helping someone buy a house

k4n3y

My brother wants to help his girlfriend (mature couple) buy her council home,when she gets her discount it will be around £35-£40,000,he has this money saved up and wants to give it to her to buy it, now
1-is this legal?
2-he has his own home,they are not living together nor plan to
3-He has a decent job and also does homers which i'm afraid he doesn't declare to the taxman so he is afraid questions will be asked as to how he saved so much money,some of it from wages but majority from his other income
I know the forth coming answers will involve slighting his dishonesty but if anyone can look past this and maybe give some straight answers
Thanks in advance

theartfullodger

He should declare his income to the tax man & pay tax on it: Just like any decent citizen. Tax evasion (sounds like he knows he should declare it..) is a criminal offence..

There is nothing to prevent him gifting any such sum as he sees fit to his g/f (or me, please). Should he die within 7 years there may be IHT to pay. As he's been on the fiddle cheating the taxman it would only be karmic is she then decided to drop him and hold onto the gift, eh??

Pixie5740

Yes it's legal for your brother to make a gift to his girlfriend. His girlfriend will probably need to use a solicitor to complete the purchase and they will be bound by anti-money laundering legislation and regulations so your brother and his girlfriend may well need to prove the source of funds. I'm unsure whether or not a solicitor would also be obligated to report your brother for tax evasion if they got a whiff of it going on.

Edit: Posts further down the thread have confirmed the solicitor would have to report tax evasion if he/she suspected it.

danslenoir

The solicitor carrying out the conveyance has a legal obligation to check the source of the cash for money laundering purposes.

I'm no expert, but I'd wager that a bank statement from your brother's girlfriend that shows a £40,000 transaction from your brother's account to her account is not going to be sufficient, and that the solicitor will want to see copies of his bank statements too. It seems that solicitors are also duty-bound to report suspected tax evasion without having to inform their clients (http://www.telegraph.co.uk/finance/personalfinance/tax/2864661/Solicitors-must-shop-suspected-tax-dodgers.html).

I guess your brother should have thought harder about the implications of his tax evasion.

fairy_lights

k4n3y wrote: »

2-he has his own home,they are not living together nor plan to

In this case, why is he so eager to give her his life savings? Is he expecting her to sign over a share of the house to him at a later date?
What if they break up?

marksoton

How ironic that funds achieved by tax evasion are being used to purchase a property at a price effectively subsidised by tax payers....

gregsayer

marksoton wrote: »

How ironic that funds achieved by tax evasion are being used to purchase a property at a price effectively subsidised by tax payers....

Brilliant!!! ROTFL
not to mention its a house built by the tax payer!!

McTaggus

Your brother's girlfriend will need to evidence the source of her funds, as per increasingly stringent anti-money laundering regulations. This will involve evidencing where the savings have come from and, if a gift from another individual, this typically also involves them evidencing that the source of funds is a legal source - i.e. from salary. Your brother will be asked to evidence income, and how this relates to payments to his savings. Your brother is also likely to be asked to sign a legal declaration that states that he has legally received these funds and gifted them to his girlfriend.


Solicitors are legally obliged to report irregularities - not just in terms of money laundering but also suspected cases of tax evasion, or fund arising from other criminal behaviour (which is what tax evasion is).


Therefore, if your brother is unable to show that the gift was from completely legal sources, then it is entirely possible that the solicitors would be under an obligation to report it as suspicious activity. Solicitors must err on the side of caution, and report all suspicious activity no matter how big or small the sums involved are.


I agree that your brother's dishonesty is both a moral and a legal issue more widely and I will keep my opinion on it to myself to save offending you and put this aside; instead I would suggest that this course of action is likely to lead your brother to trouble. Despite his generosity towards the g/f, some might say that this trouble and predicament was potentially karma in action.

k4n3y

Amen to all,it is what it is,but don't think he will be going down this route after all,thanks