Unusual money problem

What specific problem do you see? The interest will belong to your relative, not to you, so you would not need to declare that part of the interest on your tax return. If keeping the money in an account in your name, it will make it easier to keep track of what part of the interest is whose if you just opened an additional account in your name.

You could open an online-only account in the relative's name. The relative would need to sign all the forms etc, but get you to set up the passwords, to be kept secret from him/her.

This is probably technically against the T&Cs, and the relative would have no leg to stand on should you run off with the dosh, but apart from that it should be OK. You'd need to think about what would happen if you got run over by a bus.

This arrangement is so unusual it is bound to trigger alarm bells when (as Sod's Law will dictate) it will be *your* business that comes up in the "Who Shall we Investigate Today?" lottery at the IR.

It must be a classic money-laundering technique. It is very expensive to prove you are not a drug smuggler when there is so much evidence to the contrary.

In message , Ronald Raygun writes

But he might have some explaining to do when the HM Revenue & Customs get the returns from the bank showing a huge wodge of interest being paid to him which aint on his SA return.

I was worried about triggering an IR enquiry into my business. I'll have to include the savings on my tax return, which will not tally with my earnings figures.

Cheers

You should NOT enter the interest in your SA Return. Your relative should enter in his/her/their Return(s).

I would open a separate account for this money.

Indeed, but such an explanation would be trivially forthcoming by pointing out that the interest has, as DR agrees, been reported on the relative's return.

Of course the explanation would be even easier (or rather the need for it would tend not to arise) if the money were put in a separate account

The evidence that he is a drug smuggler being?

It might be a good idea for the two parties to have a simple agreement drawn up and signed by a solicitor. This would describe what is being proposed and state the reasons for doing it, the source of the funds, who the money belongs to etc. That would help to protect both parties interests should complications arise in the future.

Chris

Absolutely none, but it is structured like many wire fraud and money laundering arrangements and I'd guess a report will wing it's way from the bank to NCIS in due course.

This is a Good idea

Peter

Hi all Thanks for the really useful feedback. As someone said, putting it into my name means I'll be paying tax on the interest at the bsoc end. So I'll have to show it on my tax return. And the capital deposit won't match with my earnings. And they won't believe me!

It's not worth my bother of taking the solicitor's agreement route, although that's probably the soundest idea. I think I'll tell the relative to put it into a long notice ac and try to get me, not them, to be the signatory.

Cheers

"Criminal lifestyle" - a large wodge of money in the bank and a c*ck and bull story about how it got there...

Proceeds of Crime Act 2002

"The Act tightens the definition of money-laundering, making it more difficult for crime bosses to distance themselves from baseline operations, and courts now need only a civil burden of proof - on the balance of probability - that assets were illegally obtained in order to "restrain" or freeze them at an early stage".

Bullshit. Simply having money in the bank doesn't constitute a criminal lifestyle. Lavish spending would be a better indicator.

Just one word: comingling.

Mark EquityValue Investiments

Nope. It's easy to piss away your ill-gotten gains and the pubs are full of dodgy subbies doing just that. The tricky bit is to legitimise the profits so you can reinvest them.

The bank manager who doesn't report a potential money-laundering operation is in big trouble (dunno what trouble so crossposted to uk.legal). The icing on the cake is that the police get to keep some or all of the proceeds they have confiscated!

Not just the bank manager. Any member of the bank's staff, hence all the apparently stupid questions cashiers now have to ask people who want to do business with the bank.

I'll have to dig out the rules and regulations we all had to sign, although how anyone thinks I'm going to spot evidence of money laundering is beyond me.

"Oh, look. That peak in usage on that UNIX box must mean Mr Smith is laundering money. Quick, I must inform my manager or face a stiff penalty"

Cheers,

John

No, you must not inform your manager. That would be tipping off, and lead to an even stiffer penalty. You must go straight to your money laundering reporting officer.

But it isn't a c*ck and bull story. The bank records would show that the money had come from the account of a close relative, and that relative could show that the funds were the proceeds of the sale of a property. I see no reason for any suspicion. Its not as if they're doing all this using cash.

You are not thinking this through. If you have half an hour to spare (and this is unmissable if you are a Star Trek fan!) have a read about the foolish Mr Tuvok in his own words:

I suspect the police probably had some other evidence of Mr Tuvok being involved in drugs that he's failing to mention. Its funny how people like that forget to tell the whole story. Apparently the confiscation of his assets was a result of the drug charges, it wasn't simply the assets themselves that triggered suspicion.

Whatever the facts of that case, that's not what's being discussed here. I got the impression this was a rather recent property sale, so there should be no problem proving the source of the funds.

In fact I was in a similar situation last year when I sold a commercial property. The bank I was intending to deposit the proceeds with wanted some evidence of where the money came from. I got the solicitor who handled the property sale to write a letter confirming all the details, and that was perfectly acceptable to the bank. Nobody else asked any questions, and nobody suggested I was a drug dealer!

Chris

It can't be a serious concern for you then.

Any written agreement, even without legal advice, would be better than none.