution tax. I'm quite elderly so I don't want him to be liable for IHT.

That would work, wouldn't it?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: BEST WAY TO PAY TAX FOR MY SONS INVESTMENT

Postby bd6759 » Thu May 31, 2018 4:49 pm

In what way have you accounted for the money in your company accounts?

BG123
Posts:4
Joined:Sun May 27, 2018 12:39 am

Re: BEST WAY TO PAY TAX FOR MY SONS INVESTMENT

Postby BG123 » Fri Jun 01, 2018 7:20 pm

Just as a gift to my son.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: BEST WAY TO PAY TAX FOR MY SONS INVESTMENT

Postby bd6759 » Sat Jun 02, 2018 10:34 am

Then you should be taxed on the money you have taken from the company.

BG123
Posts:4
Joined:Sun May 27, 2018 12:39 am

Re: BEST WAY TO PAY TAX FOR MY SONS INVESTMENT

Postby BG123 » Sat Jun 02, 2018 6:24 pm

Yep, thats pretty much how I had in head, just needed to make sure.
Thanks so much for all your replies


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