Advice needed

[Deafie]

I inherited some money when my mother died and had it in my UK bank account until the bank found out I was living in the US. At the time I was heavily in debt to the IRS and they had cleared out my US bank accounts, so in a moment of panic I transferred the funds into my sisters UK account for safe keeping, she had to sign papers stating that the money was indeed hers, something to do with money laundering.
I am now free of debt and wish to have the funds returned, my sister invested the money into the stock market with the intention of leaving it to me in her will when she dies. I am not crazy about this state of affairs and wonder if anyone here has any idea how I can legally get the money back under my control.
I just contacted the solicitor who handled mom's estate but he said it was a litigation case and they don't do that. As far as I know there will be no dispute re the money being returned.
Any ideas?
Thanks

 

[bikingdad90]

You need to speak to a solicitor and an accountant about it as there could be income tax consequences for taking money outside the UK.

 

[Deafie]

I don't want to take the money out of the UK, I just want to have it back in my control so I can invest it for myself in the UK

 

[ColinJ]

As far as I can see...

• If your sister agrees to transfer it back, you don't have a problem, unless there is a limit on how much she can transfer to you tax-free?
• If she does NOT agree, then you DO have a problem since you went along with the legal paperwork saying that it was hers. If you try to prove that it wasn't then you are saying that you both broke the law by saying that it was!

 

[PaulSB]

The fact you're asking the question suggests your sister is not prepared to return the money. This seems odd to me and I wonder if there is a problem between you and your sister? Why was there a problem with your UK bank account, there's no reason why you shouldn't have one.

Why would your sister invest your money without consulting you?

If she won't return the money your options are to wait till she dies and hope she leaves the money to you or take legal action now. Your sister might change her mind if threatened with legal action to avoid her previous dishonest/illegal action being exposed. Either way you're in a poor situation as result of dishonest or illegal action by you and your sister allowing you to avoid paying your debts to the IRS.

There seems to be dishonesty all around this situation. Chickens coming home to roost? All rather odd.

 

[Bazzer]

You need accountancy and possibly legal advice as you are potentially opening a pandora's box.
Aside from the dishonesty, if your sister is in the UK, CGT, IHT and Trusts are three issues which come to mind within the UK.
Assuming you are still in the US, I am unfamiliar with US taxes, but I am aware the IRS do not take kindly to being misinformed.
And even if you sort out the UK side of things and try to keep the US side "quiet", HMRC can and will exchange information with the IRS, so the IRS may find out through other means.

 

[Lozz360]

You say that your UK bank had a problem with the money in your account when they found out you were living in the US. Why was that? You also say there will be no dispute with your sister handing the money back. So why are you asking for advice? But then in a contradiction you say that your sister only intends to give the money back in her will when she dies. The fact that she has invested it in S&S is not relevant unless the sum is now much less as a result. Unless your sister is terminally ill or much older than you, there is a fair chance she will survive you, therefore, you won’t see the money anyway.

There seems to be a lot of gaps in your story with all due respect. I think your first task would be to talk to your sister, suggesting she transfers the shares over to you. Strange she didn’t discuss with you before she invested what was your money!

I take it you are still living in the US? Your location gives a clue to New York. Are you able tell us how much money we are talking about? It’s then easier for people to give advice if the value of the problem is known.

My gut feeling is, (I hope I’m wrong) is that the money is now gone. Her reason for not giving it back doesn’t make sense (money invested in S&S). Her “solution” is that the money will be returned to you when she dies, possibly from the sale of her property which she is currently living in.

 

[Ming the Merciless]

As far as I know there will be no dispute re the money being returned.

Ask for the money back. Job done.

 

[T4tomo]

You need a new bike....

Seriously, you aren't going to get the answers on the internet, talk to your sister and a lawyer. My one thought is your sister may be doing you a favour, as if she gives it back now, its uncovers the fraud you both committed by lying and saying it was hers when the IRS were after it....

I would suggest she drip feeds you an annual "gift" from the profits of it and sticks to her original plan

 

[Lozz360]

I have another question. Are you free of debt because you have paid back every cent owed to the IRS? Or are you free of debt because the IRS believe they have taken all the money (they think) you have? This is important IMHO because if it is the latter, you are still committing tax fraud by hiding funds. If it is the former then you are just straightening your finances out. I believe this point should be clear for anyone to give advice.

 

[icowden]

I transferred the funds into my sisters UK account for safe keeping, she had to sign papers stating that the money was indeed hers, something to do with money laundering.

It's simple. You gave the money to your sister. It is now hers. Legally.
You need to work with her if you want it returned to you, but she has no obligation to give it to you.
Talk to her and come to an arrangement.

 

[Deafie]

There are a lot of questions to answer here so rather than address them individually I shall try to clarify the situation as I have to go to work.

When this all happened I was broke ( apart from this inheritance ), semi homeless with very little work and I was drinking way too much, so I was not in a very rational state of mind. I have since got back on my feet, got a good job, paid off all my debts, found an apartment and mostly sobered up.

When the bank found out I am a US resident they told me that they would have to inform the IRS so I panicked and transferred the funds to my sisters account as the IRS had just cleaned out my US bank accounts, if I was a US citizen, which I am not, they would be able to do the same to any overseas accounts of mine too. It was a little over 40K

I don't believe I will have a problem with my sister giving it back but want to know exactly where I stand before asking for the shares or whatever to be returned as I am a little cynical when it comes to these things. I want to approach her with a viable plan in place.

My sister left me with the impression that returning the money would not be easy. I shall look for another solicitor

Thanks all

 

[si_c]

Sounds to me like you need to have a conversation with your sister. Returning the money would likely involve liquidating the investments which whilst unlikely to be difficult would probably take a bit of time depending on how she has it structured.

It may well be worth leaving it in the current state as it will be accruing value for you at the moment and speaking to your sister when you have a more definite plan for the money than just wanting it.

 

[Kingfisher101]

Is this a joke? Just ask her for it back but be aware all she needs to say is that you gave it for a gift and you wont be able to get it back.
You say she had to sign papers saying that the money was hers.., good luck with trying it get it back and getting someone to take it on for you. Solicitors here will start at around £250 plus per hour if not more.
Fraud is taken very seriously over here if an individual has been fiddling, do you want to potentially get your sister into trouble as well?

 

[Jody]

I don't believe I will have a problem with my sister giving it back but want to know exactly where I stand before asking for the shares or whatever to be returned

Ask nicely and see where you go.

Legally you signed a fraud/laundering document to say the money is hers, so you don't have a leg to stand on.