Damion Yates

Just to follow-up here, where you say: "We can confirm that S28 TCGA provides that the time at which the disposal and acquisition is made is the time the contract is made." The contract is made once at the start of the year, setting up an ETP (employee trading programme) which states to sell the shares acquired as soon as possible on vest. Nobody can adjust or stop this, you're locked in. Can you confirm how this fits with the rules?

For others reading this thread, the answer above was for calculating the previous tax year (2022-2023). However if you're calculating this now to know how much tax to pay, then note that these limits have updated: https://www.gov.uk/guidance/pension-schemes-work-out-your-tapered-annual-allowance To summarise, tapering kicks in at incomes over £260,000 and is tapering away from a new high of £60,000 as the max pension contribution. This also now only tapers down to a minimum of £10,000. Remember that the carryforward varies historically each year this changed, so you had a £40k limit last year (minus taper), etc. Using a pension calculator is probably sensible (but see below). Referring to my original message, HMRC's online examples don't match a common pension scheme used by modern industries like Meta, Google, Morgan Stanley & Apple and probably a lot more. The one I work for uses (PwC) PricewaterhouseCoopers's pension calculator which was using the wrong rules (following the alternative pension style from HMRC's docs). Our finance department helped them correct this, so this is likely now safe for everyone in these industries in calculating the correct tax owed. Note that in these higher paying industries, where you have control over your pension contribution proportion, you can't adjust your own contribution up until your taper threshold limit rises.

Can you please clarify that on the gov.uk site "Interest on savings for children" https://www.gov.uk/savings-for-children That where it states: "The £100 limit doesn’t apply to money: - given by grandparents, relatives or friends - in a Junior ISA or Child Trust Fund" That it also includes a 16 or 17 year old's normal ISA too? Children that age can hold both Junior ISA and normal ISA at once, but I assume it would over-complicate the wording to have had to add this.

Sorry but to completely clarify my understanding, can you confirm this working example? If I pay in funds in May 2023, for example £100,000, every day the platform (Wise) shows a balance increasing by the daily equivalent of 5% annual interest. I then remove the funds in December which are £102,887 (I calculated the twelfth root of 5% for 7mo). This is £2,887 gained "interest" and ALSO a capital gain of £2,887 ? Assuming you've no more capital gains tax free limit left from other investments and are a highest tax bracket earner, this is 45% tax on 2887 and 20% tax on 2887 too, essentially 65% tax?

Can you confirm the type of tax liable on investments in the stock ticker (ISIN): IE00B43PVC83 "BlackRock ICS Sterling Government Liquidity Fund". This pays 4-5% "interest" as quoted on the investment platform. So this should seem fairly obviously just income tax. However their documentation, despite saying "interest" everywhere then adds that a "capital growth" is made, only when you "realise" the funds out of this investment and that you should pay the relevant GCT. It would be great to assume this is just invested and grows causing just CGT, as the rates are far lower and even has a tax free threshold. But I suspect this should be treated as income at your own rate. Or, worst case scenario, it's both income taxed and capital gains too! Can you confirm?

Thank you for your responses. For 1) I think we're in agreement that this is per child. The guidance can only be directed at 'a' parent because the tax liability for said parent who gifted the money is the one impacted by tax issues for a kid making more than £100 in gains from money *they* (individually) donated in that tax year (thanks for your confirmation on point 2) for the tax year boundaries. This will need added complication on keeping records, but it's worth it). 4) makes perfect sense. 3) This is confusing wording. When you say "is not applicable" do you mean is not applicable for any tax concerns on donated money? Also what is meant by 16 (cash) and 18 (stocks) ? JISAs can be either, and ISAs can be stocks, lifetime, cash or innovative finance. If a child is under 16 they can have an JISA which can be cash *or* stocks and this is covered in the webpage as not having tax liability if the funds that went into it came from a parent. If a child is 16 or 17 they can still have a cash or stocks JISA (or both), up to £9,000 between them submitted into them each tax year. However they can *also* open one instance various ISA types in addition to that, with a £20,000 submission per year in aggregate. I'm 99% sure that the webpage is simply remiss in adding (or ISA) when it says JISAs are exempt from tax. This needs escalating and fixing by HMRC. However in an abundance of caution for that 1% uncertainty I'm double checking the wording and understanding on this forum. I'm concerned when you say "not applicable" that you might be indicating that if a parent gifts money to a 16 or 17yo who then opens a cash or stocks ISA (assume they already filled up their JISA with 9k), then the parent has to somehow calculate the tax on the gains that the child is getting.

I'm not asking for any financial advice, I'm asking for clarification of the tax rules because the wording isn't clear. Assume I know my own savings tax liabilities, but there is a special exemption to what tax I pay when I gift that money to my kids. If a parent earns enough to need to pay 45% tax on any interest earnt, then gifts enough to their child enough money that the child makes £90 interest in a tax year, then according to https://www.gov.uk/savings-for-children this is fine. However if the child earns £101 then the parent that did the gifting needs to pay 45% tax on £101. My 1st question was: can I confirm this is per-child and per-parent? My 2nd question was: this to be calculated against only on money gifted within a tax year, or on all money that was ever donated over the years? My 3rd question was: The savings-for-children site says JISAs are okay. But doesn't mention ISAs. Are those also safe? My 4th question was: Do these rules only apply for children under 18 ?

