How can we protect the cash we’re giving our son?

How can we protect the cash we’re giving our son?

We want to help out my son with a deposit for his first home and can afford to give him £50,000. The problem is that he is planning to buy with his girlfriend, so if they split up she could walk away with half the money we gave him for a deposit. How can we protect our cash?

Tracey Moloney
Fri, 11/01/2019 – 00:49


In order to protect the money, a deed of trust between yourselves and your son would need to be put in place along with a cohabitation agreement between himself and his girlfriend.

This agreement would make it clear if for any reason the parties separated, who would be entitled to what and how the assets would be split. It would include the fact that you gave him £50,000 in the event that the property is ever sold due to a breakdown in the relationship.

As a belt and braces approach, you would then sign a deed of trust with your son, which would show that the £50,000 was a loan and if for any reason the property is to be sold as a breakdown of the relationship that you would receive the £50,000 back.

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Schrodinger’s millenial: our problems are no easier or harder than our parents – they’re just different

Schrodinger’s millenial: our problems are no easier or harder than our parents – they’re just different

Edmund Greaves says life isn’t easy whether you’re a ‘boomer’ or young adult

Edmund Greaves
Fri, 11/01/2019 – 00:27


Pitting the fortunes of ‘boomers’ against those of millennials is a common practice in the media now  – but the challenges faced by both generations are not easy to compare.

In October, Moneywise, alongside its parent company interactive investor, published a detailed report on the state of the nation’s retirement finances – The Great British Retirement Survey. Its findings were very interesting, and I can highly recommend having a read.

One statistic that was thrown up in the results was that 51% of our respondents think that younger generations have it tougher than older people. I think this is a useful statistic as it demonstrates just how polarised the topic is. I would contend that us young’uns are no better or worse off than our forebears, just that we face a different set of issues.

It is true that it is tougher for young people to get on to the housing ladder these days, as demonstrated by the rising age of first-time buyers.

But people buying houses 40 years ago had to contend with something just as challenging – they could buy a house but they also had a stonking interest rate on the mortgage that sent their payments spiralling – that is if they had any kind of employment to pay for it.

We’re often told that young workers today are disadvantaged because they increasingly have to take zero-hours contracts, which strip them of stability, employer pension contributions and other workplace benefits. But while this is true, many will have benefited from this flexibility and the opportunity to work remotely, which didn’t exist 40 years ago.

However, some things used to be better for workers. Until the last decade or so, workers were likely to benefit from a final salary pension scheme. You know, one of those that had minimal risk attached to it and guaranteed a fat sum for the person in receipt.

Such generous schemes hardly exist today, unless you’re in certain FTSE 100 companies or parts of the public sector. And I wouldn’t bet on the government being able to honour those pension promises in 40 years’ time.

Nor, for that matter, maintain the state pension in its current form by the time I hit the age of 70. Good job I’ve got my modest defined contribution pension, eh?

Millennials are frequently told that we should be saving more to fund our retirements.

We’re told that our aspirations of homeownership and being able to retire one day are doomed because we would rather have another holiday in Ibiza or the latest iPhone than stick our money in a savings account where it will earn a measly 1.46% return.

While rates are this low it’s not hard to see why some young people prefer to see their favourite band at Glastonbury than earn a few pennies of interest on their savings.

I think that rather than complaining about the spending habits of younger people, older folk should be thanking us.

When millennials buy iPhones, it ultimately reflects in the share price of Apple Inc or whatever buzzy tech firm is top of the pops. In turn, that contributes to the growth of vast swathes of pension portfolios.

If we stopped buying PlayStations, clicking the Facebook ads or googling the nearest Apple store, guess what would happen? That’s right, the economy would suffer and everyone’s investments and savings would fall in value.

I recently saw an extraordinary piece of research that suggested that the past 10 years of sluggish economic growth in the West was because millennials were too parsimonious. That we weren’t spending enough. So which is it?

It is the Schrödinger’s millennial approach – simultaneously spending too much and too little.

We benefit from a world of technology, consumerism and access to all the goods and services one could imagine and hope to own.

When we buy them, we’re helping to fund everybody’s retirements. Can we please all stop with the finger-pointing and agree that our problems are no easier or harder – they’re just different?

Tree, turkey, tax returns? HMRC warns over Christmas filing

Tree, turkey, tax returns? HMRC warns over Christmas filing

More than 2,000 taxpayers used Christmas Day to file their returns last year but HMRC has warned against leaving it to the final few weeks before the 31 January deadline

Laura Miller
Fri, 11/01/2019 – 00:13


With less than 100 days left to go before the cut off, the tax office is encouraging individuals to get their self-assessment affairs in order to beat what it says is a rush over the festive period.

Submitting tax returns early can alleviate some of the last minute stress associated with filing while also preparing for Christmas and New Year.

Angela MacDonald, HMRC’s director general for customer services, says: “The deadline for completing self-assessment tax returns is less than 100 days away, yet so many of us wait until January to start the process. 

“Avoid the last minute rush by completing your tax returns on time and then enjoy the upcoming festive period. Starting the process early and giving yourself time to gather all the information you need will help avoid that stressful, late rush to file.”

Most UK taxpayers have their taxes deducted at source from their wages. Everyone else – the self-employed, business owners, or those with additional untaxed income – must submit a self-assessment return each year.

As well as those groups, anyone liable for the High Income Child Benefit Charge – those with income over £50,000 who receive child benefit, or whose partner gets it –  may need to file a tax return. 

The deadline for submitting paper tax returns is 31 October 2019 and 31 January 2020 for online versions. Late submissions can attract a £100 penalty. Any tax owed must be paid by 31 January 2020. 

5 self-assessment slip ups to avoid

Hargreaves Lansdown, the investment firm, has compiled a list of the most common mistakes taxpayers make when filing their tax returns – which can be all the more likely if it is done in a rush in between opening presents and Christmas dinner.

1. Forgetting pension tax relief

Higher-rate taxpayers are entitled to 40% tax relief on pension contributions. Savers into trust-based workplace schemes get the full 40% automatically, likewise if you pay pension contributions through salary sacrifice.

However, group personal pensions, group SIPPs and stakeholder pensions, where contributions are paid out of taxed income, are treated in the same way as personal pensions: you automatically get tax relief at 20%, and need to reclaim the difference on your tax return.

Use gross contributions on the form – the total of everything you paid in, plus tax relief at 20%.

2. Not claiming gift aid

Basic rate taxpayers usually get this automatically by ticking a Gift Aid box – so if you make a £10 donation, the charity gets £12.50.  If you’re a higher rate taxpayer, you’ll need to reclaim the rest through your tax return.

3. Holding too much cash

Make a charity donation now and you can claim it on your tax return for 2018/19. This is particularly useful when you’re a higher rate taxpayer in one year, and a basic rate taxpayer the next. 

Enterprise Investment Schemes also offer 30% tax relief – which can be claimed on this tax return against income for 2018/19. 

4. Neglecting to divide joint accounts

If you have a joint stocks and shares, when you do your tax return, split the total dividends by the number of account holders, and each put it on your own return. This may help you stay below the £2,000 dividend allowance that kicked in in 2018/19.

5. Failing to fix mistakes on previous years

If you realise you’ve made a mistake on past returns, you can claim a refund for the past four years. Write to HMRC making a claim for ‘overpayment relief’, include proof that you’ve paid the tax, confirm you’ve not already reclaimed it, and add a signed declaration saying that the details are correct and complete.