protecting my sister's money
cash_mad
Forumite 19 Posts
Hi, all - I have a situation to ask about...here goes...
My sister & her partner of 30 years have sold a property & want to rent a flat while they look for another place to buy.
However, they have left the entire amount in one bank - a large one, but this is worrying me. I do know that their joint account in this bank is only protected up to £150,000.
There is quite a bit more in there, though.
When I pointed this out 'what happens if bank goes belly up?' the response was horror from my sister & lofty assurances from her partner that it wouldn't happen.
The atmosphere got tense, & whilst her partner is a sweetie, I think he's out of his depth here.
I suggested to my sister that she remove her 'half of the money' - leaving the protected amount in the bank, & she could 'loan' me the unprotected amount to spread around my accounts - as I sold a property a few years ago & did just this.
She & I are close, & trust is not an issue - I am giving her a witnessed letter & a repayment date.
I had suggested that she opens a couple of bank/building soc accounts herself, but they are in currently in a hotel until their rented flat can house them, in three weeks, so that would be difficult.
(Once in the rented flat, with proof of residence, she will open bank accounts with the returned 'loan' from me.)
Hence my bright idea to 'borrow' from her.
I know that my own estate would incur inheritance tax whilst guarding this money, but it would still be worth it as I cannot see her lose so much due to her partner's trusting stupidity.
Would this work ?
Please can anyone advise? Thank you.
My sister & her partner of 30 years have sold a property & want to rent a flat while they look for another place to buy.
However, they have left the entire amount in one bank - a large one, but this is worrying me. I do know that their joint account in this bank is only protected up to £150,000.
There is quite a bit more in there, though.
When I pointed this out 'what happens if bank goes belly up?' the response was horror from my sister & lofty assurances from her partner that it wouldn't happen.
The atmosphere got tense, & whilst her partner is a sweetie, I think he's out of his depth here.
I suggested to my sister that she remove her 'half of the money' - leaving the protected amount in the bank, & she could 'loan' me the unprotected amount to spread around my accounts - as I sold a property a few years ago & did just this.
She & I are close, & trust is not an issue - I am giving her a witnessed letter & a repayment date.
I had suggested that she opens a couple of bank/building soc accounts herself, but they are in currently in a hotel until their rented flat can house them, in three weeks, so that would be difficult.
(Once in the rented flat, with proof of residence, she will open bank accounts with the returned 'loan' from me.)
Hence my bright idea to 'borrow' from her.
I know that my own estate would incur inheritance tax whilst guarding this money, but it would still be worth it as I cannot see her lose so much due to her partner's trusting stupidity.
Would this work ?
Please can anyone advise? Thank you.
0
This discussion has been closed.
Latest MSE News and Guides
Replies
If it's a properly documented loan, why would it be counted as part of your estate for inheritance tax?
You may mean well but how is this any of your business?
They're functioning adults. If you've alerted them to a potential issue and done the research and got the forms for them, you should leave it at that.
By the way .... there were similar issues 10 years ago when I sold and the limit was only £35k. It took me ages to open up loads of accounts all over the place and I've still got odd pots here and there as some accounts were hard to open and some I opened but never put money into .... it all got a bit out of hand
I know some banks have gone under in the past - and do .... but you can't really "interfere" in somebody else's marriage over money, no matter how well intentioned you are.
Simply give them the tools to do the job, by locating the best bank, close to their house (accessible) and get the forms for them to fill in.
missbiggles1, I know it looks like I should mind my own business - but she's my sister, & I am worried that she could lose her life savings (avoidably).
PasturesNew, good suggestions - I shall go down that road.
Thank you all again.
No, it wouldn't. It would be debt which would have to be repaid before the total of your estate could be calculated for IHT.
If you had a mortgage of £500k, do you really think your estate would have to pay inheritance tax on that amount?
Even before the "temporary high balance" law was introduced, the chance of the Government allowing someone's house purchase money to disappear in a bank collapse is virtually nil. Modern civilisation relies on people feeling their money is safe in the bank. Everyone who had savings in Northern Rock was compensated in full.
It might have saved a lot of time and worry for your sister if you'd checked your facts before trying to make your brother in law look stupid.
You've pointed out the possible pitfalls, now leave them to it.
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton
No it wouldn't, because the asset (the cash you had deposited on behalf of your sister) would equal the liability (the amount you owe your sister). Zero effect on IHT.
I think you might be right about some people being out of their depth.
There is absolutely no need or sensible reason to transfer any of the money to your name in any guise.
LB moment - March 2006. DFD - 1 June 2012!!! DEBT FREE!
May grocery challenge £45.61/£120