Suspected fraud, tax evasion and misuse of PoA - deceased person

Jet42

I have suspicions about the way that the money of my late grandmother was spent during her last few years and I'd like to know if Action Fraud, the Office of the Public Guardian and/or HMRC are likely to be interested in investigating when I can provide very little evidence. I am not a beneficiary or executor of her will so I don't believe I have a right to access any financial information (eg bank statements) of the deceased. Ideally, I would like her bank accounts to be independently investigated to check for any wrongdoing.

Suspected fraud: Before Power of Attorney was granted, my grandmother claimed money had been taken from a credit card without her permission on a number of occasions during at least one month. My aunt and uncle had access to my grandmother's credit card and pin because they used it to buy my grandmother's groceries with her permission (they ignored family advice to set up access to the account properly with the bank). Eventually, someone on their side of the family confessed to taking the missing money by gaining access to the card and pin. The theft had been reported to the bank but, when she discovered it was a family member who was responsible, my grandmother did not inform the bank that the culprit had come forward and she chose not to pursue the theft further. My side of the family didn't believe the reasons given for why the money was taken but, because we didn't want to go against my grandmother's wishes, we didn't take it any further. If reported to Action Fraud now, are they likely to investigate (around 5 years later)?

Gift tax: During the period above, my grandmother's credit card account showed very high weekly grocery shopping amounts. She ate very little and so the high amounts lead me to suspect that my aunt and uncle may have been purchasing their own groceries at the same time - possibly with my Grandmother's permission. Some larger amounts (eg £2,000) were also paid out of her account and she wouldn't tell my side of the family what they were for. If the amounts total over £3,000/year, I believe they are subject to gift tax. If reported to HMRC, are they likely to investigate?

Power of Attorney: My aunt and uncle were later appointed as attorneys to help take care of my grandmother's financial affairs. They had been struggling financially (they stopped going out, going on holidays and even had their phone and Sky TV cut off because they didn't pay the bill) and then suddenly seemed to be able to afford things they previously couldn't, like Sky Sports. I am concerned that my grandmother's money was spent for something that only benefited the attorneys and, as far as I'm aware, this is illegal under the terms of power of attorney. I think banking records would show if there was anything untoward taking place but obviously I don't have access to these. Are the Office of The Public Guardian likely to look into this based on what I've shared here?

There may be valid explanations and no wrongdoing may have taken place but I would like some independent assurance to put my mind at rest.

POPPYOSCAR

Nothing to do with you.

Keep_pedalling

All you have is suspicions and even if they were taking money that still may have been with your grandmothers permission. Nothing you can do really so forget it and move on.

Gifts over £3000 are not subject to tax, unless her estate was subject to inheritance tax, and then it is the estate that pays not the recipient of the gifts. That is an issue to be delt with by the executor so once again nothing you can do about that.

securityguy

"If the amounts total over £3,000/year, I believe they are subject to gift tax."

To _what_?

Are you seriously saying that you believe that if I give my children twenty grand they, or I, am liable for tax? Yes, it has implications for inheritance tax if I die within seven years, and it has implications for "deprivation of assets" under some quite narrow circumstances but "gift tax"? What is that?

McKneff

There is no such thing.
It isnone of your business.

TBagpuss

No, no-one is going to investigate based on what you have said.

In relation to the use of your grandmother's card when she was alive, she was aware of the mis-use and she chose not to take action. You might not agree with her decision not to expose the person who stole from her but it was her decision to make.

In terms of of the possible mis-use of her assetsunde the PoA it sounds as though you accept that the spending may well have ben with your grandmother's permission. Assuming that your grandmother had capacity at that time, then if she gave her permission the attorneys did not do anything wrong. if she did not give permission, or if she had lost capacity, then they may have breached their duties as attornies but it would be very dificult to prove, and I think that the ultimate beneficiaries of your grandmother's estate would be the ones to raise if if they felt that anything had been mishandled.

The gifts which your grandmother chose to make were her business - you say that she refused to tell your family what they were or -it was absolutely her right to chose to kep that confidential. Maybe she gave gifts to the child who was heloing her out by doing her shopping etc, and that's why they could afford to pay their bills?

If the beneficiaries of the estate were someone other than your aunt and uncle then you could raise your concerns with the beneficiaries who could decide whether they wanted to make any further enquiries

Jet42

Keep Pedalling - I wondered whether HMRC would check whether the executors have carried out their duties correctly, especially in this case where the executors are probably also the gift recipients and will beneficiaries and so there's an incentive for them not to declare the gifts or carry out their duties properly.

Security Guy - It's the inheritance payable on gifts made within seven years of a person's death that I was referring to, which does come under inheritance tax.

