Poker Accounts and Inheritence tax

[Sark79]

I was listening to a radio show today that explained how inheritence tax works. There was a guy from a leading financial company who used a case he was dealing with to explain how it all works.

In his example, he refered to an old couple who wanted to leave their house and assets to their son. However, after the  inheritence tax vultures had got their claws onto the money. The son would actually end up with only a few thousand for his inheritence.

I know you are allowed to give a cash gift to family members as inheritence provided you don't die within 7 years. Ok, this isn't strictly inheritence because the person giving is still living.

My question is, what is to stop a person opening a poker account and depositing a sum of money. Lets say £50,000. Then a family member also opening an account at the same site. Then making a money transfer from one player to another.  Are you following?.. sorry if my explanation is bad

Would this work?..   and would this prevent the need to pay costly legal and tax bills?

[M3boy]

Ssshhhhhhhhhhhhhhhhh!!!!  lol

However, if the Revenue decided to look into the affairs, they would certainly question as to what the £50k spend was in the first place. As for how far they could trace this - at the moment, I doubt they could.

[Robert HM]

Proper Tax planning is classed as "avoidance" your plan is "evasion" and a naughty.

The 7 year requirement is not mandatory, you are allowed to die if you wish.

[RED-DOG]

Money transfers on poker sites are not automated, they are looked at and then either approved or declined

I think the site would question such a large amount

[MrMoves]

Tranfers are checked.  Party Poker, for example, require you wager 25% of the transferred funds in raked hands before you withdraw.

If someone sends you $20,000 you'll have to play 5000 raked hands before you can get the money.

[AndrewT]

Looks like you can't pull the plug on Granny yet, Sark

[Sark79]

Looks like you can't pull the plug on Granny yet, Sark

lol, hey I am a nice guy. wouldn't dream of it.

I just thought I had found a fault in the tax system. Damm, I was going to do research and write a book about how to fiddle the tax system.

Just looks like I will have to earn my millions at the W.S.O.P in 2010 instead. 

[matt674]

The 7 year requirement is not mandatory, you are allowed to die if you wish.

Phew - will sleep easier tonight knowing that......... actually on second thoughts maybe not!!

Tranfers are checked.  Party Poker, for example, require you wager 25% of the transferred funds in raked hands before you withdraw.

If someone sends you $20,000 you'll have to play 5000 raked hands before you can get the money.

Dont do it on a transfer - just sit down with the same opponent 10 times at the $5000 heads up sit and go table on pokerstars and lose, sure you'll lose about $1000 in rake but its probably cheaper that the amount you'll get taxed............

[RED-DOG]

The 7 year requirement is not mandatory, you are allowed to die if you wish.

Phew - will sleep easier tonight knowing that......... actually on second thoughts maybe not!!

Tranfers are checked.  Party Poker, for example, require you wager 25% of the transferred funds in raked hands before you withdraw.

If someone sends you $20,000 you'll have to play 5000 raked hands before you can get the money.

Dont do it on a transfer - just sit down with the same opponent 10 times at the $5000 heads up sit and go table on pokerstars and lose, sure you'll lose about $1000 in rake but its probably cheaper that the amount you'll get taxed............

Then they freeze your account for chip dumping/money laundering

[Dingdell]

Looks like you can't pull the plug on Granny yet, Sark

lol, hey I am a nice guy. wouldn't dream of it.

I just thought I had found a fault in the tax system. Damm, I was going to do research and write a book about how to fiddle the tax system.

Just looks like I will have to earn my millions at the W.S.O.P in 2010 instead. 

There are lots of faults in the tax system that work - but no one would ever write them down........legal ways require forward planning - not very sexy but they do work!!

[Robert HM]

Oh and you should know there is an IHT allowance, I can't remember what it is at the moment but the £50k falls well within the band so there will be no tax bill if that is the total of the transfer.

[AndrewT]

There is an easier way to avoid all the hassle of having to deal with inheritance tax when a family member dies - just be born into a poor family.

[Sark79]

There is an easier way to avoid all the hassle of having to deal with inheritance tax when a family member dies - just be born into a poor family.

lol.. I agree. Unfortunately I have no money right now and no money coming my way in the future.

I was just curious as to how an online account could help matters.

Like I said, my only way of getting a large input of cash into my bank account is to win it. Possibly the W.S.O.P in a few years time.

[madasahatstand]

maybe you could get away with doing the same kind of trasnfere in a casino. just give someone 50k of chips, little by little. would that work? lol

mad

[redsimon]

The "nil rate band" of IHT is £275K so if there is tax to be paid you will be rich anyway so I won't shed any tears for the example given in that radio show.

Oh and if person A deposited £50K to a poker site and transferred it to party B and then it wasn't declared if "A" died within 7 years (and was rich enough to attract IHT on the residue of their estate) theres a small matter of a penalty, and possible prosecution. As someone once said the difference between avoidance and evasion was the thickness of a prison wall...