I have a client who is asking me to submit tax return as she is due higher rate tax relief and has not been getting it.
That bit I am fine with.
She is now asking me questions about money her 2 sons receive, they are 18 & 15 years old. Their father died in 2006 and was already divorced from their mother. He has left them money in the form of a trust fund. I have pasted the email she sent to me below.
The uk pension is paid to me to use for care of the boys. It is recorded on their tax certificates. The US pension was previously just kept in the bank and was invested and held in trust. After the divorce tho, £300 from each bank account came to me each month to help pay the bills, this was drawn from the uninvested part. The boys are 18 and 15. I have not mentioned this to HMRC since l understood you can transfer up to £3000 per year between family members?
Can anyone shed any light on this? Should she be paying tax on this? I found an article on Money Advisory Service website that seemed to imply that she doesn't need to pay tax on this but it wasn't all that clear.
Help very much appreciated as I have a meeting with the client on Friday after work
Elaine, I would honestly get her to see someone with proper knowledge on this particular issue. At the very least you could phone HMRC and get advice straight from the horses mouth, but I would be dubious about advising her if you don't really understand it.
