AIBU to think this is dodgy? Opinions please!

Original poster

TurkishDelight57 · 13/01/2022 21:28

Before anyone asks, I’m not implying my parents are dodgy or trying to get me into trouble 😂 Their intentions are 100% genuine and this person genuinely does owe them money, and it would make sense for him to pay me rather than for them to go through the trouble of filling out paperwork to send me money and pay exorbitant bank fees. I just don’t know the regulatory and tax implications of something like this in the UK

OP posts:

HiJenny35 · 13/01/2022 21:50

Well this is a complex one. All UK residents can gift a tax free gift of up to £3000 per year to their children. If it comes from the random man that wouldn't be the case you would need to declare it and pay tax on it, you especially need to consider if that would bump you into the next tax bracket. However I'm assuming your parents aren't uk residents anyway? If they are non UK residents they can send you as much as you like and the UK will treat this as a gift and not tax it (unless they die within 7 years in which case you could possibly be need to pay inheritance tax on the amount) so basically unless the country they are in changes very large tax related fees for gifting amounts overseas (which some countries do) it would be far better for your parents to send you the money directly than this man.

lljkk · 13/01/2022 21:50

It's not illegal or needs declaring or inherently dodgy. If the amount is very large & the friend dies soon (< 7 years ?) then maybe there would be tax implications,.

nonevernotever · 13/01/2022 21:51

Tax implications depend on the amount . I think you can be gifted up to £3k in a year without tax implications (double if it's to pat for your wedding). I can't see problems with him repaying them by transferring it to you, (provided of course that all parties involved are correctly declaring their income in the appropriate jurisdictions and paying tax correctly so not involving you in formal or informal money laundering schemes)but I'm no expert, and I think if you're in any doubt at all about the caveats above or anything else she should consult a specialist.

nonevernotever · 13/01/2022 21:52

Ah, I took too long to type and more knowledgeable people have answered. 😊

Cloudfrost · 13/01/2022 21:55

Can't ur parents just use western union or another service like that that doesn't include bank transfers? Or wait to give u the money in person?

Original poster

TurkishDelight57 · 13/01/2022 22:07

I believe friends can also gift up to £3000 tax free. There are other sources that are saying that as long as I don’t earn money from the gift I receive ie; I don’t invest it or use it to fund a business I don’t have to pay tax at all...

They can’t give me the money in person because it’s not a practical amount to use in cash. Western Union isn’t actually all it’s cracked up to be, and they only allow money transfers for specific purposes and gifting is not one of them

OP posts:

Ponoka7 · 13/01/2022 22:13

I've known people who are applying for the right to remain etc who've had similar done and it's been ok'd by the home office. Some have had the recourse to public funds given and the DWP haven't batted an eyelid over it.

Original poster

TurkishDelight57 · 13/01/2022 23:04

I mean if asked, I don’t even plan to go into details about the loan, my parents etc. I’ll just say it’s a gift from my very generous friend in the UK - I don’t think he does anything dodgy for a living, I don’t know him that well. Not sure if I could get blamed for his money being obtained by illegal means

OP posts:

Original poster

TurkishDelight57 · 14/01/2022 00:19

The other alternative is that the friend gives me cash and I just spend the cash. However, I would like to deposit some of that cash into my account myself- maybe around £1800 or so. Would this be an issue? Do banks raise questions about high value cash deposits?

I don’t know which option is preferable

OP posts:

Keepingthingsinteresting · 14/01/2022 00:55

@TurkishDelight57

The other alternative is that the friend gives me cash and I just spend the cash. However, I would like to deposit some of that cash into my account myself- maybe around £1800 or so. Would this be an issue? Do banks raise questions about high value cash deposits?

I don’t know which option is preferable

You work in financial services, but don’t know whether banks ask source of funds questions on large cash deposits…?

The tax is probably a red herring, and one could draw up a piece of paper whereby your parents direct him to pay x to you in settlement of his debt to the. It would at least be clear it’s a gift from your parents. It isn’t possible to be sure of the tax treatment without understand the tax treatment in our parent’s jurisdiction, but depending on the amount involved may all be practically low risk.

I’d be more worried about where the friends gets his money from, if you don’t know him well, as even if you’ve not done anything wrong would be uncomfortable to explain given your role.

