Nephew running with the money
johnclayton_____
mother in Scotland arranged with his two sisters and the family solicitor
(in Scotland) to pay £100,000 to his nephew to 'reduce' the inheritence tax
they would have to pay because of the value of the mother's house.
It was made clear to the Nephew by the mother's three children that this
money was *not permanently* given to him, and that he was expected to pay it
back at a later date.
This understanding that he would pay it back, was also made clear to the
solicitor in Scotland who 'arranged' the transaction. The solicitor also
knew that this payment to the nephew was to *evade* (avoid) paying the full
inheritance tax.
Surprise, surprise... the Nephew does not want to pay the money back. He is
now turning nasty and unco-operative. What advice might it possible
to give in this situation to try to recover some of this *stolen* money?
Thanks.
elise d faber
immediately contact the scotish and english inland revenue and explain
the situation. then they [it is to be hoped] will jail your crooked
friends and make the nephew pay taxes on his illegal income.
elise
Peter Crosland
It all sounds very doubtful. How exactly would "giving" this money reduce
IHT? In any case all the parties including the solicitor have apparently
conspired to defraud HMR&C. A not very good troll I think.
Peter Crosland
Anthony Matonak
> A friend who is normally resident in the U.K., on the recent death of his
> mother in Scotland arranged with his two sisters and the family solicitor
> (in Scotland) to pay £100,000 to his nephew to 'reduce' the inheritence tax
> they would have to pay because of the value of the mother's house.
> Surprise, surprise... the Nephew does not want to pay the money back. He is
> now turning nasty and unco-operative. What advice might it possible
> to give in this situation to try to recover some of this *stolen* money?
> Thanks.
Well, as trolls go it's better than how to recycle cat litter or
which side of the toilet paper you use first.
There isn't anything you can legally do about it but what does
that matter? The whole thing was illegal so staying within the
law isn't all that important.
The question becomes "What illegal things can I do to get this
money back?" You could try traditional brute force. For example,
threaten his life, break his legs, cut something off and so forth.
This kind of work isn't for everyone so if you've got problems
with blood or haven't had much experience then it's worth it to
hire professionals who do this all the time.
Anthony
tim (not at home)
"johnclayton_____" <voi...@voidacious.net> wrote in message
news:aKvAj.6568$kN5....@newsfe1-gui.ntli.net...
Firstly, I agree with Peter about not seeing how it would reduce an IHT
bill.
But if this situation did occur:
you have zero chance of getting the money back, because the clauses of a
contract, the purpose of which is to commit a crime, cannot be enforced.
So, the requirement to give the money back is effectively void.
tim
Logan Shaw
To me, the most interesting question to ask about this situation is
where the nephew got the idea that it was OK to refuse to give someone
money that you currently possess but rightfully owe to them. And the
reason that's an interesting question is that the answer is his parents,
and/or aunts/uncles. In fact, it seems like an entire group of
authority figures got together and made a concerted, organized effort
to demonstrate to him that it's acceptable to try to hold on to
someone else's money if you can get away with it.
So it's not surprising at all that he, being young and having nobody
worthy to rely on for moral direction, decided to keep the money.
What is surprising is that the adults didn't seem to expect him to
do it. I guess in this situation he outsmarted them.
Then the next question is what the nephew should do about it.
Financially, he's up by £100,000, but money isn't everything, and on
a personal level, he's setting a precedent for his own behavior by
participating in this. That's actually kind of damaging to him,
and it might be good for him to find a way to make this right, in
order to preserve (or improve) his character. Just keeping the
money means that he's decided for himself that it is, in fact, OK
to keep things that are not yours. It's one thing for another
person to steer you in a certain direction, but it's a different
thing to choose that path for yourself, so if I were him, I would
think that'd be something to avoid. So, IMHO, he should get rid
of the money somehow.
- Logan
TJ
> johnclayton_____ wrote:
>> A friend who is normally resident in the U.K., on the recent death
>> of his mother in Scotland arranged with his two sisters and the
>> family solicitor (in Scotland) to pay £100,000 to his nephew to
>> 'reduce' the inheritence tax they would have to pay because of the
>> value of the mother's house. It was made clear to the Nephew by the
>> mother's three children that
>> this money was *not permanently* given to him, and that he was
>> expected to pay it back at a later date.
>>
>> This understanding that he would pay it back, was also made clear to
>> the solicitor in Scotland who 'arranged' the transaction. The solicitor
>> also knew that this payment to the nephew was to *evade*
>> (avoid) paying the full inheritance tax.
>>
>> Surprise, surprise... the Nephew does not want to pay the money
>> back. He is now turning nasty and unco-operative. What advice
>> might it possible to give in this situation to try to recover some of
>> this *stolen*
>> money?
>
> To me, the most interesting question to ask about this situation is
> where the nephew got the idea that it was OK to refuse to give someone
> money that you currently possess but rightfully owe to them.
Don't know how it works in the UK, but if the same thing happened in the US
I doubt he would "rightfully" owe them a dime. (Morally would be a
different issue) Most likely he got the idea from the family. They
knowingly involved him in a scheme to fuck the government out of inheritance
tax, so he took a page out of their book, and in the end, decided to fuck
the relatives as well as the government. IANAL, but I think this would come
under the "clean hands" rule of law which dictates that you can't sue
anybody to recover ill-gotten gains.
They certainly can't go after the nephew for the money without exposing
their own guilt in trying to avoid taxes.
I would think if the relatives have cause of action against ANYONE, it would
be the "Solicitor" who assisted in creating the scam. But again, IANAL (I
am not a lawyer) and even THAT would cause them to expose themselves as
crooks.
Bottom line IMO,
Nephew: + 100K
Relatives: 0
Either that, or EVERYBODY goes to jail. :-)
[...]
mentalguy2004
"TJ" <T...@no.not> wrote in message
news:8L-dnRh6Q-NIVU_a...@comcast.com...
Hindsight suggests that it would have been cheaper to pay the tax. That
would definitely be better than watching the nephew flaunting his 100 grand.
Best 5 minutes work he ever did, agreeing to that deal!
Rod Speed
It aint stolen money, they were stupid enough to give it to him.
Rod Speed
It isnt a jailable offense there.
TJ
OK. Then EVERYBODY pays a fine? :-)
TJ
It wasn't theirs to "give". At least not until AFTER the taxes were paid on
it.
Nebulous
"johnclayton_____" <voi...@voidacious.net> wrote in message
news:aKvAj.6568$kN5....@newsfe1-gui.ntli.net...
Bwahaaahaaa
They arrange an illegal transaction then get upset when he doesn't pay it
back!
Neb
Geoff Pearson
"TJ" <T...@no.not> wrote in message
I can't believe we are discussing this hokum. It is a troll, big time.
TJ
Maybe it is, maybe it's not. All I can say is that in this day and age,
it's certainly within the realm of possibility that something like the above
might occur.
_
>
> To me, the most interesting question to ask about this situation is
> where the nephew got the idea that it was OK to refuse to give someone
> money that you currently possess but rightfully owe to them.
If they have a "right" to the money, they would/should have expressed it in
the contract with which they "lent" him the money. As is appears from your
original post, they gifted him the money, and now claim that it was a loan.
He claims the money was a gift. The right to the money will be determined
by a court (should it get that far) and if he has stronger evidence than
the other side, he will prevail. I would suggest that a written contract
carries more weight than a verbal one, especially if
a) the written contract is of a standard form; and
b) the verbal one is unwitnessed by any parties disinterested.
catchme
However, there are similiar schemes employed both legally ("offshore
investing"), and illegally ("money laundering")- the principal
difference is that the money in the first case is earned legally and the
principal is seeking a tax shelter, and in the second, the money was
earned from the sale of illegal goods and needs be invested in
'legitimate' business to be redirected to the principal at another date.
So, the nephew is a third party (read "offshore bank"), who was supposed
to return the money to the rightful owners at a certain date.
Problem is, this was all arranged in good faith- no documents drawn.
If it can be proven that he was given the money to be returned at a
later date, then you have no problem- unfortunately, the only proof
appears to be deceased.
What is to be determined is if there are any other witnesses who might
testify.
Again, I dont know about tax laws elsewhere, but in Canada we have the
right to arrange our affairs in such a way that we pay the least amount
of tax possible, notwithstanding current legislation.
