Can I use cryptocurrency to purchase my home?
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I have a modest amount invested in crypto-currencies that I would now like to use for the purchase of a house. However, my lender tells me that he cannot accept it and neither can the transfer lawyer I was hoping to use. What is the best way to use these funds for this type of purchase?
Daniel Browne, Senior Partner at Kingsley Napley, says there is currently a very limited appetite for sellers to accept cryptocurrencies across the UK. If you want to use your crypto investments to buy a home, this will usually involve converting to government-issued currency, such as the British Pound.
Part of the antipathy towards cryptocurrency stems from its high-profile association with crime and money laundering. The Proceeds of Crime Act 2002 criminalizes dealing in any way with property that a person knows or suspects to be the proceeds of crime. This applies to the owner of the assets and their professional advisers who are involved in the transaction.
However, while some lenders are reluctant to lend money when all or part of the deposit is made from the crypto proceeds, some are now ready to do so (notably Nationwide, Halifax and Barclays). Look for a cryptocurrency-friendly lender as early as possible in the home buying process.
The challenge is to find a transport agent who is willing to accept the proceeds of the crypto into their customer account. There are not a lot.
Money laundering regulations require transport agents to take steps to identify their client and verify that the funds they receive from a client are not proceeds of crime. This means that the provenance of crypto assets must be understood, including how they were traded and with whom.
This usually involves the instruction of an expert capable of performing a full audit on the cryptographic products used. This verification can then form the basis on which the transferor can judge whether it is safe to proceed with the proposed transaction.
Can I apply for a death grant even if we are not married?
My partner recently passed away. We have two children under the age of 18, but we were not married. Am I entitled to receive a widow’s allowance or any other type of bereavement allowance?
Jo Edwards, Partner and Head of Family Law at Forsters, says the main UK financial support to families after the death of a parent or partner is the Bereavement Support Payment (BSP). In 2017, this replaced a series of benefits, including Widowed Parent’s Allowance (WPA), Bereavement Allowance / Widow’s Pension, and Bereavement Payment.
At present, the BSP is reserved for people married or in a civil partnership with the deceased on the date of his death. As such, I am sorry to tell you that you are not currently eligible for BSP.
Rightly so, that will soon change following a string of government defeats in court over the difference in treatment between unmarried couples and their married counterparts when relationships end in death. It is increasingly difficult to justify this discrimination, especially as unmarried couples are the fastest growing type of family in the UK.
Four years ago, Siobhan McLaughlin, who found herself ineligible for bereavement benefits because she had not been married to the father of her children when she died, brought the inequality to the highest court.
In August 2018, the Supreme Court ruled that the old WPA’s narrow eligibility rules violated human rights. His reasoning was that the allowance exists because of the responsibilities of the deceased and the survivor towards their children, these responsibilities being the same whether they are married or not and that the children should not suffer this disadvantage because their parents chose to not to marry.
This was followed by another court judgment in 2020, which concluded that the same eligibility rules applicable to the new benefit – BSP – were also inconsistent, discriminating against children on the basis of the legal status of their relationship. parents.
After some delay, the government announced last month its intention to extend eligibility for both WPA and BSP to surviving unmarried partners with financially dependent children. The government intends the expanded eligibility rules to be backdated to August 30, 2018, with some claimants eligible to receive retrospective payments.
As such, you may soon be eligible for BSP, provided you were living together at the time of your partner’s death and the other conditions are met. The changes will apply to the whole of the UK.
BSP is paid at one of two rates, with an upfront payment of Â£ 3,500 followed by 18 monthly payments of Â£ 350 for people eligible for Family Allowance or who were pregnant when their partner died, or Â£ 2,500 thereafter. Â£ 100 per month in other cases (for those who do not receive child benefit). There are strict deadlines for submitting a claim, starting from the date of death, which may impact the amount received. In your case, you will have 12 months from the date of entry into force of the new regime to claim the full amount.
The rules governing WPA are different, although they may not apply to you. It’s worth considering whether you may be eligible for any in-service death benefits your partner may have accrued (which is usually not limited to surviving spouses and civil partners, but check the specific policy in question) and whether you are eligible to receive their pension benefits.
The opinions contained in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect results of reliance on responses, including any loss, and exclude all liability to the greatest extent possible.
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Our next question
My wife and I have been married for 40 years. We are not separated, nor do we wish to be, but for family reasons she returned to her native Norway in 1995, where she now lives as my non-domiciled wife. We agreed that when I died, all my belongings would be left to her and that she would divide them equally, at the rate of one third each, between her and our two children.
I thought she would inherit my estate tax free but I’m told she hasn’t as she hasn’t lived with me in the UK for 26 years. Does that mean she will only be entitled to the tax-exempt abatement of Â£ 325,000, plus my children, before they have to pay 40% inheritance tax? (IHT) on the residue?
It seems unfair because we think of each other as married like any other married couple. What advice can you give us to avoid or limit excessive IHT payments?