Hiding from taxman

[tricksymother]

I suspect DM (80) is hiding money from the tax man (and us). Won't know for sure until we eventually deal with her estate.

When you wind up someone's estate, what would happen if an account was found that hadn't been previously declared? Obviously it would be subject to inheritance tax, but what about the previous years when tax wasn't paid on it?

She is paying tax, but possibly not quite enough- possibly an innocent mistake... ahem.

Can anyone tell me what would happen?

The mere existence of a bank account is not in itself evidence of tax fraud. Why do you think it is?

DH helps her gather her tax information. He also helped her organise all DF's affairs after his death

He's asked her if there are any other accounts, she says no. He thinks there are though. So she isn't declaring a savings account, the income from which should be taken into account. Presumably it's peanuts, at today's rates, so shouldn't be a big deal. She doesn't want any of her children to know her financial status. That's not a problem in itself, but she does struggle to stay organised. (Also she is having some work done to the house which will pretty much wipe her out andnit would be handy to know if she has a back up pot. Which is a separate but related issue really:.

Actually the problem may be more FH's preference for everything to be tidy and above board, rather than any serious tax avoidance going on.

Is it just bank interest that you're concerned about? The rules are (unnecessarily) complicated, but there is a personal savings allowance that means she can receive bank interest up to £1k tax free if she's a basic rate taxpayer on her pension income.

I think so. It's ok though, she's accepting that she has it now- she's buying a house and will use it to get the deposit together.

It was more a worry about sorting out her estate, and possible repercussions from the taxman if she'd been wildly dishonest for years before 🙈