This means that although the deceased might have arguably have committed
taxation fraud (which cannot be proven given that the deceased shall
forever be so, and one cannot convict someone of a crime for which they
cannot in any way be given the opportunity for a defence, for a decedent
cannot arrange a defence), to the inheritors the same may not be said-
in fact, from their standpoint i might suggest that the nephew was
merely lent a sum which he was to return at some later date, and the
heirs, who want the full estate, ask for the sum to be returned.
Rod Speed
Nope, it would be very difficult to prove beyound reasonable doubt
that the nephew had knowingly taken part in any crime. So he'd
almost certainly get off scott free, and would get to keep the money.
Rod Speed
Yes it was.
> At least not until AFTER the taxes were paid on it.
Wrong again if the taxes werent due if he received it.
TJ
> On Sat, 08 Mar 2008 10:41:18 -0600, Logan Shaw wrote:
>
>>
>> To me, the most interesting question to ask about this situation is
>> where the nephew got the idea that it was OK to refuse to give
>> someone money that you currently possess but rightfully owe to them.
>
> If they have a "right" to the money, they would/should have expressed
> it in the contract with which they "lent" him the money. As is
> appears from your original post, they gifted him the money,
In an attempt to avoid paying taxes on it.
A VERY important part you left/snipped out, there.
Allow me to put it back:
"this payment to the nephew was to evade
(avoid) paying the full inheritance tax."
[...]
NOBODY other the government has a "right" to the 100K in question
unless/until the tax is paid on it. And maybe not even THEN, since there
was a willful (by all parties concerned) attempt to defraud whatever the
UK's version of the IRS is.
TJ
I would think the inheritance was subject to taxation the *minute* it was
received by the aunts and uncle. IOW, BEFORE they "gifted it" to the
nephew. But once again, IANAL/solicitor.
Logan Shaw
I thought it was obvious in the first place what was going on
here. My assumption since the beginning of this thread has been
that there is some kind of threshold below which no inheritance
tax is due. The relatives crossed this threshold, and their idea
was for the mother to will the excess directly to the nephew, so
that they *never* had their hands on the money.
I just looked it up at
http://www.hmrc.gov.uk/cto/customerguide/page15.htm
and it says this:
The Inheritance Tax nil rate band is the amount of
the estate on which there is no Inheritance Tax to
pay. If the estate, including any assets held in
trust and gifts made within seven years of death,
is less than the nil rate band, no Inheritance
Tax will be due on it.
However, that actually sounds like it applies to the entire
estate (not the amount inherited by a single person), which
thus makes it sound like such a plan to shuffle around the
money wouldn't work. On the other hand, it looks like (and
of course IANAL/solicitor either) you can give money tax-free
before death, as long as it's 7 years before. But that seems
a little far-fetched to apply in this situation.
So I'm starting to agree with the people who've said such a
scheme, if anything, wouldn't work anyway, making this (even)
more likely to be a troll.
But of course, it's sort of a fun troll. Everybody likes to
see greedy, dishonest people hatch a scheme that later blows
up in their face. In fact, it's almost got sort of an urban
legendy morality tale aspect to it.
- Logan
Rod Speed
> _ wrote:
>> Logan Shaw wrote
>>> To me, the most interesting question to ask about this situation is
>>> where the nephew got the idea that it was OK to refuse to give
>>> someone money that you currently possess but rightfully owe to them.
>> If they have a "right" to the money, they would/should have expressed
>> it in the contract with which they "lent" him the money. As is
>> appears from your original post, they gifted him the money,
> In an attempt to avoid paying taxes on it.
> A VERY important part you left/snipped out, there.
> Allow me to put it back:
> "this payment to the nephew was to evade
> (avoid) paying the full inheritance tax."
Not necessarily illegal to do that, if the tax law doesnt require
tax to be paid on what the nephew got. If the nephew chooses
not to return it, that isnt necessarily illegal either.
> [...]
> NOBODY other the government has a "right" to the 100K in question unless/until the tax is paid on it.
You dont know that, it depends on the detail of that inheritance tax.
If for example no tax is due if it ended up with the nephew, there was no tax to pay.
> And maybe not even THEN, since there was a willful (by all parties concerned) attempt to defraud> whatever the UK's
> version of the IRS is.
Its isnt an attempt to defraud if you choose to do it the way that tax isnt due.
Rod Speed
>> Yes it was.
Its normally paid by the estate before the remainder is distributed.
> IOW, BEFORE they "gifted it" to the nephew.
You dont know that they did that. Its more likely it was 'gifted' to the nephew by whoever died.
> But once again, IANAL/solicitor.
Thats always been obvious.
Rod Speed
Yes, thats how inheritance tax works.
> which thus makes it sound like such a plan to shuffle around the money wouldn't work.
It would work if the excess that takes it over the nil rate
band is given to the nephew before the individual dies,
and so doesnt appear to qualify for any inheritance tax.
Its less clear if that giving was done before 7 years before death,
or whether they didnt bother to declare that so it wouldnt be counted.
> On the other hand, it looks like (and of course IANAL/solicitor either) you can give money tax-free before death, as
> long as it's 7 years before.
Yes, thats the way it works and what that bit you quoted says.
> But that seems a little far-fetched to apply in this situation.
Nope, its quite commonly done in a situation where inheritance tax would otherwise apply.
And it isnt even illegal to arrange to have it given back later either.
> So I'm starting to agree with the people who've said such a scheme, if anything, wouldn't work anyway,
Corse it does as long as the gifting is done 7 years before the death.
Corse it isnt always possible to get that right, they can die too early etc.
> making this (even) more likely to be a troll.
Its the sort of thing that does happen in jurisdictions that have that sort of inheritance tax.
You can see examples of the shit fight that eventuates in the courts in those jurisdictions.
> But of course, it's sort of a fun troll. Everybody likes to see greedy, dishonest people hatch a scheme that later
> blows up in their face.
Or just those that attempt to legally minimise the taxes that must be paid,
and it isnt always possible to organise it properly, particularly when it isnt
possible to be sure when you will die except when its by suicide etc.
> In fact, it's almost got sort of an urban legendy morality tale aspect to it.
It aint an urban legend, you can see the ones that end up in court when it all goes pear shaped.
Ronald Raygun
> Logan Shaw <lshaw-...@austin.rr.com> wrote:
>> TJ wrote:
>>
>> However, that actually sounds like it applies to the entire
>> estate (not the amount inherited by a single person),
>
> Yes, thats how inheritance tax works.
>
>> which thus makes it sound like such a plan to shuffle around the money
>> wouldn't work.
>
> It would work if the excess that takes it over the nil rate
> band is given to the nephew before the individual dies,
> and so doesnt appear to qualify for any inheritance tax.
No it would not work, unless the giving was done more than 7 years
prior to death.
> Its less clear if that giving was done before 7 years before death,
> or whether they didnt bother to declare that so it wouldnt be counted.
Read the OP again. It is quite explicit in stating that the payment
was made *on* (i.e. after) the mother's death.
>> On the other hand, it looks like (and of course IANAL/solicitor either)
>> you can give money tax-free before death, as long as it's 7 years before.
>
> Yes, thats the way it works and what that bit you quoted says.
>
>> But that seems a little far-fetched to apply in this situation.
>
> Nope, its quite commonly done in a situation where inheritance tax would
> otherwise apply.
>
> And it isnt even illegal to arrange to have it given back later either.
Yes it is, it would fall under the "gifts with reservation" rules, which
basically provide that such "temporary" gifts with strings attached simply
do not qualify for the tax exemption accorded to *real* gifts.
>> So I'm starting to agree with the people who've said such a scheme, if
>> anything, wouldn't work anyway,
>
> Corse it does as long as the gifting is done 7 years before the death.
But it wasn't.
>> making this (even) more likely to be a troll.
>
> Its the sort of thing that does happen in jurisdictions that have that
> sort of inheritance tax.
>
> You can see examples of the shit fight that eventuates in the courts in
> those jurisdictions.
Where there has been deliberate collusion to defraud the taxman, anyone
trying to use the courts in such an internecine wrangle would be an idiot,
unless they were very confident that they could refute any allegations of
being part of the collusion.
It should also be said that it's preposterous to suggest that the "family
solicitor" would willingly facilitate such an act of evasion, unless of
course there was something in it for him, and he was confident of being
able to conceal the crime. No solicitor would be daft enough to risk
his career unless the payoff was sufficient to set him up for life.
A measly few hundred k would hardly qualify.
tim (not at home)
"Rod Speed" <rod.sp...@gmail.com> wrote in message
news:63g9hbF...@mid.individual.net...
