Can a father give son £26,000 - tax implications ?

[gingeroots]

Grandmother recently died , £80,000 to son ,can so give £26,000 to his son ?

This would be to remedy will " misreading" by son/executor as the £26,000 should have gone direct to son .

But would it be viewed as possissible money laundering /tax evasion ???

The executors are brother and sister .Brother left all admin/probate work to the sister .

There are 4 grandchildren ,two each .

The brother has been given 50% of the estate .

An initial attempt is being made to resolve this by contact with brother and sister ,the executors .If this is not immediately succesful then legal advice will be sought.

If the will was clear and done through a solicitor I can't see how these people did not follow the instructions whether they were executors or not. I'd get a solicitor involved even with the cost. People can't just pocket money if they feel like it. A will if properly signed and witnessed is a legal document surely.

So - the grandmother left 80,000, which should have been divided into 6 equal parts?

But instead, it was divided into 2 parts and kept by the two offspring? (Who conveniently happen to be the executors).

So - each of the offspring SHOULD have got 1/6, but actually got 1/2?

Are these figures before or after inheritance tax? (If applicable)

But - generally speaking, if you fart, you need to pay tax on it. So, one of the offspring just writing a cheque to make up for their 'mistake' could be seen as very dodgy. There are limits on how much can be given as gifts to other people without incurring tax, except for special circumstances.

Looks like the offspring each need to keep 1/3 of their inheritance and hand on 1/3 to each of their children.

And yes, it is a criminal act for them to have kept this money and not handed it over. did they really not have any legal input at any stage? I thought that certain parts of winding up an estate needed a legal rubber stamp (such as declaring how much the estate was worth to declare probate), so they may well have broken the law in several different ways.

An hour or two with a solicitor may well cost a couple of grand, but is a very small amount compared to the totals here.

And if anyone is refusing to rectify their 'mistake' get it in an email/text. Don't just phone them. Then head off to the nearest police station. Don't even bother with a warning, this is not an innocent misunderstanding they are falling over themselves to put right.

And yes, it is a criminal act for them to have kept this money and not handed it over. did they really not have any legal input at any stage? I thought that certain parts of winding up an estate needed a legal rubber stamp (such as declaring how much the estate was worth to declare probate), so they may well have broken the law in several different ways

I'm not sure exactly what the crime would be here. There's definitely plenty of breaches of the executorshio duties and legal remedies available but I'm not sure if the criminal aspects. I'll keep thinking.

If the non-dodgy father can pass on the correct amount to his son and there's no ambiguity in the will then there aren't any tax issues. If that portion of the estate is right and it's other grandchildren who have been ripped off then it's for them to take action.

There's no rubber stamping needed. The executors will have to have declared the value but there's no one to check that everything has been distributed properly if there's no solicitor involved.

Are both children going to get the £26,000 on this side of the family? Or is it just one son who is going to get the cash?

fastday - I'm thinking that if I had 40k, but knew that only 1/3 of it was mine, and the other 2/3 belonged to other people, that keeping that 2/3 is theft. If it ain't yours, you don't get to keep it.

Well yes but this happens all the time (I know off of being the person who has to fix it) and no one ever suggests a criminal option. I haven't done any criminal law for such a long time so I can see how it could be theft, but practically that doesn't seem to be the answer. Maybe because there are civil remedies? In the same way that refusing to pay a contractual debt could be construed as theft (is certainly intention to permenantly deprive) but the police aren't bothered.

You can give away whatever you like

The Duke of Westminster gave his daughter a £5 million estate as a wedding present

it only goes near the tax man if the donor dies within the 7 years

It always amazes me what family will do to each other :-(

fastday can I ask how do you fix it ?

Sure but it's not exciting! Arsey letters threatening court action then then a Court claim. You can get the executors replaced too but no point in that if everything has already been paid out.

The main problem is that all that costs money, which is the main reason why dodgy executors get away with this. It's not something that I can see anyone being able to do without a lawyer unfortunately, even when the facts seem quite simple.

Thanks fastday ,I can imagine it's a bit of a process ....

I don't really understand these things ,would the breach of executorship be a civil thing not a criminal thing .What redress is there in court if it gets that far ?

It is a civil thing, yes. The redress is that there's an order making the executor hand over the money that they should have in the first place.

It is a massive headache, but most people see sense at the arsey letter stage luckily.

I see ,ok that's very helpful .

Just re skimming the thread :
go talk to the solicitors who drew up the will (their name will be on there somewhere)
and remind them that they are supposed to produce wills that are executed correctly

Is that the case ?

I can't see how that is possible, as surely they have no control over who or how the will is executed ?

It isn't possible, Ginger - I write hundreds of wills every year and as I'm not an executor never hear anything after the client dies.

The deed of variation suggestion is obviously a red herring now that the will has been executed, a DoV is used when all executors and beneficiaries agree to vary the terms.

As someone upthread has raised, the dad has still received too much, unless he's putting his other child's share in a trust account because he or she is under age. The sister clearly also needs to share the half which she received with her two children.

Thanks mumblechum .

And thank you for your kind help when I PM'd you !

No problem, glad it seems to be creaking towards a solution

Not especially relevant to OP but one of my daughter's will not be applying for a mortgage and her solicitor has advised her to get us to do a simple 'we are giving you such and such' witnessed document so there is no question of our asking for it back in future .She trusts us not to do so but we will do it anyway .It also establishes
without doubt the date the money was handed over.

I am astonished they got probate without proof they'd carried out the wills requirements .I sorted out my mothers afffairs (no will) but am pretty sure I had to take bank records to the private office to prove I'd given my brother half the money.

Sorry 'probate' office

The Grant of probate is issued before the estate is administered, so the Probate Registry has no way of knowing.

The declaration of gift you've been asked to sign is standard as mortgage companies are so worried about gifted deposits that are really loans from parents.

I've obviously mis remembered fastday
Shows you should choose your executors carefully.
But as I said there is no mortgage involved in my DD2 case
The deed of gift is not a legal requirement, just a sensible precaution to safeguard her

Ah I assumed it was the usual now/not typo! You didn't need a deed of gift then, but as long as you weren't charged much for it no harm done. Good you can help your DD.