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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To feel uncomfortable about this financial decision - or am I just a control freak?

56 replies

HazzaB · 12/09/2013 11:19

I'm completely happy about how DH and I split our finances and what we each contribute. But we don't have any savings and that makes us both uncomfortable. DH's father, very kindly, transferred a studio flat into his name many years ago which we have recently sold. Profits from that sale are to be our nest egg for the future for our DCs - we're talking £15k. FIL has asked us to give him the £15k, originally because he needed to borrow it and would pay us back. Now he says because he'll invest it in stocks & shares and will be able to give us a better return than if we put it in ISAs etc. FIL is an ex-accountant but likes to fly 'below the radar' as he puts it and avoid tax. He has a criminal record from the 1970s for fraud. He's not clear about exactly what he'll do with this money or what our return would be. He says we can have it back whenever we ask for it. I want to just invest it as we decide even if that means less return. DH doesn't want to antagonise his father and says we should just give it to him because there's no way we wouldn't get it back and if his dad has asked us we should trust him. AIBU to feel uncomfortable about this? WWYD?

OP posts:
Viviennemary · 12/09/2013 11:23

So your father had gifted the flat to your DH. The flat has been sold. And now your FIL wants his money back. I think you should on this occasion leave it up to your DH to sort out with his father. Your DH wants to give the money back which is admirable. It is your FIL's money after all.

MooncupGoddess · 12/09/2013 11:27

Either it's your money and your decision as to how to invest it, or it's your FIL's money and his decision. This halfway house where he invests what is allegedly your money but without your input and in his name is a really bad idea. What if he falls under a bus tomorrow?

Snoopingforsoup · 12/09/2013 11:27

Sounds like he may be money laundering in a convoluted way.
I wouldn't let him have the money. A good FA can tell you where to invest for yourselves.
Large property transactions and money/property transferring names rings bells for me.
Something's amiss.

Snoopingforsoup · 12/09/2013 11:31

Plus, he hasn't gifted him the flat at all if he expects the money back. He's basically held 15K in your DH's name for a few years.

Fraudsters are good at hoarding money in such ways. So are tax dodgers!

Original poster
HazzaB · 12/09/2013 11:33

Mooncup that's exactly what bothers me - this halfway house. If he just wanted the money back because he said it was his money, then that's fine and of course we'd just give it to him. But that's not the case. He transferred the property, we've paid all the taxes and maintenance and so on, we've sold it and declared on tax return and now have the remaining profit. He's not saying that it's his money - he says that its ours - but he wants it to 'invest'. But we can have it back whenever we ask for it. It just seems odd to me. Maybe we should just give him the money, tell him its his, and be done with it (no savings but then that's where we are already now).

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Bogeyface · 12/09/2013 11:36

You need to explain to your DH that if your FIL is up to anything dodgy tax wise then you could both be implicated too and end up with criminal records of your own.

You need to say no to your FIL and stick with it, I would not be giving a penny of my money to a man with convictions for fraud.

fackinell · 12/09/2013 11:37

Can't you say you've part paid off your mortgage or something? Or spent at least half? Very rude to ask for a gift back. I agree, it sounds dodgy as... Wink

Bogeyface · 12/09/2013 11:37

Oh and it is your money. You have paid out on the flat all these years, you will have to pay tax on the profit, so it is yours.

Hand it over to him and you will never see it again.

Original poster
HazzaB · 12/09/2013 11:42

Thanks all. I thought it felt dodgy. Will talk to DH tonight.

OP posts:
TheFuzz · 12/09/2013 11:45

Don't hand it over. Just invest it somewhere safe. Stocks are a fools game anyway. Only invest what you can afford to lose.