VanGoghsDog · 14/01/2022 01:02

@HiJenny35

Well this is a complex one. All UK residents can gift a tax free gift of up to £3000 per year to their children. If it comes from the random man that wouldn't be the case you would need to declare it and pay tax on it, you especially need to consider if that would bump you into the next tax bracket. However I'm assuming your parents aren't uk residents anyway? If they are non UK residents they can send you as much as you like and the UK will treat this as a gift and not tax it (unless they die within 7 years in which case you could possibly be need to pay inheritance tax on the amount) so basically unless the country they are in changes very large tax related fees for gifting amounts overseas (which some countries do) it would be far better for your parents to send you the money directly than this man.

This is incorrect in so many ways.

There is no tax on any gifts, of any amount, from anyone to anyone. If you think there is, link to that law.

The OPs greater risk is being asked why she has the money for anti money laundering reasons, which she will know all about as she works in financial services, so it's a bit odd that she's asking. The money is legit but it might be hard to prove that which could mean the bank puts a stop on her account and flags it while they investigate. Depends how much it is really though. £1k, probably no issue. £100k, issue.

This issue could also arise when she tries to use the money or move it to another account. When you buy a house, for example, you get asked where any cash you use has come from and you have to show a legitimate trail.

VanGoghsDog · 14/01/2022 01:03

£1,800 isn't high value. It will be fine. But a bank transfer would be better.

elelel · 14/01/2022 01:06

@TurkishDelight57

The other alternative is that the friend gives me cash and I just spend the cash. However, I would like to deposit some of that cash into my account myself- maybe around £1800 or so. Would this be an issue? Do banks raise questions about high value cash deposits?

I don’t know which option is preferable

£1800
Isn't a high value cash deposit.

VanGoghsDog · 14/01/2022 01:07

@TurkishDelight57

I mean if asked, I don’t even plan to go into details about the loan, my parents etc. I’ll just say it’s a gift from my very generous friend in the UK - I don’t think he does anything dodgy for a living, I don’t know him that well. Not sure if I could get blamed for his money being obtained by illegal means

Yes you could. Proceeds of crimes. It could be siezed later.

You say you work in financial services - have you never done the incessant mandatory training?

Shamoo · 14/01/2022 01:31

Listen Op, nobody is going to care about what seems to be a pretty small amount of you are saying a large chunk of that is £1800. So yes there are money laundering rules blah blah blah but nobody is going to give two hoots about a family friend transferring you a few grand.

Floralnomad · 14/01/2022 01:35

Nobody is going to bat an eyelid at £1800 being deposited , it’s not a high amount .

mindutopia · 14/01/2022 02:02

I don’t know about the money via the friend (though would be worried about if they died and also if you ever planned to use that money to buy a house). The money laundering laws are very strict now and we had to provide a lot of evidence of where our deposit came from and why.

That said, my family lives abroad and transferred me a very large sum of cash. They used XE. It was really easy and very aboveboard.

mindutopia · 14/01/2022 02:03

Also given it’s a pretty small amount, can they not just use PayPal?

notangelinajolie · 14/01/2022 02:30

Is this dodgy? Is this something I could get into trouble for? I work in financial services so I can’t be getting into trouble over money matters.

Will I have to pay tax on this money?

You work in financial services. Why are you even asking this question?

Littlescottiedog · 14/01/2022 02:38

My dad gave me £15000 last year after he inherited. I never paid any tax on it

Aria999 · 14/01/2022 03:37

Gift tax is generally the givers problem (normally only if they die and it impacts their estate) and is complicated for overseas givers.

Depends how much money it actually is and why you are concerned. You could get it drawn up in a document and singed by all parties as to the actual nature of the transaction, to give you extra assurance in case anyone asks.

Moonshine9 · 14/01/2022 04:07

@Littlescottiedog

My dad gave me £15000 last year after he inherited. I never paid any tax on it

I don't believe you need to. I was gifted some money from my DM and we looked into it. We understand that it will only be liable for inheritance tax if she dies within the next 7 yrs, and only then if the total estate is worth more than 325k (which it won't be).

VanGoghsDog · 14/01/2022 08:32

There's no such thing as "gift tax" in the UK.

pinkgin85 · 14/01/2022 08:36

Get your parents to send via wide.com (Transferwise) assuming it's available for their country. The best and quickest way.