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

Jemma01

Surely you had a conversation with the sister about the taxes you were going to pay? Surely there was an agreement that the money would be taken from that account? I can't imagine that you both agreed to voluntarily pay it for her 🤔.

Assuming the normal course of action that you paid from her account, you have no business doing anything with her money she did not authorise. If you are tempted, do the right thing and return the money. Don't violate the trust. If no conversation about the taxes had happened, then about time!!

Josh107

Hope she's not on state and local benefits, based on savings & accounts declared. Some sort of trust fund would deterred her living off it. Odd

itsthelittlethings

Yes, it's wrong.

jedav

https://forums.moneysavingexpert.com/discussion/comment/82106997#Comment_82106997

Agreed. Quite why you should pay tax on money that morally belongs to your sister is beyond me. The money should be in her name as, in the eyes of the financial institution holding it, it currently belongs to you unless there is some marker on the account such as it is held in trust. However, the two of you might consider putting it in an account in her name that you control the access to, so that she feels that she won't just spend it.

You mention your tax liability as "over the years", suggesting that you have held the money for some time. Essentially this situation is likely to be considered as her gifting you her inheritance, you are currently the owner, and so "giving" it back to her by putting it in her name, might be considered by the authorities as gifting it back to her, leaving a potential IHT liability on your estate for the next seven years (depending on the total of your assets).

It might be wise to get professional advice.

WindfallWendy

I treat my interest income as gross salary income: Any tax owed on it, is paid for from the gross value of the interest income. I.e. If I have £2000 of interest and am due to pay £200 tax on that income, then I pay the tax from the £2000. The rest of the interest is added to my savings accounts.

I don't understand why the person holding the accounts wouldn't be doing this - so I think the suggestion that they are "paying the tax" is more accurately "administering the tax owed" as they are not in anyway financially less well off (unless of course their salary is at a tax threshold, and interest takes them over it).

Of course, it is entirely wrong that the sister isn't managing the money herself. Sounds like there is plenty enough money to cover an accountant who can put the money somewhere safe.

And then when you point this out to your sister, ask her if she can lend you the money.

Without wishing to be presumptive, did the the OP get a similar level of inheritance? Where has all theirs gone??

JayD

Ad you have been told here, multiple times, YES IT WOULD BE WRONG!

But you could explain everything, as you have done here , and ask her.

What have so many of these 'dilemma' people got against talking to those they are having concerns about?

Jemma01

https://forums.moneysavingexpert.com/discussion/comment/82114213#Comment_82114213

looking for someone to justify the wrong doing...