Unusual money problem


J

+Jackson+

A close relative has asked me to look after quite a large sum of money for
them from a property sale, in an interest earning ac, as they don't trust
themselves with it. I have existing savings a/c's with ING and a couple of
others, but I see a problem because I'm self employed and on higher rate
tax. Can anyone suggest a solution? Can the relative open an ac in their own
name, but with me as the only signatory? Or something else.....?
 
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R

Ronald Raygun

+Jackson+ said:
A close relative has asked me to look after quite a large sum of money for
them from a property sale, in an interest earning ac, as they don't trust
themselves with it. I have existing savings a/c's with ING and a couple of
others, but I see a problem because I'm self employed and on higher rate
tax. Can anyone suggest a solution?
What specific problem do you see? The interest will belong to your
relative, not to you, so you would not need to declare that part of the
interest on your tax return. If keeping the money in an account in
your name, it will make it easier to keep track of what part of the
interest is whose if you just opened an additional account in your name.
Can the relative open an ac in their
own name, but with me as the only signatory? Or something else.....?
You could open an online-only account in the relative's name. The relative
would need to sign all the forms etc, but get you to set up the passwords,
to be kept secret from him/her.

This is probably technically against the T&Cs, and the relative would have
no leg to stand on should you run off with the dosh, but apart from that
it should be OK. You'd need to think about what would happen if you got
run over by a bus.
 
T

Troy Steadman

+Jackson+ said:
A close relative has asked me to look after quite a large sum of money for
them from a property sale, in an interest earning ac, as they don't trust
themselves with it. I have existing savings a/c's with ING and a couple of
others, but I see a problem because I'm self employed and on higher rate
tax. Can anyone suggest a solution? Can the relative open an ac in their own
name, but with me as the only signatory? Or something else.....?
This arrangement is so unusual it is bound to trigger alarm bells when
(as Sod's Law will dictate) it will be *your* business that comes up in
the "Who Shall we Investigate Today?" lottery at the IR.

It must be a classic money-laundering technique. It is very expensive to
prove you are not a drug smuggler when there is so much evidence to
the contrary.


--
 
J

john boyle

Ronald said:
What specific problem do you see? The interest will belong to your
relative, not to you, so you would not need to declare that part of the
interest on your tax return.
But he might have some explaining to do when the HM Revenue & Customs
get the returns from the bank showing a huge wodge of interest being
paid to him which aint on his SA return.
 
J

+Jackson+

| +Jackson+ wrote:
|
| >
| > A close relative has asked me to look after quite a large sum of money
for
| > them from a property sale, in an interest earning ac, as they don't
trust
| > themselves with it. I have existing savings a/c's with ING and a couple
of
| > others, but I see a problem because I'm self employed and on higher rate
| > tax. Can anyone suggest a solution?
|
| What specific problem do you see? The interest will belong to your
| relative, not to you, so you would not need to declare that part of the
| interest on your tax return. If keeping the money in an account in
| your name, it will make it easier to keep track of what part of the
| interest is whose if you just opened an additional account in your name.
|
| > Can the relative open an ac in their
| > own name, but with me as the only signatory? Or something else.....?
|
| You could open an online-only account in the relative's name. The
relative
| would need to sign all the forms etc, but get you to set up the passwords,
| to be kept secret from him/her.
|
| This is probably technically against the T&Cs, and the relative would have
| no leg to stand on should you run off with the dosh, but apart from that
| it should be OK. You'd need to think about what would happen if you got
| run over by a bus.
|


I was worried about triggering an IR enquiry into my business. I'll have to
include the savings on my tax return, which will not tally with my earnings
figures.

Cheers
+Jackson+
 
D

Doug Ramage

I was worried about triggering an IR enquiry into my business. I'll have
to
include the savings on my tax return, which will not tally with my
earnings
figures.

Cheers
+Jackson+
You should NOT enter the interest in your SA Return. Your relative should
enter in his/her/their Return(s).

I would open a separate account for this money.
 
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R

Ronald Raygun

john said:
But he might have some explaining to do when the HM Revenue & Customs
get the returns from the bank showing a huge wodge of interest being
paid to him which aint on his SA return.
Indeed, but such an explanation would be trivially forthcoming by
pointing out that the interest has, as DR agrees, been reported on
the relative's return.

Of course the explanation would be even easier (or rather the need for
it would tend not to arise) if the money were put in a separate account
*in the relative's name* but over which the OP, and not the relative,
has control.
 
C

Chris Blunt

This arrangement is so unusual it is bound to trigger alarm bells when
(as Sod's Law will dictate) it will be *your* business that comes up in
the "Who Shall we Investigate Today?" lottery at the IR.

It must be a classic money-laundering technique. It is very expensive to
prove you are not a drug smuggler when there is so much evidence to
the contrary.
The evidence that he is a drug smuggler being?

It might be a good idea for the two parties to have a simple agreement
drawn up and signed by a solicitor. This would describe what is being
proposed and state the reasons for doing it, the source of the funds,
who the money belongs to etc. That would help to protect both parties
interests should complications arise in the future.

Chris
 
P

Peter Ibbotson

Chris Blunt said:
The evidence that he is a drug smuggler being?
Absolutely none, but it is structured like many wire fraud and money
laundering arrangements and I'd guess a report will wing it's way from the
bank to NCIS in due course.
It might be a good idea for the two parties to have a simple agreement
drawn up and signed by a solicitor. This would describe what is being
proposed and state the reasons for doing it, the source of the funds,
who the money belongs to etc. That would help to protect both parties
interests should complications arise in the future.
This is a Good idea

Peter
 
J

+Jackson+

Hi all
Thanks for the really useful feedback. As someone said, putting it into my
name means I'll be paying tax on the interest at the bsoc end. So I'll have
to show it on my tax return. And the capital deposit won't match with my
earnings. And they won't believe me!

