The Electoral Commission appear to be looking into the cash donations through third parties to the Labour Party. It also occurred to me that rules on avoidance of Inheritance tax take a very dim view of people who "give away" huge sums for up to seven years prior to their death. I don't think there is a specific exemption for people who give money to a third party in order for it to be given to the Labour Party but then a party which sells seats in the House of Lords would probably not think twice about granting its friends special exemptions. If I gave away a few thousand quid I think there are quite strict rules about how much I can give and to whom before I would need to declare it on my income tax form as a capital transfer.
Similarly if someone gave me a few thousand pounds I assume I would need to declare it's receipt as a gift on my income tax form. Not sure if I would then pay tax on it as "unearned income" or if it would just carry over for the seven years until the inheritance tax taper relief ran down. Of course if gifting money was a legitimate way of avoiding income tax then I'm sure small builders would be happy to do jobs for nothing but get a thank you"gift" when the work was completed!
So I wonder if Her Majesty's Revenue and Customs are onto this one as well as the Electoral Commission?
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