> TJ <T...@no.not> wrote
>> _ wrote:
>>> Logan Shaw wrote
>
>>>> To me, the most interesting question to ask about this situation is
>>>> where the nephew got the idea that it was OK to refuse to give
>>>> someone money that you currently possess but rightfully owe to them.
>
>>> If they have a "right" to the money, they would/should have expressed
>>> it in the contract with which they "lent" him the money. As is
>>> appears from your original post, they gifted him the money,
>
>> In an attempt to avoid paying taxes on it.
>
>> A VERY important part you left/snipped out, there.
>
>> Allow me to put it back:
>
>> "this payment to the nephew was to evade
>> (avoid) paying the full inheritance tax."
>
> Not necessarily illegal to do that, if the tax law doesnt require
> tax to be paid on what the nephew got.
It does though[1]. Unless I misunderstood, the gift was made after death
and therefore forms part of the estate on which tax should be paid.
[1] for the pedant the tax is paid, by the estate, before the gift is made.
So technically the gift isn't taxed, but the existance of the funds sdid
create a liability.
tim
tim (not at home)
>
>>
> It would work if the excess that takes it over the nil rate
> band is given to the nephew before the individual dies,
> and so doesnt appear to qualify for any inheritance tax.
>
> Its less clear if that giving was done before 7 years before death,
> or whether they didnt bother to declare that so it wouldnt be counted.
>
It seems somewhat unlikely that someone would *know* 7 years before a
person's death, that giving away an amount of money would save on IHT.
tim
Chuck Ford
As you can see I'm a mean spirited conservative....C
<html> <body bgcolor="white" text="black"><body></html>
Rod Speed
> Rod Speed <rod.sp...@gmail.com> wrote
>> TJ <T...@no.not> wrote
>>> _ wrote:
>>>> Logan Shaw wrote
>>>>> To me, the most interesting question to ask about this situation is where the nephew got the idea that it was OK
>>>>> to refuse to give
>>>>> someone money that you currently possess but rightfully owe to them.
>>>> If they have a "right" to the money, they would/should have
>>>> expressed it in the contract with which they "lent" him the money.
>>>> As is appears from your original post, they gifted him the money,
>>> In an attempt to avoid paying taxes on it.
>>> A VERY important part you left/snipped out, there.
>>> Allow me to put it back:
>>> "this payment to the nephew was to evade
>>> (avoid) paying the full inheritance tax."
>> Not necessarily illegal to do that, if the tax law doesnt require tax to be paid on what the nephew got.
> It does though[1].
We'll see...
> Unless I misunderstood, the gift was made after death
That wouldnt have avoided inheritance tax.
> and therefore forms part of the estate on which tax should be paid.
You dont know that either.
Its quite possible that the original post mangled the story on when it was gifted etc.
> [1] for the pedant the tax is paid, by the estate, before the gift is made.
Not just for the pendant, thats always true.
> So technically the gift isn't taxed, but the existance of the funds sdid create a liability.
You dont know that either.
tim (not at home)
> tim (not at home) <tims_n...@yahoo.co.uk> wrote
>> Rod Speed <rod.sp...@gmail.com> wrote
>>> TJ <T...@no.not> wrote
>>>> _ wrote:
>>>>> Logan Shaw wrote
>
>>>>>> To me, the most interesting question to ask about this situation is
>>>>>> where the nephew got the idea that it was OK to refuse to give
>>>>>> someone money that you currently possess but rightfully owe to them.
>
>>>>> If they have a "right" to the money, they would/should have
>>>>> expressed it in the contract with which they "lent" him the money.
>>>>> As is appears from your original post, they gifted him the money,
>
>>>> In an attempt to avoid paying taxes on it.
>
>>>> A VERY important part you left/snipped out, there.
>
>>>> Allow me to put it back:
>
>>>> "this payment to the nephew was to evade
>>>> (avoid) paying the full inheritance tax."
>
>>> Not necessarily illegal to do that, if the tax law doesnt require tax to
>>> be paid on what the nephew got.
>
>> It does though[1].
>
> We'll see...
>
>> Unless I misunderstood, the gift was made after death
>
> That wouldnt have avoided inheritance tax.
I know, but that is the point.
tim
Rod Speed
>>> However, that actually sounds like it applies to the entire
>>> estate (not the amount inherited by a single person),
>> Yes, thats how inheritance tax works.
>>> which thus makes it sound like such a plan to shuffle around the money wouldn't work.
>> It would work if the excess that takes it over the nil rate
>> band is given to the nephew before the individual dies,
>> and so doesnt appear to qualify for any inheritance tax.
> No it would not work, unless the giving was done more than 7 years prior to death.
What I said in the next para.
>> Its less clear if that giving was done before 7 years before death,
>> or whether they didnt bother to declare that so it wouldnt be counted.
> Read the OP again.
No thanks. You dont know that the original post got that detail right.
If it happened exactly as the original post stated, it wouldnt have reduced the inheritance tax due.
> It is quite explicit in stating that the payment
> was made *on* (i.e. after) the mother's death.
See above.
I find it hard to believe that any solicitor got involved with a deliberate
defauding of the tax system, by say not mentioning the liquid assets
'given' to the nephew to reduce the value of the estate to a level at
which no inheritance tax was due, and why it would have been 'given'
to a nephew who wasnt due to inherit anything even if some solicitor
was actually stupid enough to get involved in defrauding the tax system.
Guess its possible that someone decided that the tax authoritys might
not notice it if the nephew got it, but its all looking pretty implausible...
>>> On the other hand, it looks like (and of course IANAL/solicitor either)
>>> you can give money tax-free before death, as long as it's 7 years before.
>> Yes, thats the way it works and what that bit you quoted says.
>>> But that seems a little far-fetched to apply in this situation.
>> Nope, its quite commonly done in a situation where inheritance tax would otherwise apply.
>> And it isnt even illegal to arrange to have it given back later either.
> Yes it is, it would fall under the "gifts with reservation" rules, which
> basically provide that such "temporary" gifts with strings attached
> simply do not qualify for the tax exemption accorded to *real* gifts.
Doesnt make it illegal.
>>> So I'm starting to agree with the people who've said
>>> such a scheme, if anything, wouldn't work anyway,
>> Corse it does as long as the gifting is done 7 years before the death.
> But it wasn't.
You dont know that.
>>> making this (even) more likely to be a troll.
>> Its the sort of thing that does happen in jurisdictions that have that sort of inheritance tax.
>> You can see examples of the shit fight that eventuates in the courts in those jurisdictions.
> Where there has been deliberate collusion to defraud the taxman,
> anyone trying to use the courts in such an internecine wrangle
> would be an idiot, unless they were very confident that they
> could refute any allegations of being part of the collusion.
But there wouldnt be any illegality involved if the
OP mangled the story on when it was 'given'
> It should also be said that it's preposterous to suggest that the
> "family solicitor" would willingly facilitate such an act of evasion,
> unless of course there was something in it for him, and he was
> confident of being able to conceal the crime. No solicitor would be
> daft enough to risk his career
He wouldnt necessarily lose his career over something like that.
> unless the payoff was sufficient to set him up for life.
> A measly few hundred k would hardly qualify.
I personally know one solicitor who did just that. He eventually got caught.
Rod Speed
>> It would work if the excess that takes it over the nil rate
>> band is given to the nephew before the individual dies,
>> and so doesnt appear to qualify for any inheritance tax.
>> Its less clear if that giving was done before 7 years before death,
>> or whether they didnt bother to declare that so it wouldnt be counted.
> It seems somewhat unlikely that someone would *know* 7 years before a
> person's death, that giving away an amount of money would save on IHT.
Plenty of tax planners do just that sort of thing.
Certainly there is some risk of premature death that means the scheme fails,
but that sort of thing is done in jurisdictions with inheritance tax done that way.
Basically because a substantial amount of tax is saved when it works.
Rod Speed
>> We'll see...
Nope. The problem is that the OP isnt likely to be strictly accurate and so the
question arises whether it mangled the story on the gift date, or makes the
unlikely claim that a solicitor got involved in tax fraud, if it isnt just a troll.
Ronald Raygun
> Ronald Raygun <no....@localhost.localdomain> wrote
>> Rod Speed wrote
>>>
>>> It would work if the excess that takes it over the nil rate
>>> band is given to the nephew before the individual dies,
>>> and so doesnt appear to qualify for any inheritance tax.
>
>> No it would not work, unless the giving was done more than 7 years prior
>> to death.
>
> What I said in the next para.
>
>>> Its less clear if that giving was done before 7 years before death,
>>> or whether they didnt bother to declare that so it wouldnt be counted.