So, if he gambles this £15k away, which is what will happen, can you afford to throw this down the pan ?

jacks365 · 12/09/2013 11:45

As someone who has the dubious honour of having been married to someone who looks for every tax loophole going most definitely not legal I would advise you to have nothing to do with it. Invest the money in something you are happy with. If your fil is money laundering then handing it back to him will make you appear an accomplice where as treating the proceeds as your own and investing it openly would go in your favour if there ever was an investigation. You need to protect yourselves and your dc which means having no more financial connections with someone you know is dodgy.

minibmw2010 · 12/09/2013 11:47

I'm sorry but it sounds like a classic money laundering to me. Plus your FIL's comment about having it back whenever you want doesn't ring true - if he has it all invested then it won't be that easy to just take it out Hmm

oldgrandmama · 12/09/2013 11:48

Don't do it. Sounds 'iffy' to put it mildly. The property was legally transferred to your husband, it's now sold, all above board, and you've £15K to the good. Keep it to invest as you wish (with proper advice, of course). I know it's awkward, but given your father in law's past record, it's the only sensible thing to do, and your husband, however much he respects and loves his dad, should appreciate this.

propertyNIGHTmareBEFOREXMAS · 12/09/2013 11:50

I agree that it sounds concerning. Can you say that you now want to use to use all the money to pay a chunk off your mortgage as that effectively triples the money (the general rule being that a £1 of mortgage borrowed costs £3 to pay back)? Say that will halp you free up money forthe kids when they are older. That would perhaps be the best way out of the situation (and of course you don't actually need to pay it off mortgage).

TheFallenNinja · 12/09/2013 11:51

Tell him you've spent it.

Thymeout · 12/09/2013 11:52

Someone will know better than me, but isn't there a tax obligation on the profit you have made from selling the property? Capital Gains tax?

Could you come up with an alternative plan for the money, e.g.set up a trust for your dc, that you could present to fil as a fait accompli?

HatieKokpins · 12/09/2013 11:58

An accountant writes: DO NOT DO THIS. Please! If the handing over the property was done legally and contractually, your FiL has no claim over the proceeds of the sale - it sounds properly like your FiL has his own plans for your money.

HatieKokpins · 12/09/2013 11:59

(basically, anyone who "guarantees" a "better return" than anything available on the open market it up to something. That's just my own personal opinion, but it's one I firmly believe). Also, you will sort out your Capital Gains liability, won't you?

Original poster
HazzaB · 12/09/2013 11:59

You're a good bunch you MNetters. Thanks. My gut said to have nothing to do with it. My DH doesn't want to upset his Dad. I'll print out the thread for DH and point out that it isn't really a case of upsetting his Dad, it's a case of potentially putting us and our DCs in the middle of whatever his Dad is up to. I'll let DH decide whether we then say no or suck it up and just give him the 15k as a gift, and go back to square one. I know which one I'll argue for! But am not going to get in the middle of him and his Dad.

OP posts:
LessMissAbs · 12/09/2013 12:02

Was the studio flat your main residence? At any time?

Is the 15k profit after CGT has been paid?

You have no obligation to return the money to him. If, morally, you make a decision to gift the money back to him, perhaps state this in writing but do not be a party to any further transactions involving it.

I also agree it sounds like money laundering, but perhaps at the front end rather than now.

Original poster
HazzaB · 12/09/2013 12:02

Yes we've sorted out CGT liability. We've got a tax accountant and given everything to him for the return and CGT. So that's already all taken care of.

One question you just made me think of - if my DH decides to give FIL the 15k back as a gift (instead of investing it for our DCs.. which will be a whole other thread), would we still be implicated in whatever our FIL does with it, even if we never see the money again or profit from it?

OP posts:
JoinYourPlayfellows · 12/09/2013 12:04

"I'll let DH decide whether we then say no or suck it up and just give him the 15k as a gift, and go back to square one. "

15K minus every penny you have spent on that flat since he gave it to you.

There is no reason why you guys should be out of pocket because of this "gift".

Original poster
HazzaB · 12/09/2013 12:04

LessMissAbs - yes the 15k is the profit after CGT has been paid

OP posts:
HatieKokpins · 12/09/2013 12:06

You'll be passing a potential tax liability to your FiL in giving him a gift that large (but only if you die within the next seven years), but that's about all. I suggest you get some legal advice about how you manage it, if you want to ensure you have no liability in anything he may do with it.

Original poster
HazzaB · 12/09/2013 12:07

I know there's no reason we should be out of pocket, and we won't actually be out of pocket. We have 15k left having paid all our bills on the property, legal fees, CGT. What we had hoped for was that this sale would give us a nest egg. If FIL decides he wants the money and DH decides to give it to him, then that will be a v bad decision on DH's part but we won't actually be out of pocket.

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