Temporarily moving savings to parents bank account

jcuurthht wrote: »

What if I pay in two instalments? e.g. 10k & 8k

Would this actually be considered money laundering?

Whether it's £18k or £10k+£8k or £5k or £1, it's not money laundering if the money doesn't contain the proceeds of crime.

The comment that it might "flag up" does not mean you are a criminal, it is to do with the fact that banks have monitoring systems to help identify unusual or suspicious transactions and a large receipt from a third party (especially e.g. where your parents don't normally get large receipts ; and which is then sent back out again a few weeks later) would be expected to "look funny" if it is something other than a small sum.

Also if the bank or other money-handling organisation has a monitoring threshold such as £10,000 to help them filter off and report the riskier transactions, you can imagine that they also have a system that flags if they receive a bunch of transactions at £9999 from the same source in quick succession.

This does not mean the bank or law enforcement agencies will take any action or make any enquiries. People put money in accounts all the time. It just means there's something for them to potentially ask questions about.

jcuurthht wrote: »

I currently have over 85k in my bank account, and therefore want to move 17k to my parents bank account (which pays no interest) while I set up a new savings account.

Are there any legal ramifications of doing this?

The money sitting in your parents' account would appear to belong to your parents in the absence of any paperwork to the contrary, so when they get hit by a bus tomorrow and their estate is being used to settle their debts or distributed to beneficiaries, or if for example they get sued for every penny they have as a result of a vexatious lawsuit from some silly neighbour, you may struggle to recover"your" funds because it just looks like a gift.

So, each of you should sign a letter to say it's a loan.

Whether or not you have paperwork, their bank is not duty bound to recognise any separate trust agreement between your parents and you, and the account terms will usually say that it is a personal account of your parents alone, prohibited​ from being used as a nominee account for someone else's funds. So the "legal" structure is that it is their money, any interest or fees relating to it belong to them, and then separately they owe you a debt.

And if they (like you) are overseas resident, the periodic balance or interest amounts in their account for the reporting period will get reported to HMRC as belonging to them and shared internationally with their relevant foreign tax authority, just as already happens with your £85k account (unless you are in one of the various countries that doesn't want to share financial account data with the UK, though the number is dwindling).

One obvious point not related to your question is why your parents account doesn't pay them any interest when it's got over £17k in it. The MoneySavingExpert thing to do is for them to use accounts that pay more than 0% interest on the cash the bank holds. Granted, £17k for a couple of weeks would not produce much interest but if they're not getting interest on the rest of their own money they are missing an opportunity.