>
>> Read the OP again.
>
> No thanks. You dont know that the original post got that detail right.
>
> If it happened exactly as the original post stated, it wouldnt have
> reduced the inheritance tax due.
Well, we're agreed, then.
>> It is quite explicit in stating that the payment
>> was made *on* (i.e. after) the mother's death.
>
> See above.
>
> I find it hard to believe that any solicitor got involved with a
> deliberate defauding of the tax system,
So do I.
> Guess its possible that someone decided that the tax authoritys might
> not notice it if the nephew got it, but its all looking pretty
> implausible...
Indeed. It's a routine requirement of probate court to require the
executor(s) to provide certificates issued by the banks of balances
*at date of death*, and therefore any funds sitting in the deceased
accounts then, but disposed of later, could not escape the court's
attention.
>>> And it isnt even illegal to arrange to have it given back later either.
>
>> Yes it is, it would fall under the "gifts with reservation" rules, which
>> basically provide that such "temporary" gifts with strings attached
>> simply do not qualify for the tax exemption accorded to *real* gifts.
>
> Doesnt make it illegal.
It isn't illegal for the deceased to make loans. It may well not even
be illegal for the deceased executors to make loans out of the deceased's
estate before probate has been granted (but certainly highly dubious).
But it certainly would be illegal to mis-state the value of the deceased's
estate by excluding the value of any such loans.
>>>> So I'm starting to agree with the people who've said
>>>> such a scheme, if anything, wouldn't work anyway,
>
>>> Corse it does as long as the gifting is done 7 years before the death.
>
>> But it wasn't.
>
> You dont know that.
We can only go by what the OP actually stated.
>> Where there has been deliberate collusion to defraud the taxman,
>> anyone trying to use the courts in such an internecine wrangle
>> would be an idiot, unless they were very confident that they
>> could refute any allegations of being part of the collusion.
>
> But there wouldnt be any illegality involved if the
> OP mangled the story on when it was 'given'
Er, you don't know that. :-)
>> It should also be said that it's preposterous to suggest that the
>> "family solicitor" would willingly facilitate such an act of evasion,
>> unless of course there was something in it for him, and he was
>> confident of being able to conceal the crime. No solicitor would be
>> daft enough to risk his career
>
> He wouldnt necessarily lose his career over something like that.
Yes he would. A solicitor found guilty of participation in fraud
would forever lose the right to work as a solicitor.
>> unless the payoff was sufficient to set him up for life.
>> A measly few hundred k would hardly qualify.
>
> I personally know one solicitor who did just that. He eventually got
> caught.
Well, as it happens, I too personally know a solicitor who "borrowed"
funds from a dead client and was caught. He was struck off for
professional misconduct, and spent time in prison. But at least he
didn't do it at someone else's behest.
I suppose a solicitor who was known to be in financial difficulties
could be exploited by crooked clients, but it would, I think, be rare
to find such a solicitor, since, despite exceptions, they are generally
pretty well paid.
Mikey
> A friend who is normally resident in the U.K., on the recent death of his
> mother in Scotland arranged with his two sisters and the family solicitor
> (in Scotland) to pay £100,000 to his nephew to 'reduce' the inheritence tax
> they would have to pay because of the value of the mother's house.
>
> It was made clear to the Nephew by the mother's three children that this
> money was *not permanently* given to him, and that he was expected to pay it
> back at a later date.
>
> This understanding that he would pay it back, was also made clear to the
> solicitor in Scotland who 'arranged' the transaction. The solicitor also
> inheritance tax.
>
> now turning nasty and unco-operative. What advice might it possible
> to give in this situation to try to recover some of this *stolen* money?
>
>
>
>
>
>
Fair play tae the lad, it was their own bloody fault, if i was the
nephew viva las vegas yeeeeehaaaawwww
Charles Ellson
From the details given, it sounds very much like the nephew knows what
he has done. Whether or not he knows it might be illegal is a
different matter as ignorance of the law is in general not accepted as
a defence. The potential loser is the Crown and their agents, HMRC,
are not well known for letting people get away with money; in this
case they would probably just ensure that their lawyer is bigger than
his in a civil action against him.
Rod Speed
> Rod Speed wrote
>> Ronald Raygun <no....@localhost.localdomain> wrote
>>> Rod Speed wrote
>>>> It would work if the excess that takes it over the nil rate
>>>> band is given to the nephew before the individual dies,
>>>> and so doesnt appear to qualify for any inheritance tax.
>>> No it would not work, unless the giving was done more than 7 years prior to death.
>> What I said in the next para.
>>>> Its less clear if that giving was done before 7 years before death,
>>>> or whether they didnt bother to declare that so it wouldnt be counted.
>>> Read the OP again.
>> No thanks. You dont know that the original post got that detail right.
>> If it happened exactly as the original post stated,
>> it wouldnt have reduced the inheritance tax due.
> Well, we're agreed, then.
Nope, not on the other possibility, that it was deliberate tax fraud and
that what the nephew got happened after death and was done just so
the value of the estate was below the level at which inheritance tax applys.
>>> It is quite explicit in stating that the payment
>>> was made *on* (i.e. after) the mother's death.
>> See above.
>> I find it hard to believe that any solicitor got involved
>> with a deliberate defauding of the tax system,
> So do I.
On the other hand, there are plenty involved in schemes designed
to minimise tax, plenty of which fly very close to the wind legally.
>> Guess its possible that someone decided that the tax authoritys might
>> not notice it if the nephew got it, but its all looking pretty implausible...
> Indeed. It's a routine requirement of probate court to require the
> executor(s) to provide certificates issued by the banks of balances
> *at date of death*, and therefore any funds sitting in the deceased
> accounts then, but disposed of later, could not escape the court's attention.
That doesnt mean that no one ever does stuff like that tho.
In fact that might be another area where the OP mangled the story and it
might not have been done with any knowledge by the solicitor involved etc.
>>>> And it isnt even illegal to arrange to have it given back later either.
>>> Yes it is, it would fall under the "gifts with reservation" rules, which
>>> basically provide that such "temporary" gifts with strings attached
>>> simply do not qualify for the tax exemption accorded to *real* gifts.
>> Doesnt make it illegal.
> It isn't illegal for the deceased to make loans.
It isnt necessarily a loan. It can also just be a gift with an agreement to give it back again later.
> It may well not even be illegal for the deceased executors to make loans out of the
> deceased's estate before probate has been granted (but certainly highly dubious).
Yes, but thats just as true of the worst of the attempts to drive a truck thru the tax law.
> But it certainly would be illegal to mis-state the value of the
> deceased's estate by excluding the value of any such loans.
Not if the solicitor wasnt actually aware of that aspect, contrary to what the OP stated.
>>>>> So I'm starting to agree with the people who've said
>>>>> such a scheme, if anything, wouldn't work anyway,
>>>> Corse it does as long as the gifting is done 7 years before the death.
>>> But it wasn't.
>> You dont know that.
> We can only go by what the OP actually stated.
We can also consider what the OP may have mangled/misstated.
>>> Where there has been deliberate collusion to defraud the taxman,
>>> anyone trying to use the courts in such an internecine wrangle
>>> would be an idiot, unless they were very confident that they
>>> could refute any allegations of being part of the collusion.
>> But there wouldnt be any illegality involved if the
>> OP mangled the story on when it was 'given'
> Er, you don't know that. :-)
Yes I do if for example the gift had happened 7 years or more before the death.
The main question is why that wouldnt have been to those due to inherit tho.
>>> It should also be said that it's preposterous to suggest that
>>> the "family solicitor" would willingly facilitate such an act of
>>> evasion, unless of course there was something in it for him,
>>> and he was confident of being able to conceal the crime.
>>> No solicitor would be daft enough to risk his career
>> He wouldnt necessarily lose his career over something like that.
> Yes he would.
No he wouldnt.
> A solicitor found guilty of participation in fraud
> would forever lose the right to work as a solicitor.
It aint as black and white as that.
Most obviously when he had been mislead himself.
And he wouldnt necessarily be stuck off forever
either even if he had been deliberately involved.
There's been plenty of examples of tax avoidance schemes that havent
seen any career penaltys for the legals involved when it comes unstuck.
>>> unless the payoff was sufficient to set him up for life.
>>> A measly few hundred k would hardly qualify.
>> I personally know one solicitor who did just that. He eventually got caught.
> Well, as it happens, I too personally know a solicitor who
> "borrowed" funds from a dead client and was caught. He
> was struck off for professional misconduct, and spent time
> in prison. But at least he didn't do it at someone else's behest.
