Saving sisters money in my offset.

adele9365

ViolaLass wrote: »

Why not give her the full amount of interest? It wouldn't cost you anything.

I would be open to doing that. Would it end up costing me though through compound interest?

ViolaLass

adele9365 wrote: »

I would be open to doing that. Would it end up costing me though through compound interest?

It won't cost you any more than it would cost you if you didn't put your sisters money in your offset. If you hand over to her the precise amount you've saved, you have gained nothing and will lose nothing.

Archi_Bald

want_to_save wrote: »

alternatively she can put the full £15,000 in a cash isa and its her money and not yours

That's an even worse place from an interest point of view than letting her sister look after her cash. But she would retain the legal ownership of her money which is an important consideration.

Mojisola

adele9365 wrote: »

My sister and I recently inherited £15,000 each. She would like me to look after her money for her. I guess I'm the more sensible one!

I thought I might put the money into my mortgage off-set account.

As long as you give her the equivalent of the interest she could get in an account like Santander123 and you have a loan agreement drawn up so that there is no argument about whose money it is in the future, go for it.

If she is claiming any means tested benefits, she will need to declare the £15k as capital.

robatwork

There's a lot of judgement going on in this thread.

As others have said once the money is in your account it's your money not hers, and you are only bound by honour to pay it back to her.

However I think there's nothing wrong in you using it on your offset and giving her some interest at a level you both agree. Better than her chucking it in a 0.01% account or spending it all frivolously. I think your time and trouble in doing this should be worth something to her - only you two can decide what.

Nothing disgusting, please ignore the trolls.

xylophone

Your sister can make you an interest free loan- record this in a letter signed by you both.

There is nothing to prevent your making her a gift a couple of times a year.


http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

racing_blue

In this case the lender (your sister) would be putting her £15k entirely at risk, so it would not be a prudent choice for her. I'd advise my sister to open an ISA.

Archi_Bald

racing_blue wrote: »

I'd advise my sister to open an ISA.

Why an ISA?

Linton

What happens if you die? Her money would be part of your estate.

xylophone

What happens if you die? Her money would be part of your estate.

A loan would be repayable from the estate.