Unmarried couple investing £300K. Doesn't feel right to me.

TimMatthias

I have an unmarried cohabiting couple, where one has recently inherited from a parent and doesn't want to give anything to the other, but wants to take advantage of each of their ISA and Capital Gains allowance.

Simply put, they intend to invest £150K in each name using ISAs and GIAs and have a legal agreement drawn up to confirm everything belongs to the one individual.

I can't see anything to confirm that they can or can't do this. Am I being too cautious?

richardgough

Doesn't work.
The £150k is a gift (PET); the legal agreement makes it a GWROB. Legal ownership, based on the legal agreement, makes it the donor's asset, so it is a taxable entity. An ISA cannot be owned by anyone other than the named person setting it up.

Thought - retain £20k for this year's ISA; retain, say, a further £50,000 for GIA - moving to ISA over next 3 years and managed within CGT allowance; balance DofV into Disc Trust, utilise a bond wrapper; withdrawal in 4 year time to reinvest into ISAs. Something along those lines.

TimMatthias

@richardgough said:
Doesn't work.
The £150k is a gift (PET); the legal agreement makes it a GWROB. Legal ownership, based on the legal agreement, makes it the donor's asset, so it is a taxable entity. An ISA cannot be owned by anyone other than the named person setting it up.

Thought - retain £20k for this year's ISA; retain, say, a further £50,000 for GIA - moving to ISA over next 3 years and managed within CGT allowance; balance DofV into Disc Trust, utilise a bond wrapper; withdrawal in 4 year time to reinvest into ISAs. Something along those lines.

Thanks Richard.