So your claim that a solicitor would only ever do that if he
was certain to set himself up for life is clearly just plain wrong.
> I suppose a solicitor who was known to be in financial
> difficulties could be exploited by crooked clients,
Corse they can be.
> but it would, I think, be rare to find such a solicitor, since,
> despite exceptions, they are generally pretty well paid.
Pigs arse they are with such minor matters.
And there are plenty who are just financially incompetant
and get themselves into difficultys just because of that too.
And plenty who do get involved in dubious transactions when those
who benefit from the transactions are known to them personally too.
Some are just fools who dont agree with that aspect of the law and who
choose to do an end run around the law when its unlikely they will get caught.
We've even had a senior judge who was stupid enough to lie about who was
driving his car when he got caught by a speed camera, just to avoid the fine
which only hundreds of bucks. Did that more than once too. And got caught.
We'll never know how many have been equally stupid and never got caught.
Rod Speed
>>>>> Bottom line IMO,
Irrelevant to whether he would ever be fined.
> Whether or not he knows it might be illegal is a different matter
> as ignorance of the law is in general not accepted as a defence.
Irrelevant to whether he is ever likely to be convincted, when
the standard of proof required is beyond reasonable doubt.
Its unlikely that they were stupid enough to put it in writing in a formal contract etc.
> The potential loser is the Crown and their agents, HMRC,
> are not well known for letting people get away with money;
They do however have to prove the crime in a court of law before they can fine anyone for
a breach of the law, and that requires proof beyone reasonable doubt for a criminal offence.
> in this case they would probably just ensure that their
> lawyer is bigger than his in a civil action against him.
Thats not what would be required for a FINE as a result of a breach of the law.
Lou
"TJ" <T...@no.not> wrote in message
I'm having a little trouble understanding what's going on here. In the US,
it's perfectly OK, even smart, to arrange your affairs in such a way as to
**avoid** taxes. It's not legal to **evade** taxes - engage in illegal
activities to escape paying taxes. Interchanging the terms makes
understanding the description of the situation difficult.
I'm at a loss to see how paying any amount of money to anyone after
someone's death would reduce the value the estate had at the time of death,
and I'd think it was the value at the time of death that would be subject to
inheritance tax.
If the object of the exercise was to evade taxes, it sounds like the nephew
is refusing (conveniently but perhaps properly) to engage in some illegal
activity. It sounds like the uncle and aunts gave him a generous gift of
£100,000 (are there gift taxes in the UK, and did the nephew have to pay
them?) and there's no obligation to return a gift. If the object of the
exercise was to evade taxes and it was arranged by the family solicitor, the
solictor should at the very least be disbarred (or whatever the UK
equivalent is).
>
> I would think if the relatives have cause of action against ANYONE, it
would
> be the "Solicitor" who assisted in creating the scam. But again, IANAL (I
> am not a lawyer) and even THAT would cause them to expose themselves as
> crooks.
>
> Bottom line IMO,
>
> Nephew: + 100K
> Relatives: 0
>
> Either that, or EVERYBODY goes to jail. :-)
>
> [...]
>
>
Charles Ellson
They don't need to use the criminal prosecution route to get the
money. A civil pursuit only requires them to tip the balance of
probability in their favour.
>> in this case they would probably just ensure that their
>> lawyer is bigger than his in a civil action against him.
>
>Thats not what would be required for a FINE as a result of a breach of the law.
>
But it wouldn't stop any civil penalties.
Rod Speed
The obvious way to do that is to get the value of the estate
down to a level at which no inheritance tax is payable.
> If the object of the exercise was to evade taxes, it sounds like the nephew is
> refusing (conveniently but perhaps properly) to engage in some illegal activity.
Nope, he already did that when he accepted the money in the first place.
It isnt illegal to return it now.
> It sounds like the uncle and aunts gave him a generous gift of �100,000
It wasnt theirs to give, and it clearly wasnt a gift.
> (are there gift taxes in the UK,
Nope, not in this case.
> and did the nephew have to pay them?)
Nope, because they arent owed.
> and there's no obligation to return a gift.
There is if it was made clear that it was only a gift to avoid the inheritance tax.
> If the object of the exercise was to evade taxes and it was
> arranged by the family solicitor, the solictor should at the
> very least be disbarred (or whatever the UK equivalent is).
It doesnt work like that with tax avoidance schemes.
Rod Speed
>>>>>>> Bottom line IMO,
They do need to use the criminal prosecution to do what was being discussed, FINE that individual.
> A civil pursuit only requires them to tip the balance of probability in their favour.
And that wouldnt necessarily involve the nephew, just those who avoided inheritance tax.
>>> in this case they would probably just ensure that their
>>> lawyer is bigger than his in a civil action against him.
>> Thats not what would be required for a FINE as a result of a breach of the law.
> But it wouldn't stop any civil penalties.
Pity it was fines being discussed before you jumped into this subthread.
Rod Speed
> He may be an accessory or a conspirator,
And that would have to be proven beyond reasonable doubt in a criminal court.
> but the principal offender will be whoever files for IHT clearance
> by means of a false statement which omits the value to the estate
> of the repayment owed and due from the nephew.
And that clearly wont be the nephew.
catchme
happens all the time- there are so many "legal" ways to avoid paying
taxes for those who earn the big bucks, that the middle class strike up
schemes similiar to, while yet not fully achieving, the legal
requirements to qualify as a shelter, loophole, or deduction.
tim (not at home)
"Lou" <lpogoda...@comcast.net> wrote in message
news:q4mdncXvxd78rE7a...@comcast.com...
What you are missing is that we don't believe the guy's story as posted and
are looking (well some of us are) for some way to make it sensible whilst
discussing some legal stuff in between.
You are right:
1) Loaning the money after death will be ineffective for IHT purposes and it
will require a fraudulent declaration for there to be any effect (and as I
posted earlier, a fraudulent declaration could have been made without the
nephew's involvement).
2) A solicitor is unlikely to get involved in such a declaration.
So either the facts are wrong, or we have a troll. But this doesn't mean
that there aren't some genuine legal/financial issues to discuss.
Unfortunately, some people are discussing them on the assumption that we
believe the original story.
tim
Aardvark
> a
> written contract carries more weight than a verbal one
A verbal contract isn't worth the paper it's written on :-)
Dunno who originally said that (it certainly wasn't me) but I just HAD to
throw it in at this juncture.
HTH and HAND
--
Liverpool. European City Of Culture 2008
http://www.liverpool08.com
Martin
"Aardvark" <aard...@youllnever.know> wrote in message
news:RKQAj.29$fx1...@newsfe4-gui.ntli.net...
> On Sat, 08 Mar 2008 18:43:02 +0000, _ wrote:
>
>> a
>> written contract carries more weight than a verbal one
>
> A verbal contract isn't worth the paper it's written on :-)
>
> Dunno who originally said that
G, of MGM....
He should, of course, have said "oral", not "verbal"....
> HTH and HAND
HAND ...???
R. Mark Clayton
"johnclayton_____" <voi...@voidacious.net> wrote in message
news:aKvAj.6568$kN5....@newsfe1-gui.ntli.net...
>A friend who is normally resident in the U.K., on the recent death of his
> mother in Scotland arranged with his two sisters and the family solicitor
> (in Scotland) to pay £100,000 to his nephew to 'reduce' the inheritence
> tax
> they would have to pay because of the value of the mother's house.
I don't see how this works, unless it was paid seven years before death.
>
> It was made clear to the Nephew by the mother's three children that this
> money was *not permanently* given to him, and that he was expected to pay
> it
> back at a later date.
>
> This understanding that he would pay it back, was also made clear to the
> solicitor in Scotland who 'arranged' the transaction. The solicitor also
> knew that this payment to the nephew was to *evade* (avoid) paying the
> full
> inheritance tax.
>
> Surprise, surprise... the Nephew does not want to pay the money back. He
> is
> now turning nasty and unco-operative. What advice might it possible
> to give in this situation to try to recover some of this *stolen* money?
> Thanks.
>
If this goes to court then
a. It won't wash because it is an illegal purpose.
be. HMRC are going to want the £40k stolen from them and then some in
interest and penalties.
If you seriously want to avoid death duties then you need better legal
advice. Back in 1953 the then 2nd Duke of Westminster oddly bequeathed
almost his entire fortune (Mayfair and thereabouts) to a cousin's son aged
2, who would later go on to become the 6th Duke in 1979.
