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Is it legal to buy stocks/bonds under my mother's name?

Klauz619 · 51 · 9554

Klauz619

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OFW here, I won't be in the philippines very long or often which makes things a problem in registering for a broker.

In addition while staying in the UK I will be taxed double on dividends and bonds so I was thinking of registering my mother's bank account to COLfinancial and send her money and manage here account myself(while here in the UK) where she will only be taxed by the philippine government.

Is this fraud/tax evasion? I don't think it should be since she will be legally paying all her dues to the phil govmnt.


alacrity

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Nope, you can even let her make an account and just give you the password. But you should make sure that your mother understands the real possibility of financial losses, so no hard feelings at the end of the day.


bauer

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Is this fraud/tax evasion? I don't think it should be since she will be legally paying all her dues to the phil govmnt.

It is a fraud because you are trading for another person's name/account (even if it is your mother).

it is not a tax evasion because the trading of stocks are a final tax. Although, your mother will be exposed to risks in income tax report.  But if you are a registered OFW, there will be no risk at all in local income tax reporting as long as the account is under your name.


prnd32

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I don't see anything illegal here so long as both (mother and child) give their mutual consent, and income are properly declared


keera

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It is a fraud because you are trading for another person's name/account (even if it is your mother).

Can you please elaborate sir? Because as far as I know, as long as you were given the right to trade in her behalf, it is accepted by law.


bauer

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^ There is a confusion here.  As I understand from the story of klauz619, he/she will use his/her own funds and then put his/her mother's name as the account owner.  In this case, there is a fraud, strictly in the letter of the law, because the final true beneficial owner of the account was him/her and not his/her mother or account holder.

@Keera, if you are authorized by your parents (who are the account holders) to trade on their behalf and it is your parent's money, then it is perfectly legal.



bauer

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I don't see anything illegal here so long as both (mother and child) give their mutual consent, and income are properly declared

^ Did you notice the declaration of klauz619 that under UK law, he/she will be taxed on dividends and income earn if it is under his/her name?  If the mother will declare the income, she has to explain to our local tax authorities, if audited, how she was able to trade in stocks.  If the mother does not know how to answer, trouble starts both for her and the 'opportunistic' child.


prnd32

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^mother has to tell the truth, i.e. child is doing the trading for her... what's illegal with that?


Klauz619

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^ Did you notice the declaration of klauz619 that under UK law, he/she will be taxed on dividends and income earn if it is under his/her name?  If the mother will declare the income, she has to explain to our local tax authorities, if audited, how she was able to trade in stocks.  If the mother does not know how to answer, trouble starts both for her and the 'opportunistic' child.

What if my mother just keeps all the assets/dividends/bonds in her name(me under beneficiary or whatever) and account while I'm still in the UK for 10-20 years?

Isipin mo nalang na supporta sa pamilya, di naman pwedeng pag rinegalo ka nang pera nang tito mo sa US tapos ginawa mong negosyo eh sya naman ang ikukulong pag kumita ka.


bauer

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^mother has to tell the truth, i.e. child is doing the trading for her... what's illegal with that?

^ If the mother will tell the truth, the child did the trading at the same time it is the child's own money and not the mother's money being traded, then there is a problem on its legality.


bauer

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What if my mother just keeps all the assets/dividends/bonds in her name(me under beneficiary or whatever) and account while I'm still in the UK for 10-20 years?

Isipin mo nalang na supporta sa pamilya, di naman pwedeng pag rinegalo ka nang pera nang tito mo sa US tapos ginawa mong negosyo eh sya naman ang ikukulong pag kumita ka.

^ donation and gifts are taxable.  Hindi ka naman makukulong as long as you pay the taxes.


prnd32

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^ If the mother will tell the truth, the child did the trading at the same time it is the child's own money and not the mother's money being traded, then there is a problem on its legality.

Technically, the money now belongs to the mother.  Note that Klauz619, as an OFW, will remit the money to the mother's account.  Still, no legal issues here.

Going back to Klauz619's original post, I'm not very sure if UK tax applies in case he maintains the Philippine account under his/her name (instead of the mother's).  As an OFW, I think his/her income derived from the Philippines will be subjected to Philippine income tax, not UK tax.  You may have to double check this Klauz619.   


Klauz619

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Technically, the money now belongs to the mother.  Note that Klauz619, as an OFW, will remit the money to the mother's account.  Still, no legal issues here.

Going back to Klauz619's original post, I'm not very sure if UK tax applies in case he maintains the Philippine account under his/her name (instead of the mother's).  As an OFW, I think his/her income derived from the Philippines will be subjected to Philippine income tax, not UK tax.  You may have to double check this Klauz619.

Well, technically I might not qualify as an OFW since I'm dual citizenship, I was employed directly while in europe using my EU passport. I don't even remember my SSS number and I don't think I have a tin,  the money will simply be wired from my UK bank account to my mother.


prnd32

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Well, technically I might not qualify as an OFW since I'm dual citizenship, I was employed directly while in europe using my EU passport. I don't even remember my SSS number and I don't think I have a tin,  the money will simply be wired from my UK bank account to my mother.

As to your question "Is it legal to buy stocks/bonds under my mother's name?", my answer remains YES provided income are properly declared by your mother.    Since you are not an OFW, your remittance will be subjected to Philippine tax.

Now, another question you need to ask yourself is what would you want to eventually do with the money in the your mother's name? Will you be sending it back to U.K., which might be again subjected to new taxes and charges based on UK laws,  or it will stay in the Philippines.  If you will claim it back again, I suggest you keep the money under your name and perhaps you want to consider trading in London stock exchange as well, which I think you qualify as a citizen/resident.



Klauz619

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As to your question "Is it legal to buy stocks/bonds under my mother's name?", my answer remains YES provided income are properly declared by your mother.    Since you are not an OFW, your remittance will be subjected to Philippine tax.

Now, another question you need to ask yourself is what would you want to eventually do with the money in the your mother's name? Will you be sending it back to U.K., which might be again subjected to new taxes and charges based on UK laws,  or it will stay in the Philippines.  If you will claim it back again, I suggest you keep the money under your name and perhaps you want to consider trading in London stock exchange as well, which I think you qualify as a citizen/resident.

I'll eventually take back the money, but only when im in the philippines.  The bond interest rates in the philippines are very high like 5-7%, much higher than EU for some reason, same for stock growth as well.


 


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