Using parent's account to avoid DIRT

S

Sean Lawlor

Registered User
Messages
7
My elderly mother has low income and is exempt from DIRT.

If I lodge my savings in her account and she gives me all the interest (on which no DIRT has been paid!) can the Revenue come after us?
 
I sure hope so! You are suggesting tax evasion, and you want to involve an elderly woman in your scheme.
 
Sean -what you meant to say is this ;-

Is it O.K. if I lend my Mum some money which she will later return ?
Can she do with it as she likes ?
Can I receive small monetary gifts from my Mum every year tax-free(e.g 3k). ?
(These gifts have,of course, nothing to do with my loan to my Mum)

I'm not tax expert but I imagine the answer is yes to each question.

P.S. Any money in her DIRT account can't be accessed by you in the event of her death.You'll have to wait till probate and hope it hasn't gone to the Dogs Home.
 
Wow. Just wow. Are you really asking about how to implicate your Mum in carrying out tax evasion, on a public forum, using your real name?! (Hint - people who work in Revenue also use Internet forums...)

Yes it's tax evasion, and it's still tax evasion, or at the least aggressive tax avoidance, even if you indulge in Oldnick's suggestion.
 
cashier said:
DIRT is currently charged at 33% on a person's savings, I personally think this tax is far too high and there really isn't much of an incentive for peopel to save because of it.
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Government and business would rather we spend.
 
mandelbrot said:
Yes it's tax evasion, and it's still tax evasion, or at the least aggressive tax avoidance, even if you indulge in Oldnick's suggestion.
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Well if it's avoidence that's ok then as that's not illegal.

Evasion is a different matter.

Not sure if aggressive avoidence is ok? This was in the news recently in the UK for Starbucks/Google etc.
 
Thanks for the replies.

My question was really whether it would be interpreted by Revenue as evasion or avoidance.

The issues raised by oldnick and cashier re getting my principal sum back can surely be avoided by having a loan agreement i.e she owes me the money and that is paid from her estate before distribution (to the Dog's Home!). It also means it is not subject to CAT.

Re the comments of pagraigb and mandelbrot, is it really much different to say, transferring shares to a spouse to avoid income tax?
 
Sean Lawlor said:
The issues raised by oldnick and cashier re getting my principal sum back can surely be avoided by having a loan agreement i.e she owes me the money and that is paid from her estate before distribution (to the Dog's Home!). It also means it is not subject to CAT.
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Nothing is "sure" in the context of either: (1.) court proceedings in the case of a disputed will; (2.) a Revenue CAT audit where the Inspector prefers to treat the entire sum in your mother's bank account as hers, and accordingly charge you with 33% CAT on it.
 
You can see all the elements here:

- Clever scheme (oldnick)
- guilty of tax evasion - immediate execution

H/ever if you lodge money in her sole account (you wont get the exemption for a joint account) then legally it is hers. Unless there is a reasonable amount I wouldn't bother. If its a lot and is in her sole name - what will you do to get it back?

Far better to do a covenant.
 
Sean Lawlor said:
...
Re the comments of pagraigb and mandelbrot, is it really much different to say, transferring shares to a spouse to avoid income tax?
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Yes.

In general, a married couple can hold their assets in common and they can freely treat a particular asset as the property of one or the other or both.

In the scheme you describe, you would retain beneficial ownership of the asset, and you would receive the income from it. In effect, the appearance that it is her account and her income is a fiction, and it is a faction created for no other purpose than to avoid paying tax.

[The phrase "just resting in her account" comes to mind.]
 
Back in the days it was possible for an Irish person to have an account in Ireland using an Irish address but have the interest posted overseas to a non resident. The interest could be paid DIRT free as it was leaving the country.
 
Bronco Lane said:
Back in the days it was possible for an Irish person to have an account in Ireland using an Irish address but have the interest posted overseas to a non resident. The interest could be paid DIRT free as it was leaving the country.
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So... tax evasion then?
 
Whats interesting here is that a truck load of Bonds - bigger than you'll ever imagine -
have their interest paid GROSS and to ANONYMOUS holders outside the country.

And .. that is legal?
 
WizardDr said:
Whats interesting here is that a truck load of Bonds - bigger than you'll ever imagine -
have their interest paid GROSS and to ANONYMOUS holders outside the country.

And .. that is legal?
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How do bonds work? Let's say I had a couple of hundred grand in untaxed income, how would I get it invested in anonymous bonds?
 
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