Money Moral Dilemma: Would it be wrong to borrow from the interest on my sister's inheritance?

Izzy69

Just spotted that this was posted by a member of MSE staff and I strongly suspect I have been duped into taking part in a totally fictional debate. Honestly I feel violated and this is not what I expected from Martin Lewis and his team.

mlz1413

Not everyone is good with money!

My fella would definitely have frittered away £'000s because he had £'000s. He would be of the opinion it will be fine and then go to the bank one day to find it was empty and have a very little if anything to show for it

If the OP says the sister worries about living off the money then be NICE and give advice on that. Giving your opinion is not advice!

OP if you have been paying tax on the interest earned then you need to show your sister the workings and ask to take that back.

Then ask if she wants the arrangement to stand so you take that value annually or if money ilshould be moved to her account but with two to sign.

aintreemaid

https://forums.moneysavingexpert.com/discussion/comment/82107045#Comment_82107045

I took the £20,000 to be the interest that has accrued in the account, not the tax that the OP has paid but, on re-reading it, it could be either.

Pollycat

https://forums.moneysavingexpert.com/discussion/comment/82108106#Comment_82108106

If the originator of this MMD had posted the full information regarding the circumstances around the reason for putting the money in an account in someone else's name, then people really could comment.

Then the comments might not seem so 'harsh and judgemental'.

As things stand, we have only the few sentances provided by MSE staff.

We don't know of the originator of this MMD has a sibling who is vulnerable.

We don't know if there is a 'dodgy' reason for this arrangement.

As you said "I would talk to my sibling about it first'.

And that is exactly what the originator of his MMD should do.

Bestfordeals

Only with your sister's agreement, but first you are entitled to withdraw the tax you have had to pay on the interest.

BNJ

You are owed the amount of tax you have paid. Explain this to your sister and THEN take that from the account..

Then ask if you could have a short term loan and pay interest of (say) 3%/year on it for your building work. She has the right to say no of course.

Finally, suggest she takes the money and invests it in ISAs (up to the limit each year, see Martins advice on which)

sclare

Putting this money in your name was an insane decision which could have all sorts of major and negative repercussions for each of you

If your sister hadn't wanted to be able to access the money yet, an account should have been opened in her name, but with the account number etc not made available to her. Giving you LPA would have enabled you to run the account for her (including paying her tax out of it) and if at some point she needs to buy a home, for instance, you could release the amount information.

As things stand, if you die, the money is lost to her, and becomes part of your estate.

Hammer56

Wow. Between the two of you, you are donating substantial sums to the government for no good reason.

Why haven’t you had grown up conversations about investing it, using your/her ISA allowances every year.

Even Premium Bonds would be better than how you have it at the moment.

You have to have a proper conversation with her before tapping into her interest, and also about how to address the future issue of giving it back to her, and why you have rather than her. Bank scrutiny related to money laundering has ramped up in recent years, likely after the money came to you. Even if you try to gift it back to her, questions about where it came from in the first place will arise. Since she “gifted it“ to you (although there is no paper trail to support this), the bank may be obliged to flag the potential money laundering. Then even though it was an inheritance and legitimate, whatever it is that she’s trying to hide/avoid may come out into the open, even it is just tax avoidance on her part because she would pay tax at a higher rate than you.

It’s a bit mad, money is being lost in tax, and it needs sorting out.

Hammer56

https://forums.moneysavingexpert.com/discussion/comment/82108350#Comment_82108350

I think (or at least I assume) that all the Money Moral Dilemmas are posted by a staff member, as it is a selected question featured in a specific weekly feature. How the questions get submitted and picked I don’t know, they usually sound genuine. Whether they get tweaked to hide personal details or tidy up the writing I can’t say, but I’ve never had cause to consider that they were entirely made up.

Pollycat

https://forums.moneysavingexpert.com/discussion/comment/82109862#Comment_82109862

MSE staff have confirmed a number of times that the MMDs are genuine.

However, they radically reduce the content of the MMD sent in to provide a 'point of debate'.

After pages and pages of 'debate' on one MMD, the original author popped up and posted exactly what they had submitted to MSE.

It contained far more information which would have eliminated the majority of discussion on the thread.

In fact, here's a MMD where the originator popped up and posted what they'd submitted to MSE:

Money Moral Dilemma: Should we help pay for the fence our new neighbours put up? - Page 10 — MoneySavingExpert Forum

Personally, I'm not sure what the originator gets out of doing a MMD instead of posting directly on the forum.

I suspect the MMDs are a way of encouraging new forum members after reading the weekly email.