Mother has £00000s of mine... inheritance tax ???

foxyuk

got info now thanks

neas

In the eyes of the law i'd say it was a gift from yourself to your mother. When you inherited it.. as it has historically residing in her account.

For this reason i'd guess they would just see it as a simple gift back... and totally liable for inheritance tax if she went over the limit.

sleepless_saver

If your mother ever needs to claim any benefits or needs long term care (which can happen suddenly even if someone is fine now), then the money will be considered to be hers and she would be expected to use it. Plus if she gives it away too short a time before needing benefits/care that would be counted as deprivation of assets and she would be assessed as if she still had the money.

So get it back now. You can always put it in a fixed period savings bond so you can't get at it.

magpiecottage

There may be an implied trust - although you may need to get hold of your grandfather's will to prove it.

globetraveller

How well do you get on with your mother? Its a strange set up. If you have a mortgage why not pay some of it off?

Dead_keen

People often ask someone to look after things for them. My kids often leave my wife to look after their maltesers if they have to leave the room and I am around.

If that is what happened here then your mum will be your nominee or bare trustee - holding the money on your behalf. There are no tax issues with this. The money is yours and you will be taxed on the interest that she receives on the money on your behalf. Simples.

But that begs the question of how the interest has been accounted for so far.

Your mum may have signed a form with the bank asking that her interest is paid to her gross (i.e. before deducting basic rate tax). That would be a bad move as she is saying that it is her money (and so she is not holding it on anyone's behalf - unless, of course, she declared that on the form).

How have you treated the interest from your own tax perspective? If you are a 40% taxpayer, have you paid tax on it? If not, that suggests that it is not your interest (or money) but hers.

If she is a 40% taxpayer, has she paid the extra tax on the interest? If so, that again suggests that it is not hers.

If there is any doubt about whose money it is, I would suggest you do something about it sooner rather than later. That could simply be a declaration of trust to recognise that she is holding it on your behalf. If you do go down that route, I would include some factual background in it to make it clear that the money was yours all along.

mjm3346

foxyuk wrote: »

ok will leave it a few days .....

dont want to start tonight/tomorrow with ... happy new year mum. can i have my money back just in case you pass away in next 7 years how grim

If the estate is below the IT threshold there is nothing to worry about on that score but if she needs care, as already pointed out, it could be counted as deprivation of assets.
If you try to claim the money is yours to avoid the deprivation of assets claim but the tax appropriate to your circumstances has not been paid then they can come after you for tax offences, either way if she needs care they can come after the cash.

If she has will and has left it to someone else you do not stand a high chance of getting it back.

kalaika

mjm has hit on an additional issue here. If the money is currently deemed to be 'hers' (i.e. that you have gifted it to her) then if she dies there might not be any inheritance tax to pay, however if she has a will that says for example 'all assets are to be split equally between mad uncle Bob, the Charity for the Protection of Rabid Gerbils and the Monster Raving Loony Party' then you wouldn't be getting your money back.

Alternatively, if she dies without a will, her estate will go to her next of kin via the intestacy rules. OP, you don't mention whether your Mum has a husband or whether you have any siblings but if there is anyone else then her estate will be shared between all of you, and so you still wouldn't get all of your money back.

Either way, I'd echo the replies above and say get your money back ASAP. If you don't trust yourself to not spend it then lock it in to a savings account or similar.

TM1976

foxyuk wrote: »

get on with my mother great.... theres rerasons i dont want it in my name...

no mortgage mate paid off .... i do have a buy to let flat with interest only mortgage but no advantage paying it off.... i could!!!

i would have more tax to pay as i declared it as i have a dss tenant in it...

None of these reasons would see you better off for having the money held by you mother - best option would be to pay off the BTL mortgage.

DVardysShadow

This needs legal advice. There is a distinction between beneficial ownership [entitled to the money] and nominal ownership [name on the account with the money]. In this case, from the description, quite clearly, the OP has beneficial ownership and his mother has nominal ownership. With nothing in place to indicate beneficial ownership, the authorities would I imagine assume that beneficial ownership goes with legal ownership.

somethingcorporate

foxyuk wrote: »

In relation to the gift element. It says u can give away £3000 every year for 7 years. Am I better taking back the remaining money apart from £21000 and every tray for next
7 years I can get a debit of £3000 a year.

If I go to a lawyer and mt mum and I sign something stating it is my money. ... My mum is paying the tax on it. I asked her if it affects her pension credit once she retires in march??? ( she has asked to work on ))). She told me she has too much money to get it

It's a bit late doing this retrospectively and I think you could get your fingers burnt if you don't take proper advice.

I would be concerned about the deprivation of capital as I don't think there is a limit as to how far back the councils can go in determining whether capital has been passed on. With nothing in place that makes this money appear that it is yours at the time it was given (it was simply a gift to your mother) you could be on a sticky wicket to later claim that it is yours and has been yours all along.

If you mother has been paying tax on the interest is she paying at a different rate to you (i.e. are you a higher rate tax payer?) becaues you may need to make up the difference if this is the case.