Giving a monthly amount to a friend to save for me in a share scheme - legalities?

fimonkey

Malthusian said:

km1500 said:

If you are just lending them money then this will be fine - all you need is a declaration of trust or loan agreement specifying they need to repay you the money you lent on the terms you agree

If on the other hand the intention is that the shares are yours then this is not advisable as it would be a breach of the terms and conditions of the share scheme I am certain

If the terms of the "loan" are "I agree to pay you whatever the shares are worth" then this is in reality a trust arrangement in all but name.  I.e. the shares are the OP's property either way. I.e. don't go there.
If he is a good enough friend to trust with this wizard wheeze then he is a good enough friend to not try to get him sacked.
At which point you would lose your money, as even trustworthy friends can't repay loans with money they haven't got, because they're on the dole and skint. (Even skinter when they were working for free by turning down free money from their employer.)

Never heard the term 'Wizard Wheeze' what does it mean?
No intention of acting illegally, just wanted to loan my friend the money so they could get max benefit of the share scheme and in return I get my money back (with interest if that is appropriate)
Thanks

masonic

fimonkey said:

How do I word, or access, a declaration of trust/ loan agreement please?

It's not a good idea to crowdsource the wording for a legal agreement on a public internet forum. Use a solicitor.

fimonkey said:

However at the end of the term I would expect my money back with a certain amount of interest (to be decided, either CPR, or a set interest amount, or the price the shares increased).

Hopefully neither of you will need CPR at the end of this venture!

Daliah

fimonkey said:

However at the end of the term I would expect my money back with a certain amount of interest (to be decided, either CPR, or a set interest amount, or the price the shares increased).

What if the share price crashed and your friend hasn't got enough capital to pay your money back, not to talk about interest?

eskbanker

fimonkey said:
In response to another question: 

I do not have any ISA (S&S or cash). I did used to invest a few years ago. With only £100p.m it would take some time to work up a decent amount in an S&S ISA given fees and charges. I would first need to save a decent amount (about £10k) to then invest as lump sum and then start to drip feed.

Not at all - if you have £100pm (and a sufficient separate cash reserve) then you could easily drip-feed that into a S&S ISA, many of which won't charge for fund purchases, so no need to wait until building a lump sum, especially if you were planning £10K at £100pm, i.e. 8+ years!

Daliah

fimonkey said:: 

I do not have any ISA (S&S or cash). I did used to invest a few years ago. With only £100p.m it would take some time to work up a decent amount in an S&S ISA given fees and charges. I would first need to save a decent amount (about £10k) to then invest as lump sum and then start to drip feed.

ISAs don't need to cost the earth, and you don't need lots of money to start one. Cash ISAs are free (though not much use for BR tax payers). Some S&S ISAs come with very low %age charges, see https://www.moneysavingexpert.com/savings/stocks-shares-isas/#doitforme

Are you eligible for a LISA?

What about your pension? Do you have one at work, are you maxing it, and maxing your employer's contributions?

IMO, anything you can do wholly in your own name is massively preferential to a scheme with a friend, however well you know the friend, and however well he means. He has no control over the share price, and putting all he can afford on a single share sounds the highest risk investment decision anyone can take (short of crypto)



NB. Do you have a readily accessible emergency cash fund?

jimjames

Friend of mine did this. Ended up fine with getting the money at the end and buying the shares but as they were in Provident Financial they still ended up losing a lot of money as the price crashed shortly after getting them. Personally with the complications it seems a much better idea to invest your own money.

MX5huggy

£100 a month is the perfect amount to start an S&S ISA with Vanguard they charge next to nothing ( 0.15% ) no trading fees I’ve been doing £100 for the last 20 months into my daughters JISA the £2000 is worth £2001.94 today (it’ll be negative tomorrow). 

Stubod

This is a bad idea on so many levels, and if you do go through with this you need to accept that you may well lose everything you have "invested".

There must be a safer and better way to "save/invest" £100 a month for 5 years?

george4064

Out of interest, what makes it a ‘great company share scheme’? Are there decent terms such as a good discount available or maybe matching shares are offered?

Also, which company is it?

Irrespective, if you’re deciding between loaning your friend £100pm for some interest in return vs investing that money in a S&S ISA/LISA/Pension, you are far better off investing that money. Both from a financial and minimal hassle point of view.

Albermarle

With only £100p.m it would take some time to work up a decent amount in an S&S ISA given fees and charges.

As mentioned in other posts, you seem to have a mistaken impression of how a modern S&S ISA works. Charges have come down a lot with online competition and smaller investors are encouraged and not penalised.