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ADVICE WANTED savings tax

edited 30 November -1 at 1:00AM in Savings & Investments
6 replies 858 views
hayleycullhayleycull Forumite
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edited 30 November -1 at 1:00AM in Savings & Investments
just wondered if i could get some advice please.
Im married and we both work. My father is now living in a care home following a stroke. Both myself and sister have POA. We sold my fathers flat a few weeks ago. My father was adamant he didnt want the money(£157,000) to go into his bank account as he was "worried someone will take it"( he has mental capacity).I opened a new account in my bank and put the money in there. Our plan in the near future is to invest the money into another property more locally.
My question is based on tax. When i saw a friend today she informed me having that much money in my account can mean i am liable to pay a high rate of tax and it can cause big problems/implications for me. My tax code at work can change plus sometimes tax is payable at 40%. Ill be honest to say i was just clearly naive to this and it hadnt even crossed my mind!:(
Whats the best thing to do? just transfer back to dad etc

Replies

  • BoGoFBoGoF Forumite
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    Your friend is talking rubbish. The capital in the account won't affect your tax rate. However I do not think it was a particularly good idea to put it into an account in your own name (assuming thata what you have done). You could have still opened an account in your dads name with you as POA/trustee. Did you discuss this with the bank.
  • LintonLinton Forumite
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    I agree putting the money in your name would not be appropriate and could lead to problems (but not any tax!).


    You could put the money in his name in NS&I which pays a moderate rate of interest and has an unlimited government guarantee.



    You talk about usng the money to buy another property - is this purely for investment or is it the hope that will enable your father to leave the care home and live near you? If its the former I suggest that this would be foolish for many reasons which can be discussed in greater detail if appropriate, if the latter presumably you will need to wait to see how he progresses.
  • edited 27 February 2019 at 9:49AM
    ZandermanZanderman Forumite
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    edited 27 February 2019 at 9:49AM
    If you've used PoA to take your father's money and put into an account in your own name you're not working in the spirit, and possibly not the law, of the PoA.

    If it's his money it should be in his name - and the point of the PoA is that you can do that on his behalf, but still in his name.

    Any money in an account in your name becomes, legally, yours not his. So if you leave it there it isn't his money anymore - you've taken it from him.

    Very shaky grounds legally. I'd open an account in his name asap and move it there.

    Edited to add: re your tax question, your friend is talking rubbish! It would only impact your tax if the money was an income to you. But it's not, it's your father's money - so nothing to do with your tax. Except that it is because you seem to have put it your name - in which case technically it's now a gift from your father to you. Which is, as you have PoA, improper. As it's actually his money and your duty, as an attorney, is to look after his money, as his money, not move it to your account.
  • xylophonexylophone Forumite
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    You should not be holding your father's money in your name.


    This is not the proper course for an Attorney to take.

    You can open an NS&I account in his name as PoA - his money will be safe there.

    Income Bonds might suit - the interest can be paid into his own bank account.

    https://www.nsandi.com/income-bonds

    The interest belongs to your father and is taxable on him.

    https://www.moneysavingexpert.com/savings/tax-free-savings/

    You say that your father has capacity.

    Does he want to purchase another property as an "investment"?

    Do you intend to let it out?

    Have you looked into his duties as a landlord?

    Do you understand tax on property income?

    https://www.gov.uk/renting-out-a-property

    https://www.lawdonut.co.uk/personal/lasting-power-of-attorney/lasting-power-of-attorney-responsibilities
  • MalthusianMalthusian Forumite
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    See an independent financial adviser urgently before you dig yourself into an even deeper hole. Try SOLLA (Society of Later Life Advisers).
    hayleycull wrote: »
    Our plan in the near future is to invest the money into another property more locally.

    That would be unlawful as you would not be acting in your father's interests and exercising your duty to invest the money prudently.
  • hayleycullhayleycull Forumite
    67 Posts
    Fourth Anniversary 10 Posts
    thankyou for your replies. At present we are unsure if dad can live on his own but it is likely with carers etc. Buying a flat would be with the intention of him living there.
    He does have a bank account with us as POA named on it. I was foolish in putting it in my name based purely on what he was saying he wanted. I feel the best thing to do is immediately transfer it into his bank account.(he currently has an account with HSBC). Once that done i can then get advice as to the best account to then have it in.
    In answer to the question about if my bank were aware..yes they were. I went to santander and explained the situation at the time.
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