Advice on receiving a large amount of money from abroad

GMB_

Good morning,

I'm new to the forum and I am posting because I am about to receive money from abroad. The money comes from the sale of a house. The house is outside of the uk and it is in my mother's name. The buyer lives in France. My mother is giving me half of the proceeds and we thought that it is best for me to get my share directly from the French buyer in pounds to avoid loosing money in exchange rates. I assume from reading in various places that I'm not liable to paying tax as this is not income or gain on the capital. However, such a large amount of money may raise suspicion and it may start an investigation. If that happens will the sale documents between the buyer and my mother be enough to satisfy the authorities? If not, is there a workaround?

Thanks a lot in advance.

jamesd

The transaction is legitimate and no workaround is needed. Your bank will inevitably report the receipt of the money to the authorities due to its value but the sale documents and source of the money would be sufficient to satisfy any investigation that might follow.

zygurat789

Your mother may be liable to some form of CGT, does she live in France or in the UK?
If she lives in the UK she could be liable in the normal way as she is taxable on worldwide income and gains.
Since the house is not in your name and the money is a gift from your mother to you, you have no liability.

xylophone

In this situation, it might be wiser to ask mother to tell the buyer to credit her account with the full sale proceeds - she can then make you a gift of whatever amount she wishes by bank transfer in the preferred currency.

You should advise your bank that you are expecting the sum of £X from your mother's account with Y bank and ask if your bank requires to see any documents in connection with the transaction.

Presumably your mother is au fait with any regulations relating to tax, gifts etc wherever she is resident for tax purposes.

MarcoM

xylophone wrote: »

In this situation, it might be wiser to ask mother to tell the buyer to credit her account with the full sale proceeds - she can then make you a gift of whatever amount she wishes by bank transfer in the preferred currency.

You should advise your bank that you are expecting the sum of £X from your mother's account with Y bank and ask if your bank requires to see any documents in connection with the transaction.

Presumably your mother is au fait with any regulations relating to tax, gifts etc wherever she is resident for tax purposes.

Why would the bank insist on seeing documentation?
I can understand why HMRC or even SOCA may pay a visit but personally I would be quite angry if I got a phone call from a mickey mouse bank asking me what I am doing with my money.
I though we lived in GB and not a banana republic....

jamesd

Banks have an anti money laundering obligation to ask about the source of funds in certain circumstances. Also an obligation to make a report to SOCA in certain circumstances. What you tell the bank about the source of funds would be part of such a report.

The anti money laundering term includes things like possible tax evasion with lots of or high value cash transactions,not just what people might normally think of as money laundering by large criminal gangs.

Banking privacy sadly died some years ago and we're all now to be treated as crooks without that privacy, at least in places other than some of the few remaining offshore safe havens for privacy.

MarcoM

jamesd wrote: »

Banks have an anti money laundering obligation to ask about the source of funds in certain circumstances. Also an obligation to make a report to SOCA in certain circumstances. What you tell the bank about the source of funds would be part of such a report.

The anti money laundering term includes things like possible tax evasion with lots of or high value cash transactions,not just what people might normally think of as money laundering by large criminal gangs.

Banking privacy sadly died some years ago and we're all now to be treated as crooks without that privacy, at least in places other than some of the few remaining offshore safe havens for privacy.

James, would the bank also freeze the account immediately and without notice if a big lump of cash went into it in addition to making enquiries?

To the OP, on the basis of what we read here imho it would be better to keep the money in the other country to avoid this hassle. You can still do the right think and declare tax etc etc but for me if I had to get 300 phone calls from a british bank on my own money I would keep it well away and only transfer the funds that you need. It may even be that abroad you could invest the money better anyway.

jamesd

They might make a "consent required" notification to SOCA, temporarily freezing [STRIKE]availability of that part of the money but not[/STRIKE] the whole account. This is so SOCA can check and decide by looking at other information whether it looks like a criminal action. That sort of thing is fairly routine and the delay can be too short to notice.

MarcoM

jamesd wrote: »

They might make a "consent required" notification to SOCA, temporarily freezing availability of that part of the money but not the whole account. This is so SOCA can check and decide by looking at other information whether it looks like a criminal action. That sort of thing is fairly routine and the delay can be too short to notice.

Thanks. How long can SOCA be allowed to take before they decide to investigate or not?
Can the client's money be frozen for weeks?

I am asking because I have a relative that may be in this situation at some point soon.

jamesd

If SOCA doesn't respond within a week the institution is allowed to proceed with the transaction. The customer has no claim against the institution for any losses during this time that the delay is due to SOCA and in that case the loss was claimed to be over three hundred million Pounds. Unless the action is clearly and obviously wrong, with a very low threshold of suspicion for the bank to meet to defeat such a claim. See the full decision in Shah & anor v HSBC Private Bank[2012] EWHC 1283 (QB). In this case the decision notes that blocking an account is a possibility.

The chance of such actions and blocks based on automated systems as well as humans is one of the reasons why it is desirable to have more than one current account, so a computer or human at one bank can't so easily block all of your access to your own lawful money.

CKhalvashi

MarcoM wrote: »

Why would the bank insist on seeing documentation?
I can understand why HMRC or even SOCA may pay a visit but personally I would be quite angry if I got a phone call from a mickey mouse bank asking me what I am doing with my money.
I though we lived in GB and not a banana republic....

There are money laundering rules.

About every 3 months, we do a large number of high-value transactions from foreign bank accounts into CK Holdings UK accounts, and it's inevitable that unless you have the statements for the accounts they're coming from, you'll be plagued with delays.

This is even the case between CK France/Russia/Georgia/Armenia, all of which bank with HSBC, and CK Holdings which also banks with HSBC.

CK