Brother has swindled DM out of over £100k- desperate advice please

[Unicornfairysoap]

Sorry I’m posting in aibu for traffic.

this is long, you may remember such threads as brother Pretended to dying DF to be in the navy to get money, pretend to be in mi6, threatened me with a multi billion £ law suit for saying he doesn’t have a PhD (he literally doesn’t, so it’s a stupid lie)

well DF died a few years ago and it’s been just dm, she lives 2/3 hrs away from my, brother lives closer. She works part time (20hrs a week) and gets my dads old pension and hers, which I’ve totalled as around £3.5k per month (no mortgage just bills). She’s been frequently crying to me she’s not got any money, I thought she was having me on a bit, but I had suspicions brother had claws in. Well she was visiting yesterday and broke down from not being able to pay her bills, she just kept repeating she’s not earning enough now, which she clearly is. The bills were only a few hundred too and she’s not the type to ask for money. I got quite concerned, and I noticed constant phone calls and texts coming in from brother. Now he’s the type that doesn’t contact unless he needs or wants something.

she went to the loo, and I snooped. I know it’s a total break of trust but I was genuinely concerned. I saw a list she’d wrote to him when he was telling her she was dead to him because she couldn’t give him £4k at the drop of a hat. The list went from 2019-2022 (so not even the last 18 months) and it detailed how she’d given him £120k over that time. He’s been going on luxurious holidays in that time. In a legal dispute with his ex. But he’s taking her to the cleaners and im genuinely worried. I looks like pure coercive control and an abusive relationship.

thing is i can’t tell her I looked and saw what I saw. She won’t take kindly to me calling social services or the police to talk with her, it will likely push her further to him.

shes 73 and he’s taken probably £150k at least

@Unicornfairysoap You have evidence that he’s a fantasist though, those crazy texts and the phone calls. Not to mention his gf. Could you argue that your Mum needs to be protected from these mentally unwell people? Just trying to think how you could protect her.

I think with the 'Government' document and the messages that he's sent, it's probably enough to prove coercive control, potentially gaining funds through deception or something like that. I'd absolutely be speaking with the police about him, and also telling him of his physically abusive history to you. This man is vile and needs to be stopped, I really hope you involve the authorities.

OP:

It is a crime if your DM has given him all this money without paying gift tax to the Treasury. You are not allowed to give more than £3,000 a year in gifts. Anything over that has gift tax to pay on it, and if it is not paid, it is fraud, and fraud is against the law.

You should be able to stop him using the law, and I cannot understand why, if you consulted a solicitor, they did not tell you. Why would the lawyer not tell you about fraud? It seems strange to me, because even if it is not a crime to take money from your DM, by not declaring it for gift tax, the crime of defrauding the Government is worse.

Report tax fraud or avoidance to HMRC
GOV.UK
www.gov.uk › ... › Dealing with HMRC

Report a person or business you think is not paying enough tax or is committing another type of fraud against HM Revenue and Customs ( HMRC ).

This is from my googling: gift tax fraud. The original poster's solicitor should have advised on this. Did you pay their bill?

@llizzie are you talking about Inheritance Tax on gifts? If so, that only needs to be paid if the giver dies within 7 years of gifting the money. And the tax is paid out of the giver's estate (if the total gifted is under £325k).

My DB has worked on govt projects where security clearance is required eg Buckingham Palace renovation. Me and DH were included in clearance requirements and I just had to supply lots of info to DB for him to submit eg prior employers/DH place of birth. And we definitely didn’t pay anything. It would be very unlikely that a candidate is asked to pay for screening. It creates bias in the application.

@HollyKnight @llizzie or capital gains tax could be applicable if he’s taken any assets from the house that have increased in value. Again would be payable by the giver of gift ie Mum

I thought it was only taxable if the giver dies before 7 yrs is up?

Beaten to it!

I actually completed a UK government security form recently as a reference for someone for a high clearance role.

It was emailed to my work address and when I was on leave I got another email saying I needed to fill it in. I got no phone calls chasing it. The person I did it for paid no money for that clearance.

Your brother is full of shit but you already know that. But regarding this aspect I can 100% confirm he's talking bollocks.

Sorry but I think you’re mistaken, if a parent gives you money for a house for instance, it’a not taxable (as long as they don’t die within 7 years)

https://hodgebank.co.uk/articles/how-to-gift-money-for-a-house-deposit/#:~:text=Do%20you%20have%20to%20pay,years%20of%20giving%20the%20deposit.

folks gave him 55k for a house (under the pretence he’d pay it back)

and also

https://www.rousepartners.co.uk/gifting-tax-efficiently/

There’s 10k for a wedding and then a further 3k a year, plus they can pay for your bills (if they want) they can cover your rent or whatever.

HollyKnight · Yesterday 22:17

You can google ''gift tax''. It is about giving money. You can give any amount of money, but over £3K it is taxed by the government.

cut and pasted on Google:

People also ask
Can I gift 100k to my son in the UK?
In theory, you can gift as much money as you want to your children, but large gifts may be subject to tax (more on that later). The good news is that every UK citizen has an annual tax-free gift allowance of £3,000.

