AIBU for not wanting my friend to do this? (Money laundering)

(23 Posts)
BackToLondon Fri 10-Jun-16 22:46:34

My friend who lives abroad (EU country) has told me that she rented a flat in London for one month to have an address to open a bank account. She needs a bank account and be a UK resident on paper, as her father paid in a higher six digit amount of money into a UK bank account in order to avoid paying income tax on it in his (and my friend's) country of residence. Now the bank is asking where the money is coming from and the father got a little bit scared, so wants my friend to put the money in her bank account instead as they think if she is a UK resident she won't have to pay tax on it. He suggested to buy a property in the UK to get 'rid of the money'.

I am not an expert on this, but to me it sounds like that it could get her in a lot of trouble. She doesn't understand the issue at all.

Surely that is not legal?

AgentZigzag Fri 10-Jun-16 22:50:16

If she's still pretending not to know what the issue is even after you've told her then I'd leave her to it.

What more can you do?

Radyward Fri 10-Jun-16 22:51:31

Myob

Buckinbronco Fri 10-Jun-16 22:55:11

What can you do?

EveryoneElsie Fri 10-Jun-16 22:56:47

Break contact with her if she is too cowed to say no to her father. These kinds of problems can have unexpected fallout.

BackToLondon Fri 10-Jun-16 22:57:35

Buckinbronco
Nothing really, it's just she is my best friend and I don't want her to get into any trouble. Her father is taken advantage of her, usually there isn't the best relationship between the two of them (he left her and her mother when she was a child) and I feel she does it only to please him.

emsyj Fri 10-Jun-16 22:57:40

I'm not sure why they think that the daughter's bank won't ask where the money came from - any UK bank will be subject to the same money laundering rules as all the others.

Leave them to it. Have nothing to do with it.

LurkingHusband Fri 10-Jun-16 23:02:27

Is her father a Nigerian general ?

joangray38 Fri 10-Jun-16 23:02:54

Due to the money laundering rules any solicitor: bank etc will want to se proof of where her money has come from.

Senpai Fri 10-Jun-16 23:04:40

It'll bite her in the ass eventually. Look at panama papers.

I would advise her not to, but if she does it anyway, don't accept any large gifts from her. You don't want to become involved.

Bellebelle Fri 10-Jun-16 23:05:06

I don't think this is money laundering as that involves moving around money which is the proceeds of crime and/or is being used for illegal activity but moved around so that the source cannot be traced. So unless you suspect that her father is involved in illegal activity she's probably not breaking the law on that basis.

However it may be some sort of tax evasion but that all depends on how the money was earned, any tax already paid on it and the tax laws of the country it came from.

It's highly likely that if she puts the money into her bank account AND if she tries to use it to buy a property she will each time be asked to prove where the money came from under money laundering rules as banks and solicitors legally have to check this now so at some point she'll need to declare how she got the money.

TrollTrekkingAcrossTheUniverse Fri 10-Jun-16 23:39:37

Not only is it potential tax evasion but it may be ineffective tax evasion - a month may not be long enough to establish UK residency.

I'd steer well clear, and change the subject if your friend brings it up.

I'd also consider suggesting that your friend seeks professional help / counselling if as an adult woman she still finds it impossible to stand up to her father. I know from experience how difficult that type of relationship can be, but addressing it is so worthwhile.

clarrrp Fri 10-Jun-16 23:47:01

Now the bank is asking where the money is coming from and the father got a little bit scared, so wants my friend to put the money in her bank account instead as they think if she is a UK resident she won't have to pay tax on it.

And she doesn't think that her bank will ask her where this sudden amount of money has come from? Surely no one can be that dim to think that a newly opened account that suddenly has a six figure sum in it won't attract attention?

CoolCarrie Sat 11-Jun-16 00:22:50

If she buys property with the cash, the bank will definitely ask questions about where it came from, and she will have to jump through hoops to prove it isn't dodgy. Give her advice not to let him take advantage of her & don't get involved further.

Skittlesss Sat 11-Jun-16 07:36:30

They'll struggle to buy a property over here with it as the conveyancing process involves money laundering checks and proving where the money has come from.

Kwirrell Sat 11-Jun-16 07:40:02

Friends of ours had the sale agreed on their house earlier this year. There have been several delays and now the chain has broken completely. The reason is one of the property owners has been money laundering.

Advise your friend to stay away from this.

SelinaMeyerVP Sat 11-Jun-16 08:04:51

Surely the banks will do credit checks and find she has none. Don't you have to prove nationality, longer residency, bills/statements/wage slips etc to open a bank account??

The banks are going to be all over this

Lol Nigerian General smile

myownprivateidaho Sat 11-Jun-16 08:14:09

She needs to talk to a lawyer.

Ememem84 Sat 11-Jun-16 08:27:49

As far as I'm aware to become uk resident there are a number of "tests" you have to satisfy. The simpler ones being staying at least 90 days in and uk tax year in the uk, and where you're money is spent is another factor.

my uncle is from jersey. He rents a flat in the U.K., owns a flat in jersey and spends all his money there, has a doctor etc. He was claiming to be non uk resident. Until hmrc caught up with him. He now has to pay uk tax.

Ememem84 Sat 11-Jun-16 08:28:08

Sorry - there being uk.

Janecc Sat 11-Jun-16 08:32:37

Residency at a specific address for uk tax purposes would generally be six months of good quality residency. IE bills, council tax, general purchases all registered to the uk address.

She could get herself involved in a fraud investigation. Her father earns a lot, he needs to pay his tax in his country of origin and not burden his daughter. The British government has said it is cracking down on property purchases through money laundering and any funds obtained by tax evasion will be scrutinised as well.

Janecc Sat 11-Jun-16 08:35:02

Cross thread yes, 90 days - I'm thinking about a move within the uk and tax purposes for principle primary residency.

LunaLoveg00d Sat 11-Jun-16 08:59:33

You can't just pitch up at a UK bank and pay in "a high 6 digit sum" - assuming half a million plus - no questions asked.

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