The results of this exercise were that providing the child survived, death
duties would be avoided on the deaths of the 3rd, 4th and 5th Dukes (in '63,
67 and '79) Even so they paid £13M back then (about £250M today)
johnclayton_____
Thanks to all. On further enquiry I now have some factual points that have
been queried by posters in this group,
It was in fact 'before' the mother died that she passed the £100,000 on to
the nephew on the understanding that it was to bring her inheritence below
the 40 % inheritence tax threshold, and the understanding was also that this
money given to the nephew was to be *returned* to the family at a later
date. The family in this case being the mother's son and two daughters.
A large part of the family's grievance is not so much that the nephew has
kept the money, but that he is now refusing to 'share' this money with
either
his own brother or cousin.
My friend says that as far as he understands it, this transaction to the
nephew was what is called a 'deed of variation' ( where if all the
beneficieries of the will agree they can 'change' the will). The money was
passed on to the nephew on to the death of the family's father a couple of
years
before the family's mother passed away. The friend also says that the
solicitor 'understood' the purpose of transferring the money to the nephew
(to reduce the
inhritance tax threshold) and that the solicitor also knew that the nephew
was expected to return the money to the family at a later date.
The nephew seems to be in triumph now, telling the family that the
solicitor will not help them with their situation, because the solicitor
knows she has done something 'illegal'.
I don't know if transferring the money to the nephew before the death of the
mother qualifies as illegal or not, but it does appear that the solicitor
knew of the *intention* (i.e. lowering the inhritance tax threshold) behind
transferring
the money to the nephew.
If the nephew is made to at least *share* the money (which he previously
had agreed to pay back to the family, i.e. the mother's son and the two
sisters) with his brother and cousin that would be a major step forward as
far as the family is concerned.
Thanks for any further advice.
Martin
IANAL, but as I understand things...
(a) the money xfrd to Nephew was a loan, therefore it forms part of the
Mother's estate for IHT purposes.
(b) the loan was perfectly legal, but not including that sum in the IHT
return was illegal.
(c) even if the money was a gift, the entire sum would still be part of
the estate, since 3 years had not elapsed before Mother's death (assuming
the "gift" was not from surplus income).
--
Martin
R. Mark Clayton
>
> Thanks to all. On further enquiry I now have some factual points that
> have
> been queried by posters in this group,
>
> It was in fact 'before' the mother died that she passed the £100,000 on to
> the nephew on the understanding that it was to bring her inheritence below
> the 40 % inheritence tax threshold, and the understanding was also that
> this
> money given to the nephew was to be *returned* to the family at a later
> date. The family in this case being the mother's son and two daughters.
>
> The nephew seems to be in triumph now, telling the family that the
> solicitor will not help them with their situation, because the solicitor
> knows she has done something 'illegal'.
>
> I don't know if transferring the money to the nephew before the death of
> the
> mother qualifies as illegal or not, but it does appear that the solicitor
> knew of the *intention* (i.e. lowering the inhritance tax threshold)
> behind transferring
> the money to the nephew.
It wouldn't matter if it was a loan (to be repaid) or a gift. If the former
it is an asset of the estate that should be declared, and if the latter then
it is a pre death settlement which counts to wards IHT.
If the solicitor knew of this and either knew or should have guessed at its
purpose then s/he could be in very hot water indeed.
>
> If the nephew is made to at least *share* the money (which he previously
> had agreed to pay back to the family, i.e. the mother's son and the two
> sisters) with his brother and cousin that would be a major step forward as
> far as the family is concerned.
> Thanks for any further advice.
>
>
How about he keeps the 40% they would have lost anyway and pays 20% to each
of the others. OTOH my guess is that he has already spent the money.
Tim Woodall
Martin <n...@barrier.ngngng.fsnet.co.uk> wrote:
>
>>
>> My friend says that as far as he understands it, this transaction to the
>> nephew was what is called a 'deed of variation' ( where if all the
>> beneficieries of the will agree they can 'change' the will). The money
>> was
>> passed on to the nephew on to the death of the family's father a couple of
>> years
>> before the family's mother passed away.
>
>
> (a) the money xfrd to Nephew was a loan, therefore it forms part of the
> Mother's estate for IHT purposes.
No. It looks like the fathers will was changed so that 100k went to the
nephew rather than to the mother. I don't think this can possibly be a
loan or technically even a gift. It's a straight inheritance.
>
> (b) the loan was perfectly legal, but not including that sum in the IHT
> return was illegal.
>
> (c) even if the money was a gift, the entire sum would still be part of
> the estate, since 3 years had not elapsed before Mother's death (assuming
> the "gift" was not from surplus income).
>
I think the "gift" has come from the fathers estate in order to use up
his IHT allowance. The residue then went to the mother free of IHT.
Tim.
--
God said, "div D = rho, div B = 0, curl E = - @B/@t, curl H = J + @D/@t,"
and there was light.
Peter Crosland
The situation you have described is quite different from that in your
original post. Having said that it is extraordinary that a solicitor would
be party to such a scheme. It would be quite possible use a deed of
variation so that part of the husbands estate passed to someone other than
his wife so that on the wife's death her estate would be below the IHT
threshold. The problem would be that such a transaction would mean that the
recipient would own the money outright with no obligation to return it and
the solicitor would know this. It makes me wonder if the "story" you have
been told is accurate at all.
Peter Crosland
Rod Speed
> Thanks to all. On further enquiry I now have some factual points that have been queried by posters in this group,
> It was in fact 'before' the mother died that she passed the £100,000 on to the nephew on the understanding that it was
> to bring her inheritence below the 40 % inheritence tax threshold, and the understanding was also that this money
> given to the nephew was to be *returned* to the family at a later date. The family in this case being the mother's
> son and two daughters.
Why didnt she give it to them instead ?
> A large part of the family's grievance is not so much that the nephew has kept the money, but that he is now refusing
> to 'share' this money with either his own brother or cousin.
Then she should have given it to whoever she intended to get it in the first place.
> My friend says that as far as he understands it, this transaction to the nephew was what is called a 'deed of
> variation' ( where if all the beneficieries of the will agree they can 'change' the will). The money was passed on
> to the nephew on to the death of the family's father a couple of years before the family's mother passed away.
Then unless they lied about the detail, no inheritance tax was avoided.
> The friend also says that the solicitor 'understood' the purpose of transferring the money to the nephew (to reduce
> the inhritance tax threshold) and that the solicitor also knew that the nephew was expected to return the money to
> the family at a later date.
Why didnt he tell them that it made a lot more sense to give
it to whoever she wanted to end up with it in the first place ?
> The nephew seems to be in triumph now, telling the family that the solicitor will not help them with their situation,
> because the solicitor knows she has done something 'illegal'.
That might well be true if they failed to declare that gift
that didnt end up happening 7 years before her death.
> I don't know if transferring the money to the nephew before the death of the mother qualifies as illegal or not,
No it doesnt. What may well be illegal tho is not saying that it only
happened less than 7 years before she died, because if they had
said that, inheritance tax would have been due on that gift.
> but it does appear that the solicitor knew of the *intention* (i.e. lowering the inhritance tax threshold) behind
> transferring the money to the nephew.
Yes, its a very commonly used way to avoid paying inheritance tax.
Perfectly legal as long as you dont lie about when the gift was made.
> If the nephew is made to at least *share* the money (which he
> previously had agreed to pay back to the family, i.e. the mother's
> son and the two sisters) with his brother and cousin that would be a major step forward as far as the family is
> concerned.
The question remains, why wasnt it given to who she wanted to receive it ?
> Thanks for any further advice.
The short story is that they are out of luck if they lied about when the gift happened.
They might well be able to get the money back from the nephew if they have any
evidence that he was supposed to give it back, but thats not very likely since the
mother could have just given it to who was intended to receive it, and inheritance
tax will be due because it didnt happen more than 7 years before she died.
Rod Speed
Nope, no solicitor is required to act on guesses.
He isnt even in any legal difficulty if he didnt ask what the purpose of the loan to the nephew was either.
>> If the nephew is made to at least *share* the money (which he
>> previously had agreed to pay back to the family, i.e. the mother's
>> son and the two sisters) with his brother and cousin that would be a
>> major step forward as far as the family is concerned.
>> Thanks for any further advice.
> How about he keeps the 40% they would have lost anyway and pays 20% to each of the others.
Why should he do other than keep the lot ?
Martin
"Tim Woodall" <dev...@woodall.me.uk> wrote in message
news:slrnft88kg....@laptop.home.woodall.me.uk...