[for the sake of simplicity don't mention IHT, I plan to live for the next 7 years] According to https://www.gov.uk/savings-for-children if a child makes more than £100 then *all* of that is suddenly now taxed at the income tax rate of the parent that gifted the money to their child. Firstly, can I confirm this is per-child and per-parent? I assume so as the wording is in the singular, but I want to double check here. In other words, my wife donates ~£2000 and I donate ~£2000 to a child with a 5% savings account and also the same amounts again to our other child. If they happen to make £201 interest as rates have increased, before the end of the tax year, we both pay our income tax rates on the whole amount? So we aim to keep them from earning that, or we lose 100s of quid. Secondly, is this to be calculated against only on money gifted within a tax year, or on all money that was ever donated over the years, like weekly pocket money? With rates high this is quite trivial, even at just £10 p/w pocket money for a few years. Thirdly, a parent can also donate a further £9,000 per year, per child into a JISA with no tax concerns. But can you confirm we can also donate £20,000 to a 16/17 year old into a normal ISA as well and the interest earnt there is also tax free for the parent? I'm 95% sure the answer is yes, but that webpage doesn't mention normal ISAs only JISAs. Finally, can I confirm once a child reaches 18 all of these rules go away and their own limits apply (£5,000 tax free interest earning for lowest earners, even if the money earning that interest was donated to them.

The description of calculating your Threshold income (for pension tapering), on https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm057100 and https://www.gov.uk/guidance/pension-schemes-work-out-your-tapered-annual-allowance does not make it clear what to do with your own contributions into a workplace pension. ptm057100 contains: 1. Start with the individual’s Net income (essentially the p60 figure for most PAYE people) 2. ADD The amount that would have been employment income but for the operation of a ‘relevant salary sacrifice arrangement’ 4. DEDUCT The gross amount of member contributions paid in the tax year using 'relief at source'. The question is what is a workplace pension scheme? i.e. Is it a salary sacrifice arrangement or relief at source ? If I look at the link for relief at source (https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief) it states this is for "some workplace pensions" and "your pension provider will claim it as tax relief and add it to your pension pot (‘relief at source’)" - this sounds like a specific kind of pension scheme where companies rely on the scheme to request back 20% from HMRC If you read the salary sacrifice arrangement link (https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye), it contains: below the heading "Examples of salary sacrifice" after which there is a section called "Workplace pension schemes" containing "an employer might agree to pay more than the minimum amount required, to cover some or all of the employee’s contribution. The employee may then become entitled to a lower cash salary" Up until now, for the past few years our financial discussion community where I work, has been confused by this wording and assumed that it was indicating you should add back your own pension contributions which had lowered your income (p60 figure) It makes sense that it shouldn't be possible to flip a switch for whether tapering kicks in, by simply contributing more (sacrificing your salary) and more until your Threshold limit falls under the point where you have to consider tapering. So we've assumed the pension scheme was a valid salary sacrifice arrangement, as such we should add back our own pension contributions to the Net to calculate the Threshold income. The Adjusted income is then the addition of the company matched portion of the pension. However the worked example: https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm057200 contains: "Jon is an employee..." "Jon has a salary of £112.000 and as a member of his employer’s pension scheme he pays 12.5% of his salary (£14,000) as member contribution." Full worked example: calculating threshold income "Step 2 Add the amount that would have been employment income but for the operation of a ‘relevant salary sacrifice arrangement’ Jon hasn’t entered into a salary sacrifice arrangement so there is nothing to add at step 2 in respect of a relevant salary sacrifice arrangement." ...jon hasn't entered into a salary sacrifice arrangement ?! There are some online calculators which appear to match the alternative understanding. That a workplace pension is a valid way of creating a lower Threshold income and thus switching when you are supposed to apply the tapering rules. Please can you confirm?

This document (HS281) contains "although you’re taxed separately, you may be treated as ‘connected’ with each other" and for gifts "Any amount actually paid is ignored". This would seem to imply an inherent assumption of joint capital gains on gifted shares. This is in line with everything I'd understood before. But importantly doesn't indicate evidence of this be provided. For the scenario I'm inquiring about, assets are held in my name and section 2 of HS281 adds "You’re chargeable to Capital Gains Tax if you dispose of an asset held in your name, unless you’re holding it on behalf of another person." - so if I gift half my shares to my spouse, this fits this description without my having to laboriously try and actually pass them to a separate brokerage firm. Further clarified with "If you’re holding an asset on behalf of your spouse or civil partner, your spouse or civil partner is commonly known as the beneficial owner and will pay tax if a gain is made from its disposal." The part under question is what if anything, is needed to report this? I would assume simply uploading a pdf letter explaining this for our tax returns should suffice right? There is a suggestion to use the "formal declaration about beneficial ownership using Form 17, ‘Declaration of beneficial interests in joint property and income’". However Form 17 is *only* dealing with a house and doesn't permit entering any form of formal declaration of gifting of shares.