View more on these topics

Advice that makes my heart sink

As a practising accountant and IFA, there are two expressions which make my heart sink: “I am going self-employed” (meaning that it is a disguised employment) and: “I am going to put it in the wife’s name” (meaning that it is a sham gift).

I am sorry to see that Sarah Anderson, solicitor in tax and pensions at Bond Pearce, in her article (Money Marketing February 8) careless in using the latter when advising upon tax-efficient investment among spouses.

It is perfectly possible for one spouse to gift sums to another, thereby enabling the receiving spouse to take advantage of Isa allowances, and indeed of income tax and capital gains reliefs, lower-rate and basic-rate tax bands and so on. But what is not permissible is to “put it in his or her name” which has an entirely different sense: “I am not really giving it, I am only putting it their name.”

There is a very real distinction which I have had to explain on several occasions over the years. Such a gift must not be a sham – the funds do genuinely have to be gifted one to the other, otherwise it is nothing more than a bare trust, that is, the receiving spouse is only holding the funds as nominee for the real beneficial owner – and engaging in a conspiracy to defraud the Revenue at the same time.

It is not unknown for the intending donor spouse, once confronted with the reality of the gift, to prefer to pay the tax.

When giving such advice, all IFAs should take particular care to choose their words carefully in case they are misunderstood.

AC Eggleton

FCCA, Dumfriesshire

Recommended

Dual rule will bring confusion

The news that the FSA is considering proposals to introduce two different regulatory regimes under the insurance conduct of business rules as part of its review of Icob has sparked protest from providers and brokers.

Is Treasury turning?

Brokers and providers that offered pension term assurance have been in suspended animation since the pre-Budget report crippled the product.Yet the latest rumblings from the Treasury suggest that PTA may not be facing extinction.It is understood to be consulting over proposals to allow people to take out PTA if they self-certify that they have some […]

Risk reassessment

We have become uncomfortable with risk but an element of it may be essential

10 September thumbnail

Johnson Fleming set to hold auto-enrolment support webinar

Two years since the process of auto-enrolment began, the looming re-enrolment deadline provides the perfect opportunity to assess whether the support you have in place, which may well have been hastily selected at the start, is fit for purpose. Johnson Fleming is holding a webinar on 10 September at 11:00 to discover the key issues and concerns you should consider when thinking about your current support options.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com