Dispensing lottery win to relatives

[scotman]

Just a speculative question.

Say someone wins a large amount (£Ms) on the lottery or similar and wants to remain anonymous. If this person then wants to give some to relatives, friends etc how can they do this and still retain anonymity assuming relatives would keep schtum.
Surely the UK money laundering regulations will compel the recipients to tell their bank etc where it came from and hence the cover will be blown.

Any suggestions appreciated.

[DTCwordfan]

The banks (sending and receiving) are under a requirement to remain stummm. Failure to do so would leave them open to being fined and sued.

[Barmaid]

I would do it like this:-

retain solicitors
let them make money laundering checks on me
put the money into the "AB Settlement for users in reduced circumstances"
Open bank account in name of the settlement
pay cheques to beneficiaries.

Thus the name on the cheque is "AB Settlement Trust". The beneficiary has no right to see the trust document or know the identify of the original settlor. Job's a good un!

[Davethedog]

Thing is after about a week papers aren't interested so if you won the Euro's tonight and gave your brother £5m, even if he went to the papers, you wouldn't get page 1

[johnk]

Barmaid, wouldn't there need to be a signaure on the cheque?

[Rapunzel61]

I shoudn't imagine they'd be bothered with just one large amount deposited. If money was gifted to you, it would be given in one chunk, surely,

[marg14a]

Hope i have this problem one day

[Barmaid]

Yes there would John, but that would be the signature of the trustees and not the settlor!

[joko]

what business is it of the banks were your money comes from? surely they have no rights to demand to know, unless its stolen...??


giving gifts is not laundering

[Dodger666]

As I live in hope of winning a large sum of money I would be more concerned as to the tax position.

Let's assume I won £15M on the Lotto. If I gave £12M to friends and family and popped my clogs a few weeks later the whole of the £15M plus anything I had before the win would make up my estate, I presume.

Only £325,000 is free of inheritance tax so £14,675,000+ would incur IHT @ 40%. The tax bill would be £5,870,000+. where would my executors get this money from to pay the tax bill?

Probably best to get financial advise before giving any away methinks.

[craft1948]

Why would you get taxed on money you'd given away?

[ubasses]

The Banks do have to know where your money comes from as unfortunately they have a legal obligation to ensure that there is no money laundering going on. If they are happy they do not take matters any further, when they have reason to believe there is anything iffy they have to make a report.

[Dodger666]

Craft

Any money you've given away during the seven years prior to your death has to be taken into account when you die. If the total sum of the estate is less than £325,000 there is no IHT to pay. Anything above that figure can be taxed at up to 40%. The IHT tapers off the longer you live until the seven years are up and then it's zero.

If you ever find yourself in this position it's important not to give the money away but to seek professional advice.

[weecalf]

Would imagine if you asked them what they would like... car, renovations ect you could pay for it that way you might avoid more tax as the goverment will have taken 20% in vat so thats the tax paid wouldnt it

[Dodger666]

I forgot to say that you are allowed to give away up to £3000 per year that doesn't count for weddings of your children and up to £250 per year of small gifts to anyone.

[DTCwordfan]

Dodger, there are legal ways of doing it - for example, you buy them property, usually through a trust to start tax avoidance down the line, they then rent from you at a peppecorn rent that falls within the amount that you can give them per year, i,e, you give them the money to pay youthe rent back.....They also become a benefactor of the house on your death - and yes, keeping a portion of the funds to cover liquidity of duties needs to be done. Financial advice is essential and something that Camelot provides.

However, one of the first things that I would do is to arrange my own team of advisers/(Tax/Wills and Testament Lawyer/Investment bankers and a neutral adviser such as a trusted friend (say one of mine who is a CA or a lawyer - and perhaps even both). And then I would buqqer off for a wee while to let any hoo-haa re the press and scroungers die down and ask them to bere for proposals on my return.