How Much Money can you Gift Tax-Free?Just exactly how much money can you gift before taxes become a problem? If you’re one of the thousands of people is asking themselves “How much can I gift tax-free?” you’re not alone. Understanding what that threshold looks like can be complex. That’s because those numbers are continually changing. So, the answer to the question “How much money can you gift in the UK in 2021?” is a bit different than the answer today. Generally, in the UK, one is allowed to give a tax-free gift of a cash value of up to £3,000. This annual exemption if not used in one year can be rolled over to the following year, but you are only allowed to take advantage of the rollover one time. For example, imagine in 2020, your father gave you a gift worth £2,000. The following year, in 2021, he gave another £2,000 to your brother. He didn’t meet his annual exemption in either year. As a result, he can roll over the extra £2,000 the following year, but he can only do that one time.

Unicornfairysoap · Yesterday 23:38 re gift tax comment.

I have copied and pasted from Gov.co.uk and other info on Google. It isn.t a guess. You can gift a house to your children and if you live past 7 years, they would not have to pay IHT, but IHT is not the same as gift tax.

There is another point too: did you know you cannot sell your house cheaply to avoid residential care home fees?

@llizzie as others have said, the tax is paid from the givers estate-this doesn't apply in these circumstances as OPs mother is still alive

OP I'm sort of with other posters here that I REALLY don't understand why you've not gone to the police (and why in a few posts you're asking us to check if your bother could be correct when you KNOW his history)

This is financial abuse of the elderly and absolutely can be prosecuted.

I recommend contacting the number on the bottom of the link here (BTW this reads almost verbatim like your DMs situation)

grandparentslegalcentre.co.uk/coercive-control-of-the-elderly/

@llizzie that is talking about inheritance tax on gifts. If you die within 7 years of giving money to someone, your estate has to pay tax on any money over the £3k-per-year allowance.

Gift Tax

im Very aware of what IHT is and you inherit your spouses allowance also

but I’m talking about gifts when alive, you can, without tax give your child money for a house, and you can pay their bills and then you can give them cash up to 6k (using previous year’s allowance) and give them money for their wedding up to 10k

even still, the crime id be reporting is against my dm, think she’s suffered enough without me reporting her for fraud,fgs.

your last point is irrelevant to this thread

Yeah, but won’t that get mum into trouble?

Mum isn't in trouble.

She can give any amount. If she dies before 7 yrs have passed, however, her estate can be taxed.

"No tax is due on any gifts you give if you live for 7 years after giving them - unless the gift is part of a trust. This is known as the 7 year rule"

https://www.gov.uk/inheritance-tax/gifts

It might be a problem in some countries where there is an actual Gift Tax - the USA, for example.

WearyAuldWumman · Today 16:43

presumably then, if you die 7 years after giving gifts each year, it can be deducted from the eventual IHT when paid ultimately? How does that work? Does the Treasury keep a book on all the gifts we make in our lifetime, then credit it against what we finally leave when dead?

Giving gifts of money each year can only be rolled over once. There is either an anomoly or the Treasury is not clear. IHT and gift tax were always separate, I thought. I must be wrong then. I discovered recently that if you do not pay the IHT within six months the treasury charges interest on it. which is why so many property managers pick up so much property at rock bottom prices. Local agents sit on the heirs until the last minute to offer on a property. That is how they make their money. I wonder if the treasury realises that they are in effect doing heirs out of their inheritance and encouraging property owners/developers to make more money?

The 7 year rule

No tax is due on any gifts you give if you live for 7 years after giving them - unless the gift is part of a trust. This is known as the 7 year rule.
If you die within 7 years of giving a gift and there’s Inheritance Tax to pay on it, the amount of tax due after your death depends on when you gave it.
Gifts given in the 3 years before your death are taxed at 40%.
Gifts given 3 to 7 years before your death are taxed on a sliding scale known as ‘taper relief’.
Taper relief only applies if the total value of gifts made in the 7 years before you die is over the £325,000 tax-free threshold.
Taper reliefYears between gift and death Rate of tax on the gift
3 to 4 years 32%
4 to 5 years 24%
5 to 6 years 16%
6 to 7 years 8%
7 or more 0%Giving gifts you still benefit fromIf you give something away but still benefit from it (a ‘gift with reservation’), it will count towards the value of your estate.

It will indeed. It would also get the son into trouble. I doubt whether the fraud squad would pillary an elderly widow.

@llizzie Seriously, you're not understanding this. The son wouldn't have to pay any tax. The money was given to him as a gift. It is the GIVER who is responsible for paying any tax due. Any tax due isn't due until after death, and only if the death occurs within 7 years of gifting the money.

None of this is relevant to the OP because her mother is very much alive and her brother isn't liable for paying tax on the money his mother gives him.

presumably then, if you die 7 years after giving gifts each year, it can be deducted from the eventual IHT when paid ultimately? How does that work? Does the Treasury keep a book on all the gifts we make in our lifetime, then credit it against what we finally leave when dead?

Nothing is "credited". The monetary gift (if over the £3k threshold) is taxed. This tax is a debt. It is added to the Inheritance Tax bill. This bill is paid out of the estate. People are responsible for keeping a record of the money gifts they give.

No it won’t get him into trouble so tax evasion or tax fraud or anything

and the tax man will come knocking elderly widow or not