TBagpuss - I don't accept that the possible misuse of assets under the PoA was with permission (money spent before the PoA was arranged may well have been with permission and, you're right, I don't have any right to know about that but I thought HMRC would want to take a look). My understanding of the PoA rules is that the attorneys must keep records of everything spent on the donor's behalf and that they can only act for the benefit of the donor and not for themselves - even if the donor did give permission for the attorneys to get some money out for themselves, my understanding is that that permission would not be recognised by the law. The only exception is where attorneys can choose to give small gifts to, say, young grandchildren, if that was what the donor typically did before the POA. An attorney buying things for themselves would therefore be illegal. Please correct me if this is wrong but that is my understanding. What is the point in requiring the attorneys to keep records if no one reviews them and no one can request an independent review if there are suspicions? My grandmother did lose capacity, although it's impossible for anyone to prove how her accounts were handled from that point when no one other than those suspected of wrongdoing seem to be allowed access to the evidence (ie bank statements).

Unfortunately the beneficiaries/attorneys/executors are the same people and they are the only ones who have access to the evidence needed to determine whether they carried out their duties correctly. I'm shocked that no organisation oversees this as it seems very open to abuse. I know the Office of the Public Guardian are able to investigate misuse of PoA while the person is still alive but I would like to know whether they have the power to do so when the person is deceased.

I understand people's view that it's none of my business but in turn would ask them, would you not look to take any action if you were worried that a vulnerable, close member of your family had been influenced and potentially defrauded? Surely the potential to gain something from a situation isn't the only reason to scrutinise activity, if any wrongdoing has taken place then it's the right thing to do to investigate?

These things stir up lot of emotions but it would be nice to have some closure over the matter and know that she wasn't taken advantage of in the later years of her life.

Yorkshireman99

The Office of The Public Guardian has power to investigate so you can make a complaint to them. That is probably the only way you are going to get action.

securityguy

"Security Guy - It's the inheritance payable on gifts made within seven years of a person's death that I was referring to, which does come under inheritance tax."

What you said was wrong, or at least misleadingly incomplete. " If the amounts total over £3,000/year, I believe they are subject to gift tax." That only applies if the estate is subject to inheritance tax. The issue only arises if the estate was liable to IHT, and then only on the marginal amount. Was IHT payable? Was the effect of these alleged gifts to pull the estate out of IHT by a significant amount? Did people who were diddling money out of an elderly relative to buy Sky Sports subscriptions handle probate themselves involving the sale of a half million pound property and either fraudulently mis-declare on IHT or manage a complex deception to move the estate out of IHT?

And in a sense, you can't have it both ways. If your grandmother had assets of (assuming she was a widow) £650k, if attorneys who were also residual beneficiaries helped themselves to a few tens of thousands of pounds in advance of her death, who benefits? And more to the point, who loses? Your grandmother would have had over half a million pounds of assets, presumably died leaving a large chunk of them, and the money went to the relatives anyway. That's exactly why attorneys who are also residual beneficiaries tend to get light-touch auditing, if that, unless there's evidence that the donor's interests while they were alive were harmed (ie, the money was taken such that the donor couldn't do something they otherwise could have done).

Conversely, if the estate wasn't liable at any point to IHT, then it's a worry that your grandmother's money was being misused rather than spent on her (although you don't suggest that she wanted for anything), but the issue of IHT and your imaginary "gift tax" is a complete red herring, as the estate wasn't large enough.

If the estate wasn't subject to IHT, your grandmother could give anyone her credit card and PIN (in breach of the bank's terms and conditions, by the way, and unless you could show duress the police will just laugh at you) and they could take as much as they like, and it's a private matter between the parties involved. At worst there's a conspiracy to evade IHT but, given the 7 year taper, the very most that could involve five years later would be two sevenths of 40%, or 11%, but only on the marginal amount, so scaled down further by the ratio "size of estate including gifts less £650k" to "size of estate including gifts". So if your grandmother left £1.3m (this does seem awfully unlikely in a climate in which people are diddlng debit cards for a few grand and buying Sky Sports subscriptions with the proceeds) these gifts (because that's what they would appear as, the person who may or may not have made them but whose money was used now being dead) would attract tax at 5,5%. 5.5% of, say, ten grand is £550. Do you think that perhaps HMRC have more pressing calls on their time?

You don't write, however, as though your aunt and uncle have inherited a million quid. How much did they inherit? Because unless it's half a million quid, your talk about IHT is just nonsense.

Bongowhack

It sounds like someone needs a refresher on the Forum Etiquette Guide!

A new user comes on the board to ask questions and seek advice on a subject they're obviously not an expert in and you berate them for not knowing the ins and outs and for talking 'nonsense'. Classy.

The whopping sticker at the side of their post is there, pointing out that they're a Newbie and asking people to be especially nice. Under the circumstances, where the OP is in a quite emotive situation, I think a softer approach would be more productive.

Yorkshireman99

Well said! Sadly some people make a habit of it.