Am I allowed to have this money in my bank account? Advice please

[athomewithcats2]

I help an elderly relative with some money matters, like ordering online shopping, stuff from Amazon etc.

She transferred £5500 in advance for me fo buy these things for her. I didn’t want this money in my current account as it needs to be separate to keep track, so I transferred it into an online savings account and transferred the funds into to my current account when buying something for her.

I now have Power of Attorney (along with 2 other people) but I don’t have access to her bank accounts yet. So the money to pay for things for her is still the savings account in my name.

I am worried about doing something wrong without meaning to. Is it ok for this money to be in my bank account, if I am using it for this purpose?

Also if there is interest, how does that work? Would the interest be mine (as it’s in my bank account and coming out of my personal savings allowance)?

I can't see a problem. Keep records of spending, tell the other POAs what you are doing. The interest should just compound in the account. It belongs to your relative.

This is the issue - the money is in my acc so any interest is coming out of MY personal allowance and I risk paying tax on it if total interest in all my accounts is over £1k a year (as I have my own savings).

If the interest belongs to my relative it should count towards her personal allowance / be taxed accordingly.

I want to know how it works regarding this.

I don’t think this is a great idea for lots of reasons really.

A better idea might be to open a joint account with your relative (think Barclays and Santander might have options for this) and perhaps get an associated debit card to use. Keeps it completely separate.

If you want to be totally transparent, it’s probably better to set up food/grocery and online accounts with her payment card connected to them. If you create an email
address that all three attorneys have access to, all the receipts will go to them and there’s a good paper trail.

You could keep the money in your savings account if you want to but just make sure you keep squeaky clean records of all expenditure. You’re basically doing everything you can to protect yourself.

Surely you’d just keep it in a non-interest bearing account for the time being? And sort out access to her accounts quickly.

I’ve kept it in the lowest possible but all accounts with my bank are either current acc or savings, there doesn’t seem to be the option to open a no interest account without it being a current account.

Keep a record of everything in and out. Any interest would be theirs, just leave it in the account as part of the balance.

But if it’s theirs it needs to count towards their personal allowance doesn’t it? Not mine? How does that work?

I keep records of everything but I need the answer on how this actually works. I want to set up an acc in her name properly now I have POA but it’s been set up like this temporarily until it was finalised.

It would me much better to sort out a separate account for her money. If you were to die, the money would form part of your estate which would cause a headache for your beneficiaries and the other attorneys. It might also be taxed unnecessarily depending on your estate. Also, if either of the other attorneys take against you for any reason, they might report you for stealing the money. Whilst you'd be unlikely to be charged, it would be very unpleasant to be investigated.

I just went to the bank with POA papers and they sent me a debit card for my relatives account? Then no chance of getting mixed up with your own finances and easier to keep records.

If the account is in your name the interest counts towards your allowance and will be reported to HMRC as such - you can’t reallocate to the relative as it is not held in their name. You either need to put into a separate current account which pays no interest or better still arrange to have a bank card on her account to use. Speak to her bank as people with a POA can get a bank card. Also keep records of every expenditure and every receipt of funds.

You may have POA but has she been deemed not to have capacity over her finances?

Doesn't matter if the correct box was ticked on the form. My nieces are my attorneys and can activate finance at any time, so they would be able to pay my bills if I was in hospital for a long period and unable to do so myself. The health one is different and can only be activated if the person has lost capacity.

Yes , this. She set up the POA herself with a solicitor so others can help with finances as she is housebound due to health, can’t access online banking etc.

Thank you. Yes, planning to sort the bank acc but it took a few months for the POA to be sorted with a solicitor, so this has been a temporary solution.

I mean, surely this is a non issue on the interest. Most rubbish low paying accounts are around 0.75% and even if you left the whole amount in (which doesn't sound like you'll do) it would at best make around £40 for the year? Surely that's not a massive issue if you're talking about going over personal allowance for savings.

Unless I'm being really daft (does happen!) and I apologise for getting the numbers wrong.

You’re correct, but I really do worry about doing things wrong (particularly around money) so I get a lot of anxiety about this sort of thing.

Your problem will be that it appears to be a gift. She can gift 3k per year and use last year's allowance.

If you are the only person she has done this for then no issue as she's within her allowance.

But it would be better to just make these payments directly (or for her to pay for them in small amounts) as doing it as one payment certainly looks like a gift.

This isnt the right way to approach it. Its a pain until the POA is in plave and can be activated because she wants help from you (which is how a Finance POA works if attorneys are allowed by it to act independently).

With my late fathers POA I was given access to his accounts through my own banking login (I used the same bank, luckily). I also kept accounts on a spreadsheet so I could give more detail for each transaction. I conpleted the accounts weekly and balanced to the banking balances.

As soon as my father passed, I stopped using the account as my POA extinguished (I think). Ive since used my own money to pay bills, and put any DD through my own accounts, except for his funeral which I will take into the bank to pay out of his frozen account. I hope when probate is granted I will get it all back!

interest for a whole year would be about £200 if you’ve put it in a decent account (depending on exactly what’s in there). Tax will be 20% or 40% of that and hmrc can collect this through your PAYE. I’d just treat the interest as hers net of the tax. That way no one is out of pocket.

it’s not how you should do it strictly but the admin for treating this as a trust would be completely disproportionate for the sake of £40.

Once you’ve got access to her account id suggest you transfer it back and keep things simple.

If you say it was only put in your account on a temporary basis until you got POA why don’t you just now open the account in her name and move the money into it? Then you won’t make any more interest on it in your name

What is she buying on Amazon for a total of over £5000?

It’s not just that, it’s regular grocery shopping and anything else that is ordered online. She can’t get out at all so everything has to be ordered and delivered, food, clothes, toiletries, things for the household etc etc.

It would probably have been better to have been given a much smaller sum.

My late fathers one person shop often only just made the delivery threshold where they dont charge a penalty. It would take me quite some time to burn through 1k, let alone 5k.

His main expenses were on direct debit - utilities and council tax.

His costs only rose when carers required payment - in his case in a care home - but had he instead of had personal care at home, those costs werent insignificant and would need a higher level.