General Chat

Does anyone know if you were left something in a will and it was a large amount of money, does the bank have the right to find out where the money came from? What If the person or persons giving you the money are annonymous? What would happen then?

Any thoughts please.

Ps Its not me unfortunately!

Florence
in the hebrides

When large sums of money are paid into a bank account, the bank an obligation under Anti Money Laundering Legislation to ensure that the funds are legitimate. This means knowing the identity of the customer and understanding the kinds of transactions in which the customer is likely to engage.

As far as the Inland Revenue (now called HMRC) is concerned, the recipient is not liable to tax on the sum received. However, if the money is invested, then the interest it earns may then become taxable.

I G P
IS CORRECT THE BANK FOLLOWS SUCH UNUSUAL PAYMENTS,

The bank I'm with asked me where the cash came from that I was paying in, it was only £500, which isn't a lot when you consider the amount tax evading goes on these days, but it was a lot of money for me.

Money inherited is subject to tax as part of your normal income for the year in which it is received.

It is however treated as though basic rate tax has already been paid, so no further tax is due unless the recipient is a higher rate taxpayer, or the sum is large enough to put them into the higher rate bracket.

If this is the case the legacy should be declared and the tax paid, but I suspect that many people don't bother and probably get away with it.

If a bank needs proof of it being an inheritance the name of the solicitor dealing with the will should be able to verify the fact the money is from an inheritance whether it's a named or anonymous source. :-)

Andysmum, that is not quite the case.

Money or indeed any other assets that are inherited are not treated as part of your normal income and therfore not subject to income tax. Only the profit, if any, subsequently earned is taxable. If you put the money into an interest bearing account the interest it earns would be taxable.

However you may be liable to pay inheritance tax, in certain circumstances.

This is what the Gov.Uk site says:-

You don’t usually pay tax on anything you inherit at the time you inherit it.

You may need to pay Income Tax on profit you later earn from your inheritance, eg dividends from shares or rental income from a property and Capital Gains Tax if you later sell shares or a property you inherited

The estate of the person who died usually pays Inheritance Tax. You may need to pay Inheritance Tax if the estate can’t or doesn’t pay it. You may need to pay Inheritance Tax on a gift the person gave you in the 7 years before they died.You may also need to pay it if your inheritance is put into a trust and the trust can’t or doesn’t pay.

If the will says the Inheritance Tax should be paid out of the assets you’ve inherited, the executor of the will or administrator of the estate will usually pay it.

HM Revenue and Customs (HMRC) will contact you if you need to pay.

Would Scottish inheritance laws be different?

Thanks for all you info, i will pass it on.

Florence
in the hebrides :-)