Tax

Kin Cooperative is advised by our partners at the Third Sector Accountancy Cooperative.

Bottomline: Contributing to a kin group is the same as giving money to a friend, just in a more organised way, and not necessarily a friend. Money received from a kin group is also treated like a gift from a friend, not income. 

Contributions are not taxable because they are freely given, with nothing expected in return, not in relation to a trade, investment or any kind of business or rights to property.**If this is not the case with your group, you may not use Kin Cooperative. 

1. How will money received appear on my bank statement?
   All transfers are to and from Kin Cooperative Limited.
2. Is the money I receive considered taxable income?
   No.
3. Are my contributions tax-deductible? 
   No.
4. Can I contribute money directly from my business or only personal income?
   Only personal income.
5. Do I need to include this money in a Self Assessment tax return?
   No.
6. What do I call received money in my accounts if not income?
   Because it is personal, you do not need to put them in any accounts you would give to HMRC.
7. Then do I need to keep documentation (e.g. messages and receipt emails) about kin group contributions and money received for the future?
   It is always a good idea to keep accurate records for yourself.
8. Will receiving regular amounts raise flags with my bank or HMRC?
   It is possible that regular amounts of money coming from any one source will attract attention, especially if the amounts are large.  
9. Will receiving money from kin groups affect my credit score or access to financial products?
   It could possibly improve your credit score and would not harm it, unlike using buy-now-pay-later services.
10. What about inheritance tax? Does the £3,000/year gift allowance apply?
    There is no cap to the contributions you can make as gifts. It is only if you give such a large donation that it depletes your assets that Inheritance Tax would come into play (on death within 7 years). This is unlikely to be an issue for most users of Kin but if you think it may be for you, then you should take independent inheritance tax advice. 
    See here for guidance: https://www.gov.uk/inheritance-tax/gifts

Have more questions? Get in touch!