Elderly parent wants to give large amount of money to me - I have refused !

Accept it

Invest it

If possible don’t spend it for now, in case parent needs it for care or in case of IHT - but can spend any proceeds from investing it, ie interest/dividends.

Maybe they are trying to avoid Inheritance Tax
it is my understanding that cash gifts before a certain date prior to death are not considered under IHT rules you should look into “deprivation of assets

Does annoy me when people post a question

many reply with helpful advice

and op doesn’t come back

This.

Deprivation of assets for car costs, be aware.

Inheritance tax, needs declaration if death in less than 7 years

Accept. They want to see you spend it while they're here.

But would you not have to be over the IHT limit ?

As far as I understand, the seven year rule does not apply to local authorities assessing care home costs. They can go back further than 7 years. I think the 7 year cut off applies to inheritance tax, not care home costs? But either way, you’re highly likely to get a huge tax bill and be hit with care charges.

Talk to the parent about what their thinking is here. Is it an attempt to avoid IHT / care fees (perhaps based on misapprehensions about how those things work)? What is their plan for the future, if they need care? Will the money still be there even after what they want to give you? Make sure they understand the Deprivation of Assets thing.

It's hard to give advice without any idea at all of the amounts involved or the parent's circumstances. I mean, if they're trying to give you £100k out of a fortune of millions, take it; if they want to give £20k and that's all they have in the world, don't.

Are there siblings or other potential heirs?

Money given on a regular basis out of income is not subject to IHT.
This is in addition to the £3000 a year.
So if @ByQuaintAzureWasp has £400 a month spare after all her outgoings she can give it to her DC free of risk of IHT.

Of course it's not necessarily deprivation. That only applies in any case if a person needs funding for care. There's an implication on MN that people are not allowed to give money away. It's just not true, just that there may be negative implications in some cases.

We don't know how much she plans to give and what she has left and the giver is 90.
A significant amount to some people might be £1000 where to others it's over 6 figures. The giver may know she has not got long left.

@ByQuaintAzureWasp It’s £3000 pa to reduce IHT. Not £400 a month. If it was IHT you were thinking of.

If you don't need it still take it and put it in a savings/ISA.

If you do end up having to pay IHT then you'll be no worse off either way

Just as an aside; if you’re not paying NI then do. If you’re not claiming benefits and not being paid from employment you’ll be missing out on your credits.

Just my opinion - please don’t take offence but I certainly wouldn’t have rejected their generosity out of hand. If only because you are depriving them of actually seeing whilst they are alive that their money is benefitting you. Bearing in mind they are both in their 90’s there won’t be many more years available to them for this.
There may of course be a huge family backstory and reasons why you don’t want their money but don’t cut your nose off to spite your face.
There is so much you haven’t said - Do they have wills? Do they own property?. Do they have so much money that there will be plenty left to fund their care needs? Do you have siblings. Are there any grandchildren?
I know there are legal implications when money is given away but don’t know what they are so my advice would be accept what you legally can for now and urge them to take urgent legal advice. If they are anything like my (younger) parents they might need persuading to do this but it will end up being money well spent and may be save you a lot of hassle in the future if you are their only dependent.

I would accept it, but not spend it. Keep it separate in a savings account and be prepared to use it on their behalf for care fees etc, or (probably) eventually pay tax on it. I would keep strict records of everything.

The reasons I would accept it are:

1. Makes the parent feel happier
2. Parent may lose capacity for looking after their own affairs and financial decisionmaking. Obviously the way to deal with that is by setting up a power of attorney (if not already done). But it also wouldn't hurt to have some money in your name which they can't give away to the postman if they get a bit confused, and which you could use for their benefit if necessary.

Absolutely and the seven year clock ticks and you never know….

Yes I know, I said that in my post - “if the money runs out”. Which it could very well do? given the huge amounts self-funders pay. Best to put the money in savings accounts and make money from it for as long as possible.

Which is why I put “if they don’t need the money” , ie if care is covered by the remaining estate.

I do actually know what I’m talking about….

I happen to work in this field.

They’ll ignore it, if it’s not needed, if lots of money is available and covers the care.

The issue comes if the money runs out.

How could it not be deprivation of assets? The donor is in her 90s and if she does have to go into a home if the money runs out, the LA will go through every aspect of the donor’s financial and medical history. They will quickly see the £100K transaction and ascertain who it’s been gifted for. Do you really think they would ignore it?

The inheritance tax staggers down each year. So even if they don’t live 7 years to be tax exempt you are still better off every year that you hold the money.

They would rather their money go to you than the taxman. It will buy them more happiness knowing the money stays with family, than it going to the state. Let them

As per a PP - putting asides any legal/tax etc implications...

Refusing a gift like this can be pretty upsetting for the giver, if their intentions are genuinely to assist in probably the only way they can now (and not to use to manipulate and control you as sadly some parents would).

If you're certain they have the money to gift, and are clear in their intentions, and you can put it into a savings account - then let them gift it.

It is horrible feeling as if there is nothing you can do to help the people you love, no matter what the reason for that. So accepting this gift may give them peace of mind that you're secure.

I would suggest saying yes but that you want to do it with proper legal and financial advice.
There are implications on large gifts - there is a list of what is OK and we are talking a few thousand or even hundred pounds etc depending on the circumstance not massive amounts. It may be seen of deprivation of assets if care home needed but at 90 you can say preparing for 10 yrs (ie holding back enough to cover that) would mean there was no issue
IHT may be payable on the amount but that is always down to the estate, only if the estate doesn't have those funds would they go to OP - which may cause issues with other people who might inherit etc.
There could be higher limits for IHT depending on if allowances were passed over from a husband/wife, what the money is in the form of e.g. cash, shares, housing etc

It sounds to me like they need to speak to a solicitor 1. to make sure will in place (and maybe power of attorney) and 2. To understand her/his personal tax circumstances and what would be the best way to manage this.

OP I know a lot of people have jumped in to comment about inheritance tax (with all the usual inaccuracies), but is that actually your question?

FYI they can’t force money on you. If you don’t want it, and they still transfer funds, you can ask your bank to return it.

However, as others have pointed out, a gift is as much for the giver as it is for the recipient. Could you not consider just accepting in good grace to give them joy?

It’s not necessarily deprivation. We do t k ow how much the relative wants to give or how much they would have left. Key detail.