It's not worth my bother of taking the solicitor's agreement route, although
that's probably the soundest idea. I think I'll tell the relative to put it
into a long notice ac and try to get me, not them, to be the signatory.

Cheers
+Jackson+
 
T

Troy Steadman

Chris Blunt said:
The evidence that he is a drug smuggler being?
"Criminal lifestyle" - a large wodge of money in the bank and a cock and
bull story about how it got there...

Proceeds of Crime Act 2002

"The Act tightens the definition of money-laundering, making it more
difficult for crime bosses to distance themselves from baseline
operations, and courts now need only a civil burden of proof - on the
balance of probability - that assets were illegally obtained in order to
"restrain" or freeze them at an early stage".

http://www.guardian.co.uk/crime/article/0,2763,1155296,00.html



--
 
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R

Ronald Raygun

Troy said:
"Criminal lifestyle" - a large wodge of money in the bank and a cock and
bull story about how it got there...
Bullshit. Simply having money in the bank doesn't constitute a
criminal lifestyle. Lavish spending would be a better indicator.
 
T

Troy Steadman

Bullshit. Simply having money in the bank doesn't constitute a
criminal lifestyle. Lavish spending would be a better indicator.
Nope. It's easy to piss away your ill-gotten gains and the pubs are full
of dodgy subbies doing just that. The tricky bit is to legitimise the
profits so you can reinvest them.

The bank manager who doesn't report a potential money-laundering
operation is in big trouble (dunno what trouble so crossposted to
uk.legal). The icing on the cake is that the police get to keep some or
all of the proceeds they have confiscated!



--
 
J

John Anderton

Nope. It's easy to piss away your ill-gotten gains and the pubs are full
of dodgy subbies doing just that. The tricky bit is to legitimise the
profits so you can reinvest them.

The bank manager who doesn't report a potential money-laundering
operation is in big trouble
Not just the bank manager. Any member of the bank's staff, hence all
the apparently stupid questions cashiers now have to ask people who
want to do business with the bank.

I'll have to dig out the rules and regulations we all had to sign,
although how anyone thinks I'm going to spot evidence of money
laundering is beyond me.

"Oh, look. That peak in usage on that UNIX box must mean Mr Smith is
laundering money. Quick, I must inform my manager or face a stiff
penalty"

Cheers,

John
 
J

Jonathan Bryce

John said:
"Oh, look. That peak in usage on that UNIX box must mean Mr Smith is
laundering money. Quick, I must inform my manager or face a stiff
penalty"
No, you must not inform your manager. That would be tipping off, and lead
to an even stiffer penalty. You must go straight to your money laundering
reporting officer.
 
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C

Chris Blunt

"Criminal lifestyle" - a large wodge of money in the bank and a cock and
bull story about how it got there...
But it isn't a cock and bull story. The bank records would show that
the money had come from the account of a close relative, and that
relative could show that the funds were the proceeds of the sale of a
property. I see no reason for any suspicion. Its not as if they're
doing all this using cash.
 
T

Troy Steadman

But it isn't a cock and bull story. The bank records would show that
the money had come from the account of a close relative, and that
relative could show that the funds were the proceeds of the sale of a
property. I see no reason for any suspicion. Its not as if they're
doing all this using cash.
You are not thinking this through. If you have half an hour to spare
(and this is unmissable if you are a Star Trek fan!) have a read about
the foolish Mr Tuvok in his own words:

http://tinyurl.com/ahofa
http://tinyurl.com/dbol7

Yes you can prove you are innocent but if like Mr Tuvok you are buying
and selling houses and have lost the paperwork from decades ago, and the
houses have been going up in value, how on earth do you *prove* where
your money came from?




--
 
C

Chris Blunt

You are not thinking this through. If you have half an hour to spare
(and this is unmissable if you are a Star Trek fan!) have a read about
the foolish Mr Tuvok in his own words:

http://tinyurl.com/ahofa
http://tinyurl.com/dbol7

Yes you can prove you are innocent but if like Mr Tuvok you are buying
and selling houses and have lost the paperwork from decades ago, and the
houses have been going up in value, how on earth do you *prove* where
your money came from?
I suspect the police probably had some other evidence of Mr Tuvok
being involved in drugs that he's failing to mention. Its funny how
people like that forget to tell the whole story. Apparently the
confiscation of his assets was a result of the drug charges, it wasn't
simply the assets themselves that triggered suspicion.

Whatever the facts of that case, that's not what's being discussed
here. I got the impression this was a rather recent property sale, so
there should be no problem proving the source of the funds.

In fact I was in a similar situation last year when I sold a
commercial property. The bank I was intending to deposit the proceeds
with wanted some evidence of where the money came from. I got the
solicitor who handled the property sale to write a letter confirming
all the details, and that was perfectly acceptable to the bank. Nobody
else asked any questions, and nobody suggested I was a drug dealer!

Chris
 
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F

Fergus O'Rourke

+Jackson+ wrote:
[snip]
It's not worth my bother of taking the solicitor's agreement route,
although that's probably the soundest idea.
[snip]

It can't be a serious concern for you then.

Any written agreement, even without legal advice, would be better than none.
 

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