Money from abroad...what shall I do???

hilali65

Hi All,
My brother, who lives abroad, would like to send me a very kind gift for my kids to cover their current and future education. The amount is around £300K but I am not sure what tax implication this may have as I live in the UK.

My questions are;

1- Can I just transfer the money to my UK account without any problems from my bank or HMRC?
2- Is it an option to open an offshore account and then withdrew the money year on year as and when needed?
3- He is banking with HSBC, are there any cost involved when they transfer such amount to my HSBC bank?
4- Is there a form or formal document that I/him need to prepare and verify the source of the money just in case I got any questioning? Does he need to endorse it by the British consulate?

Appreciate any thoughts and feedback as I have no clue where do I legally stand on this.
Cheers

fengirl_2

1. Your bank may query the deposit, but its unlikely. If they do, presumably you will have paperwork from your brother to verify the source. HMRC do not have access to your bank account, but are infomred of large unexplained deposits.
2. Yes, but the interest earned is still assessable on you.
3. You will have to ask the bank.
4. No, a letter would suffice.
It might be better to have the money put into accounts in the names of your children with you (and spouse?) as trustees. That way the interest will be assessable on your children, not you, and their personal allowances would be available to set against it.

John_Pierpoint

fengirl wrote: »

1. Your bank may query the deposit, but its unlikely. If they do, presumably you will have paperwork from your brother to verify the source. HMRC do not have access to your bank account, but are infomred of large unexplained deposits.
2. Yes, but the interest earned is still assessable on you.
3. You will have to ask the bank.
4. No, a letter would suffice.
It might be better to have the money put into accounts in the names of your children with you (and spouse?) as trustees. That way the interest will be assessable on your children, not you, and their personal allowances would be available to set against it.

Then on their 18th birthday they buy a motor bike and a speed boat and kill themselves?

I'm under the impression that Gordon Brown has meddled with the concept of relatives putting money into trust for children. The income (tax) covenant went years ago and I remember talk of "accumulation and maintenance trusts" becoming "orphaned children" trusts to benefit from favourable income tax treatment?

Perhaps he never went through with it; though I do know that a trust for children now HAS to be given to them on their 18th birthday (instead of 25) or it turns into a taxable discretionary trust and pays the annual capital levy.

I suppose the answer is to bring the children up to be realistic little MSE people, knowing they will go to Uni having invested their share in property - thus saving rent, having safe habitable accommodation and making an income by renting out the spare room?

James_Trimby

HI you will probably need paperwork for the bank and revenue in case asked for as large sums are reported. I agree with fengirl re looking at putting some or all into kids names gifts from non parents allow them to earn interest tax free (up to their personal allowances) but you can still use this money for their benefit. Trusts are complex and costly but do help control the 18 year old! But only for so long and if you are spending some monies in the mean time there probably is not enough monies to make this worthwhile.

I would consider what they need till 18 and get at least this into their own accounts. IF alot more is left then you need to consider your view as a parent as to whether you will trust them or whether you pay a little extra tax and keep the monies in your name!

fengirl_2

I wasn't suggesting setting up trusts - I just meant that the bank or building society in which you deposit the money would need to put the account in your name as trustees for the children....not in your name alone.