AIBU to offer friend big chunk of money?

Like this idea.

@Jaichangecentfoisdenom thank you - that’s really made my day!

It’s a lovely thing to do op, I have my own list in my mind of those I would do the exact same to if I came into cash

It's an imaginative idea. I am not against it but hope it's not too dreamy a one: this friend you see every few years...how close a friendship is it? Just a niggle there. Do you both see it as a vital close friendship akin to the equivalent of an enduring family bond or is this gift idea more connected to something in your own mind that appeals to your imagination?

That said, to proceed, I would only do this if it were to have the live-changing impact of buying a house. I wouldn't give it without strings. I'd speak to her on the phone, find out how she's faring, gauge the state of things with her etc, tell her to sit down, you have some good news: you've come into some money, would like to enable her to buy a house to secure her future as you've always wanted her to have that, considering how she was let down before, and will pay the sum of £50k or more, depending* into your solicitor's holding account and when she has found and offered on a house, to be paid over to the seller's solicitor as the required deposit plus a further contribution to the purchase price and confirmed by your solicitor to the building society she will be applying to for a mortgage to.

*You should know how much a house would cost where she lives and how much your sum will need to be to cover the deposit and to enable an affordable mortgage for her. If a house costs 200k, 50k might be enough but if it's 300k it might take all of the 80k.

I also wondered a bit about your own circumstances, i e, whether you have a mortgage, whether you are married, have a job, a pension, how much you think it is going to cost to upgrade your house - probably more than you expect - and how much of your assets are liquid or solely yours or jointly held. It's all a bit vague. You can be well off but a lot tied up in a house and a relationship with complexity like joint ownership, and assets can also be liabilities.

That's a lovely expression of your Grandma's, @Okaaaay, I've never heard it before (my Grandma just said "don't get old, dearie, don't get old", and boy do I understand her now!). I think it sums up what the OP wants to do and is a very kind and true way of looking at it.
I'm thoroughly demoralised by the people who think it's the wrong thing for the OP to do, for whatever reason. Clearly no joy or generosity in their lives at all!

That’s lovely OP. My grandma always used to say ‘give with a warm hand’ - it meant two things; to give before you die so you see people enjoy it, and to give with love and no expectation of how it will be spent.

I would call her the truth, that you value and and appreciate her friendship, that you have come into a modest amount of money and wish to share it with her. There is always a risk to your friendship but similarly, the opportunity to change the course of someone’s life probably outweighs the risk.

You have a very kind and thoughful heart.

Would an option be to......

buy a (no strings) share in a house of her choice, so she could perhaps find enough deposit to put down and get a mortgage in her name, with the proviso she chooses when to cash up/upgrade/move, so you either get your money back or continue your investment.

That way the money doesn't change hands, so she's not directly in receipt of a cash gift .

And you can make provision in your will for her to inherit your share.

Oh stop it, it's not her children's money.

I absolutely think you should do it, you seem like you have good motives for doing so and it will change her life! I also think you should tell her the truth, going into it with honesty and kindness is always the way forward.

I wouldn't be upset if a friend offered me 50k.

I think it's an amazingly lovely thing to do. I am prob in friend's situ and to me it would also be life changing. Could you maybe offer to pay the deposit on a house so it's used for that specific purchase? Some new build houses have schemes where they double what a friend or family give..so you could give less but she'd have same towards a house.
I think it's a lovely thing to do..and I would do it for a friend if I could.

Can I be your friend 😂

Only if you die seven years or less after you’ve given it. After that it’s out of your estate. I have another 15 months before a gift I made is free and clear.

Nothing wrong with giving away money - except you will lose the friendship.

The dynamics change when one person must feel beholden to another - it builds resentment.

You be far better offering the money as a deposit on a house/flat - but whatever the percentage cost of the house it will be, that same percentage value of the house that will be inherited by your children when you and your husband both die, or in 20years, whichever date is last.

To give your friend a 20 year peace of mind.

You can then always leave your share of the property to your friend in your will.

Because you do care what she does with the money. You'd be very disappointed if she went on a 2-year massive holiday and came back poor as a church mouse. You want to give her security.

Thanks for clarifying my misunderstanding BlossomToes. I also understand that £3k is the limit which can be annually gifted without it affecting the value of one’s estate.

What an amazing life changing gift!

I don't understand all the comments about risking the friendship. If it's given in the right way making it absolutely clear that's it's a gift with zero strings or expectations and she can do whatever she pleases with the money, then why would it.

If someone gifted me £50k it would literally change my life in ways many people can't imagine. I would be forever grateful and it would not change a true friendship. Brits are really funny about money - it's out history (a whole other thread!).

Definitely get financial advice so as to minimise any potential negative impact on your friend, and to maximise what's she keeps and what goes to the tax man etc

What a wonderful thing you're doing.

i don’t understand the comments about this ruining the friendship! you’ve been lucky enough to get this and its wonderful that you’re thinking of your friend, for whom this can make a real difference. You do need to ensure you have no expectations on how the money is spent and that she’s clear there are no strings attached.

After that, just be honest. Explain that you’ve come into the money unexpectedly and set some aside for your nearest, would love to spread the joy and make sure people you care about are taken care of!

@Marven there's a really interesting discussion topic around 'what difference would a gift of £20,000 make to your life?'

For some people in great debt or managing on the breadline it may (sadly) make no difference at all. They may still be in debt (making little difference to day-to-day life). If they are on benefits, they may risk losing benefits until they've spent enough so that their savings reduce.

For some (like yourself) another £20K might just go in the bank. OK you might spend some on a something nice, but probably not anything you couldn't have bought anyway.

But for many - and it sounds like your friend is in this category - the gift you might make would be potentially life changing. It enable people to learn a new skill, start a business, own their own home...

I really hope you find a way to do this, and to do it in a way that preserves your friendship. You are a star.

What a lovely person you are. I don’t know why so many people are saying don’t do it,I don’t see why not. You know what you’re doing, sounds like your friend would be truly grateful. I wish I was your friend 🤣🤣

I’m afraid it’s you who’s wrong.

You do not pay tax on a cash gift, but you may have to pay tax on any income that the cash gift generates. For example, if you place the cash gift in a bank or building society account, you may have to pay tax on the interest you earn on that account.

Wrong. There’s an annual gift tax exemption of £3k, which is nothing to do with dying or inheritance. Income tax applies if £3k is esceeded.

Whilst I think it’s very generous of you I think she might be overwhelmed by it. I’d give £25k max and say it was a small percentage of a considerable windfall. I wouldn’t use the lotto story coz it’s a lie and lies get found out. Do u know if she has savings-maybe £25k on top of any savings she may be could be enough for a deposit?

If I was your friend I would be very grateful and it would change my life. I have a few friends who have done wonderful things for me and I will always love and appreciate them for it. I don’t know why people are being so negative!