> On Sun, 09 Mar 2008 17:29:50 GMT,
> Martin <n...@barrier.ngngng.fsnet.co.uk> wrote:
>>
>>>
>>> My friend says that as far as he understands it, this transaction to the
>>> nephew was what is called a 'deed of variation' ( where if all the
> ^^^^^^^^^^^^^^^^^
>>> beneficieries of the will agree they can 'change' the will). The money
>>> was
>>> passed on to the nephew on to the death of the family's father a couple
>>> of
>>> years
>>> before the family's mother passed away.
>>
>> IANAL, but as I understand things...
>>
>> (a) the money xfrd to Nephew was a loan, therefore it forms part of
>> the
>> Mother's estate for IHT purposes.
>
> No. It looks like the fathers will was changed so that 100k went to the
> nephew rather than to the mother. I don't think this can possibly be a
> loan or technically even a gift. It's a straight inheritance.
If you mean a deed of variation, then indeed it was a gift. And thus the
nephew is entitled to keep the money.
>> (b) the loan was perfectly legal, but not including that sum in the
>> IHT
>> return was illegal.
>>
>> (c) even if the money was a gift, the entire sum would still be part
>> of
>> the estate, since 3 years had not elapsed before Mother's death (assuming
>> the "gift" was not from surplus income).
>>
> I think the "gift" has come from the fathers estate in order to use up
> his IHT allowance. The residue then went to the mother free of IHT.
There would, of course, be no IHT anyway when the spouse inherits.
So presumably the plan was to reduce her estate, in case she died within 7
years.
This scenario could render the whole thing legal - but the family now
realise the Nephew's share was a gift not a loan. The obvious step is
therefore to sue the solicitor for the £100k they've discovered they can't
retrieve.
That will be one to watch...!!
TJ
Which (despite the changes to the story) is what I've said from the start.
>>> (b) the loan was perfectly legal, but not including that sum in
>>> the IHT
>>> return was illegal.
>>>
>>> (c) even if the money was a gift, the entire sum would still be
>>> part of
>>> the estate, since 3 years had not elapsed before Mother's death
>>> (assuming the "gift" was not from surplus income).
>>>
>> I think the "gift" has come from the fathers estate in order to use
>> up his IHT allowance. The residue then went to the mother free of
>> IHT.
>
> There would, of course, be no IHT anyway when the spouse inherits.
>
> So presumably the plan was to reduce her estate, in case she died
> within 7 years.
>
> This scenario could render the whole thing legal - but the family now
> realise the Nephew's share was a gift not a loan. The obvious step is
> therefore to sue the solicitor for the £100k they've discovered they
> can't retrieve.
I've also claimed that the only course of action (if any) is against the
solicitor from the start.
> That will be one to watch...!!
It'll never happen. EVERYBODY concerned on the "accusing side" could EASILY
be made to look as though they've "dirty hands".
Martin
"TJ" <T...@no.not> wrote in message
No it isn't. You need to re-read your posts in this thread - "from the
start", where you say
"Don't know how it works in the UK, but if the same thing happened in the US
I doubt he would "rightfully" owe them a dime."
.. and you go on to talk about scams, which it now appears it wasn't.
And why did you find it necessary to use foul language in your first post?
Is it an american "limited vocabulary" thing? Certainly doesn't tempt me to
take much notice of anything else such puerile posters try to say.
>>>> (b) the loan was perfectly legal, but not including that sum in
>>>> the IHT
>>>> return was illegal.
>>>>
>>>> (c) even if the money was a gift, the entire sum would still be
>>>> part of
>>>> the estate, since 3 years had not elapsed before Mother's death
>>>> (assuming the "gift" was not from surplus income).
>>>>
>>> I think the "gift" has come from the fathers estate in order to use
>>> up his IHT allowance. The residue then went to the mother free of
>>> IHT.
>>
>> There would, of course, be no IHT anyway when the spouse inherits.
>>
>> So presumably the plan was to reduce her estate, in case she died
>> within 7 years.
>>
>> This scenario could render the whole thing legal - but the family now
>> realise the Nephew's share was a gift not a loan. The obvious step is
>> therefore to sue the solicitor for the £100k they've discovered they
>> can't retrieve.
>
> I've also claimed that the only course of action (if any) is against the
> solicitor from the start.
No - you've had it mostly wrong. You wrote "And maybe not even THEN, since
there was a willful (by all parties concerned) attempt to defraud whatever
the UK's version of the IRS is."
The thrust of the story now is that there may not in fact have been any
attempt to defraud or evade.
In the UK, "tax avoidance" is quite a different matter and perectly legal
and normal.
>> That will be one to watch...!!
>
> It'll never happen. EVERYBODY concerned on the "accusing side" could
> EASILY be made to look as though they've "dirty hands".
That now looks far from the case.
--
Martin
Peter Crosland
Do you really believe that the solicitor did not explain this to them? I
suspect that the story given to the OP still has some critical flaws in it.
Peter Crosland
Martin
"Peter Crosland" <g6...@yahoo.co.uk> wrote in message
news:13t8h4k...@corp.supernews.com...
> Martin wrote:
< snip >
>> This scenario could render the whole thing legal - but the family now
>> realise the Nephew's share was a gift not a loan. The obvious step is
>> therefore to sue the solicitor for the £100k they've discovered they
>> can't retrieve.
>
> Do you really believe that the solicitor did not explain this to them? I
> suspect that the story given to the OP still has some critical flaws in
> it.
Like you and the OP, I've still no idea what precisely happened. But
solicitors carry PII for a reason, and I can assure you there are plenty of
successful actions against solicitors.
Equally, there are plenty of clients who don't "hear" or digest what
solicitors tell them.
--
Martin
Peter Crosland
TJ
How did that change? Does the nephew now (rightfully/legally) owe the
family the 100K?
> .. and you go on to talk about scams, which it now appears it wasn't.
Sure it was. By the OP's own admission the "gifting" of the money to the
nephew was a willful and deliberate attempt at tax evasion by all parties
concerned, including the solicitor. Did you read the INITIAL post?
> And why did you find it necessary to use foul language in your first
> post? Is it an american "limited vocabulary" thing? Certainly
> doesn't tempt me to take much notice of anything else such puerile
> posters try to say.
Sorry if my use of the "F-word" offended your tender heart.
>
>
>>>>> (b) the loan was perfectly legal, but not including that sum in
>>>>> the IHT
>>>>> return was illegal.
>>>>>
>>>>> (c) even if the money was a gift, the entire sum would still be
>>>>> part of
>>>>> the estate, since 3 years had not elapsed before Mother's death
>>>>> (assuming the "gift" was not from surplus income).
>>>>>
>>>> I think the "gift" has come from the fathers estate in order to use
>>>> up his IHT allowance. The residue then went to the mother free of
>>>> IHT.
>>>
>>> There would, of course, be no IHT anyway when the spouse inherits.
>>>
>>> So presumably the plan was to reduce her estate, in case she died
>>> within 7 years.
>>>
>>> This scenario could render the whole thing legal - but the family
>>> now realise the Nephew's share was a gift not a loan. The obvious
>>> step is therefore to sue the solicitor for the £100k they've
>>> discovered they can't retrieve.
>>
>> I've also claimed that the only course of action (if any) is against
>> the solicitor from the start.
>
>
> No - you've had it mostly wrong. You wrote "And maybe not even THEN,
> since there was a willful (by all parties concerned) attempt to
> defraud whatever the UK's version of the IRS is."
How is what I wrote above incorrect? You may want to reread it before you
reply. Pay careful attention to my use of the word, "maybe".
> The thrust of the story now is that there may not in fact have been
> any attempt to defraud or evade.
Now pull the other one. Most likely, the original post indicating the whole
thing was a scam (solicitor included) to avoid paying inheritance tax was
the real truth. The subsequent backpeddle probably came as a result of
either the OP realizing publishing such information for the whole world to
see (and possibly lead to his/her identity) was a huge mistake, or somebody
alerting the OP to same.
> In the UK, "tax avoidance" is quite a different matter and perectly
> legal and normal.
>
>
>>> That will be one to watch...!!
>>
>> It'll never happen. EVERYBODY concerned on the "accusing side" could
>> EASILY be made to look as though they've "dirty hands".
>
> That now looks far from the case.
Says you.
Lou
>
> Thanks to all. On further enquiry I now have some factual points that
have
> been queried by posters in this group,
>
> It was in fact 'before' the mother died that she passed the £100,000 on to
> the nephew on the understanding that it was to bring her inheritence below
> the 40 % inheritence tax threshold, and the understanding was also that
this
> money given to the nephew was to be *returned* to the family at a later
> date. The family in this case being the mother's son and two daughters.
