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Cash in the curtains....
james3333
Forumite 752 Posts
My friends gran has 9k in cash in her house.
she is 80 years old and doesnt want to put it in a bank because she is scared that the government will stop/reduce her pension/benifits.
so my friend is putting this cash into HIS bank for her... i assume this is all above board and legal?
where does she stand legally for having cash in a bank in HER OWN NAME and the government?
cheers
she is 80 years old and doesnt want to put it in a bank because she is scared that the government will stop/reduce her pension/benifits.
so my friend is putting this cash into HIS bank for her... i assume this is all above board and legal?
where does she stand legally for having cash in a bank in HER OWN NAME and the government?
cheers
0
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help the aged have a fact sheet on this.
http://www.helptheaged.org.uk
search for welfare benefits
16K is an often quoted threshold for savings, but it can be complicated by other things.
You can't simply save other people's money, it isn't "above board" if it's done with intent to defraud the benefits system.
Another useful link:
http://www.ageconcern.org.uk/AgeConcern/income_pensions_information.asp
if he said , she gave it as a gift, then surely, nothing can be illegal?
coz, she has just saved it over the years and now mate friend has put it in his bank, is he likley to be asked by anyone where this money came from?
But it was a gift while she was alive, no?
That's irrelevant, you can't just gift away your estate just before you die to save on inheritance tax! You are allowed to gift around 3K a year, and the inheritance tax threshold is around 300K. If it's more than seven years before the death then it's exempt.
You also can't gift money just to receive benefits. If you suddenly give away enough to get below the threshold, then that might be viewed with suspicion too. If it's cash, as in the OP case, then it's difficult to track. However, if you suddenly deposit 9 grand in cash into a bank account, expect them to ask questions for money laundering purposes.
This person should really declare it on her death? and get taxed?
You say you can gift away 3K a year, i was given more than this a while back, what shoud i have done?
I'm not an expert: you can have a look here for some guidance.
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/InheritanceTaxEstatesAndTrusts/DG_4016736
Unless the donor dies within 7 years then there isn't anything you need to do regarding inheritance tax. I'm not sure about other issues.
Your mate's gran can give her grandson a tax free gift of £3000 per year. PLUS, if she hasn't given anything away last year, she can 'backdate' another £3000 for last year. Then next year, another £3000 and the job is done.
BUT, this is a complete gift. Gran will not be able to get the money back unless grandson gives it back to her.
I presume that she has some other money in savings accounts as she is under the threshold for personal savings, in relation to most benefits etc... So another alternative is to open a JOINT account with her grandson. When she passes away, only HALF of the balance in the joint account will be elegible for inheritance tax. When she has to declare what she has in savings, she can legitimately state HALF of the balance is hers.
Also, the joint account could be a joint ISA type account...
If your mate just dumps £9000 in his current account, which has never had any significant transactions through it, the bank may (under money laundering) ask some questions. If it was me, I would open up a couple of savings accounts and spread the money over various types of accounts in smaller denominations. (Hope the tax man isn't monitoring this thread ;-)
Also, agree with previous posts, that if someone finds that Gran has been loosing money just to recieve benefits, she could be fined.