Life insurance pay outs and benifits

sammy1976

My friend is still a young woman in a devastaing position. She has worked and payed alot of tax. she is not working at the moment and probably will not be for the next few years.

I know what she is thinking of doing isn't legal but to be honest on the bigger scale of things is it so wrong? It is not a fortune but would help her children .i don't know, maybe i was stupid to ask. I'd hate to see her and her children with more worries than they already have.

paddedjohn

But why do you think that the rest of us should support her and her family if her husband has already provided for them with this policy.
She is better off declaring it straight away as they will find out in the future.

Pollycat

Tory70 wrote: »

This is the third thread in as many days when people are asking for 'loopholes'. Nice to see nothing changes chez MSE *rolls eyes*

I can't see where the OP is asking for 'loopholes'.

Back on topic:
I think the OP's friend would be very silly not to declare this money.

It's pretty clear on all the documentation I've seen about which change of circumstances (and an increase in capital will almost certainly be one) you need to advise DWP and local councils about.

OP, please convince your friend that in circumstances such as this, honesty really is the best policy.

bobajob_1966 wrote: »

Not very welcoming towards a newbie?

Maybe not, bobajob, but the newbie didn't offer much of value to the thread, did he?

Tory70 wrote: »

This is the third thread in as many days when people are asking for 'loopholes'. Nice to see nothing changes chez MSE *rolls eyes*

Oldernotwiser

sammy1976 wrote: »

I know what she is thinking of doing isn't legal but to be honest on the bigger scale of things is it so wrong? It is not a fortune but would help her children .i don't know, maybe i was stupid to ask. I'd hate to see her and her children with more worries than they already have.

I think everyone here wants it to help her children as well. Using the money for what it's intended, in an honest and open way, will ensure that none of them have any worries and can hold their heads up.

Does she want everyone to think that her husband cared so little for his family that he left them unprovided for and having to rely on benefits? That wouldn't really be fitting to his memory, would it?

Oldernotwiser

Pollycat wrote: »

I can't see where the OP is asking for 'loopholes'.

I think that asking whether the insurance company will tell the benefit office about this policy is looking for a loophole, don't you?

rogerblack

Tory70 wrote: »

This is the third thread in as many days when people are asking for 'loopholes'. Nice to see nothing changes chez MSE *rolls eyes*

Whereas it's entirely fine to employ an accountant and exotic financial planning to see if one can avoid paying tax.

clemmatis

rogerblack wrote: »

Whereas it's entirely fine to employ an accountant and exotic financial planning to see if one can avoid paying tax.

I agree entirely with the spirit behind your comment, rogerblack. Loopholes are loopholes and the rich are the best placed to take advantage of them and even find them where none exist.

Asking whether the insurance company will tell the government about the payout isn't looking for a loophole/"loophole", tory70. The OP's friend seems to want to know whether she can get away with something that's clearly illegal. Unfortunately, inheritance tax and care home fee dodges are, on occasion, made legal by loopholes.

http://en.wikipedia.org/wiki/Loophole

sammy1976, first, she should declare it, second, tax etc. records are checked without notice and even without reasons for any suspicion at all; I got an HMRC letter recently to say they'd run a check and found I'd overpaid by £500 last financial year! but your friend is in line to get a rather different kind of letter...

sammy1976 wrote:

I know what she is thinking of doing isn't legal but to be honest on the bigger scale of things is it so wrong?

I sympathise with what you say here. But she should still declare it.

sammy1976

Thank you everyone for all your comments. I have spoken to my friend this morning and she will declare it once she receives it, i have to say honesty is better in her case.

I think she was just panicing a bit about how she is going to cope but hopefully things will work out ok for her.