That makes it sound like a loan, and the loan is still part of the estate,
and taxes would be due.
>
> A large part of the family's grievance is not so much that the nephew has
> kept the money, but that he is now refusing to 'share' this money with
> either
> his own brother or cousin.
If mom wanted the money spread around, she could have distributed one-third
shares to each recipient the family now thinks should get it.
Martin
"TJ" <T...@no.not> wrote in message
> Martin wrote:
< snip >
>>>> If you mean a deed of variation, then indeed it was a gift. And thus
>>>> the nephew is entitled to keep the money.
>>>
>>> Which (despite the changes to the story) is what I've said from the
>>> start.
>>
>> No it isn't. You need to re-read your posts in this thread - "from
>> the start", where you say
>>
>> "Don't know how it works in the UK, but if the same thing happened in
>> the US I doubt he would "rightfully" owe them a dime."
>
> How did that change?
The bit about you not knowing "how it works in the UK" hasn't changed.
But I can't see where you wrote ( to the effect that ) "If you mean a deed
of variation, then indeed it was a gift."
Your point was, unequivocally, that there was no way to force the Nephew to
repay. That was not necessarily the case, since there is nothing in the OP
which shows the "loan" was anything other than a loan - except the OP's use
of the word "evade", which suggests an illegal act (tax evasion), but which
he immediately clarifies as "avoid" (a common and legal activity). It is
common (in the context of UK tax) for people to confuse these two words.
If the loan was not repayable, as you claim, then it must have been a gift.
As such, where is the illegality / fraud / tax evasion which you allege?
> By the OP's own admission
How can the OP "admit" something which, at the time, he didn't know - and
has subsequently described differently?
> Sorry if my use of the "F-word" offended your tender heart.
Apology accepted. It's not just my tender heart - it always belittles the
writer and hence his writings.
>> No - you've had it mostly wrong. You wrote "And maybe not even THEN,
>> since there was a willful (by all parties concerned) attempt to
>> defraud whatever the UK's version of the IRS is."
>
> How is what I wrote above incorrect? You may want to reread it before you
> reply. Pay careful attention to my use of the word, "maybe".
Your "maybe" refers to "not even then". There was no "maybe" about your
assertion that "there was a wilful (by all parties concerned) attempt to
defraud"
> whatever the UK's version of the IRS is.
Affectionately known as "Her Majesty's Revenue and Customs" (HMRC).
>>> It'll never happen. EVERYBODY concerned on the "accusing side" could
>>> EASILY be made to look as though they've "dirty hands".
>>
>> That now looks far from the case.
>
> Says you.
Yes. YMMV.
goo...@woodall.me.uk
>
> Do you really believe that the solicitor did not explain this to them? I
> suspect that the story given to the OP still has some critical flaws in it.
>
reduce the estate for IHT reasons perfectly legally. Let's say, for
example 400k estate with three people due to inherit that didn't quite
turn out the way everybody expected. (Most common instance of this
that I've heard of is people signing over their house in order to
avoid IHT only to either discover that the "gift" doesn't actually
count or that there ends up being a big CGT bill on an estate that
would be below the IHT threshold anyway)
Deed of variation gives 100k to the nephew from the father and so
reduces the mothers estate to 300k. Nephew agrees that in return for
getting his inheritance early, the other two can share the spoils when
the mother dies. Mother dies and it turns out the estate isn't worth
anything like 300k (maybe nursing home fees etc) and now the other two
now feel agrieved that they haven't even done as well as the nephew.
Tim.
Charles Ellson
"Have A Nice Day", a salutation used in the colonies m'lud.
Rod Speed
Trouble with this line is that it raises the question of why the money
wasnt given to those she intended to receive it instead of the nephew.
One obvious possibility is that it was considered to be less likely to be noticed
by the tax authoritys if she did die before the 7 years that is needed to make it
legally bulletproof on avoiding the inheritance tax due otherwise.
Aardvark
> On Sun, 09 Mar 2008 14:32:33 GMT, "Martin"
> <n...@barrier.ngngng.fsnet.co.uk> wrote:
>
>
>>"Aardvark" <aard...@youllnever.know> wrote in message
>>news:RKQAj.29$fx1...@newsfe4-gui.ntli.net...
>>> On Sat, 08 Mar 2008 18:43:02 +0000, _ wrote:
>>>
>>>> a
>>>> written contract carries more weight than a verbal one
>>>
>>> A verbal contract isn't worth the paper it's written on :-)
>>>
>>> Dunno who originally said that
>>
>>G, of MGM....
>>
Ah, yes! The inimitable Sam! I should have remembered.
>>He should, of course, have said "oral", not "verbal"....
>>
:-)
>>
>>> HTH and HAND
>>
>>HAND ...???
>>
> "Have A Nice Day", a salutation used in the colonies m'lud.
I used those acronyms somewhat ironically, mate.
And I'm certainly a damn' colonial :-)
Ronald Raygun
> goo...@woodall.me.uk wrote:
>>
>> Deed of variation gives 100k to the nephew from the father and so
>> reduces the mothers estate to 300k. Nephew agrees that in return for
>> getting his inheritance early, the other two can share the spoils when
>> the mother dies. Mother dies and it turns out the estate isn't worth
>> anything like 300k (maybe nursing home fees etc) and now the other two
>> now feel agrieved that they haven't even done as well as the nephew.
>
> Trouble with this line is that it raises the question of why the money
> wasnt given to those she intended to receive it instead of the nephew.
Quite so. But substitute "they" for "she". For the DoV to be possible,
all the father's heirs must have agreed. This presumably includes the
children.
> One obvious possibility is that it was considered to be less likely to be
> noticed by the tax authoritys if she did die before the 7 years that is
> needed to make it legally bulletproof on avoiding the inheritance tax due
> otherwise.
Eh? If the nephew's money came from the father's estate, it makes no
difference when the mother died, because it wasn't a gift from the mother.
Rod Speed
That hasnt been established.
> it makes no difference when the mother died,
> because it wasn't a gift from the mother.
But the 7 year rule cant apply to the father's estate, so there
goes the entire rationale for the nephew getting it temporarily.
Martin
"Charles Ellson" <cha...@ellson.demon.co.uk> wrote in message
news:ovtat397r0ab2sh59...@4ax.com...
D'oh - thanks...!!
> a salutation used in the colonies m'lud.
:-))
tim (not at home)
"Rod Speed" <rod.sp...@gmail.com> wrote in message
news:63lvmpF...@mid.individual.net...
> Ronald Raygun <no....@localhost.localdomain> wrote:
>> Rod Speed wrote:
>>
>>> goo...@woodall.me.uk wrote:
>>>>
>>>> Deed of variation gives 100k to the nephew from the father and so
>>>> reduces the mothers estate to 300k. Nephew agrees that in return for
>>>> getting his inheritance early, the other two can share the spoils
>>>> when the mother dies. Mother dies and it turns out the estate isn't
>>>> worth anything like 300k (maybe nursing home fees etc) and now the
>>>> other two now feel agrieved that they haven't even done as well as
>>>> the nephew.
>>>
>>> Trouble with this line is that it raises the question of why the
>>> money wasnt given to those she intended to receive it instead of the
>>> nephew.
>>
>> Quite so. But substitute "they" for "she". For the DoV to be
>> possible, all the father's heirs must have agreed. This presumably
>> includes the children.
>>
>>> One obvious possibility is that it was considered to be less likely
>>> to be noticed by the tax authoritys if she did die before the 7
>>> years that is needed to make it legally bulletproof on avoiding the
>>> inheritance tax due otherwise.
>
>> Eh? If the nephew's money came from the father's estate,
>
> That hasnt been established.
Yes it has. The term Dead of Variation confirms it.
tim
Rod Speed
> Rod Speed <rod.sp...@gmail.com> wrote
>> That hasnt been established.
> Yes it has.
Nope.
> The term Dead of Variation confirms it.
You dont know that it was what happened, particularly when he initially said
that the nephew got the money after the mother had died and that turned
out to be wrong. This latest variation could well be wrong too, particularly
when he still hasnt provided any good reason for the nephew to have got
the money temporarily rather than the deed of variation just distributing the
money to those who its supposed to be going to now, if the nephew was
prepared to return it. The story STILL has that very obvious hole in it and
it still isnt clear what actually happened.
Until that is explained, its either an incompetant troll or he's mangled the story.