Can ex mil give ds this amount of money?

yeesh · 31/01/2025 23:41

she can do what she likes with her own money

KilkennyCats · 31/01/2025 23:44

Why do you think she could be legally prevented from spending her own money as she wishes?
Don’t jump the gun, though, she hadn’t even mentioned a sum yet.
Strange thread.

Moveoverdarlin · 31/01/2025 23:45

Of course it’s legally possible! Granny helps grandson out with uni fees. This is not an unusual scenario.

Batshit1234 · 31/01/2025 23:46

Of course she can! She can gift up to £3,000 per tax year without incurring inheritance tax. She can also make gifts of any amount as long as she survives for seven years after making the gift. Look after that lady. Think this is lovely. There are no pockets in shrouds!

WearyAuldWumman · 31/01/2025 23:47

Moveoverdarlin · 31/01/2025 23:45

Of course it’s legally possible! Granny helps grandson out with uni fees. This is not an unusual scenario.

I'm wondering whether she's worried that Granny might be accused of divesting herself of her savings if she ever needs care.

crumblingschools · 31/01/2025 23:48

I was wondering whether there was concern of deprivation of assets

Original poster

Liesmorelies · 31/01/2025 23:48

I thought there was some law to do with care that means you can't give away significant sums towards the likely end of life? I know it's jumping the gun but ex seems to have given the ds the impression it will be a very significant amount, to the extent that he mentioned sharing it.

OP posts:

PivotPivotmakingmargaritas · 31/01/2025 23:51

lol talk about pulling the cart before the horse… you have no idea how much she is going to give him… if she is frugal it might be £10 a month 🤣🤣🤣

Just wait or get DS to ask politely and then plan from there.

Get him to say Nan may I ask how much you are planning to send me so I can create an accurate budget/ work out how many days I need to work

Passthecake30 · 31/01/2025 23:51

I believe if she needed to go into care and didn’t have the funds that her previous transactions could be looked into. Also if she doesn’t live for 7 years after the gift it could be treated as taxable for IHT purposes.

JimHalpertsWife · 31/01/2025 23:51

If she makes a reasonable monthly payment to her grandson for his living costs then why would that be seen as getting rid of her assets? It's just a typical monthly payment, much like a grocery bill or a rental payment.

Original poster

Liesmorelies · 31/01/2025 23:57

Yes, if it's a tenner a month this will have been an irrelevant thread! But ds specifically said she had mentioned wanting to prevent him taking the loan, implying the fees.

Someone upthread said only £3k per year can be gifted, which is nowhere near enough if that is what she meant.

OP posts:

Seagullsandclouds · 01/02/2025 00:01

I think you might be confusing a few things. Yes she can legally give away her money. No one will come after her and arrest her.

If she dies within 7 years there might be tax implications to her estate. She won’t care about that because she would be dead.

If she needed care, and couldn’t afford it such that it had to be paid by the local authority, then there is a possibility they could try to recover the money from your son. However for this to happen they would need to argue that she reasonably knew she was about to need care, and that avoiding care charges was a significant factor in her giving the money away. In this situation the “factor” in her giving the money away is her grandchild’s education, not avoiding care charges.

JimHalpertsWife · 01/02/2025 00:02

Can I ask why you are concerned? Your ds wouldn't be asked to pay anything back. Any IHT issues would be settled from her estate. And she's your exes mum.

Just put it out of your mind, advise ds not to actually bank on any funds, and if she does gift him £ then that's her call.

dumpydumpydumpdump · 01/02/2025 00:05

She can absolutely do this. If she is comfortably off she will still have significant funds to pay for any care she may need.

KnickerFolder · 01/02/2025 00:14

I think you mean the deprivation of assets rules. If your MIL was unable to pay for her care, the local authority could investigate and try to recover the money she gave away if they believe she deliberately gave the money away to reduce her liability to pay care costs. They would look at 2 things. Did she have a reasonable expectation that she would need care at the time she gave the money away eg a diagnosis or failing health. Just being old isn’t a reason to anticipate she will need care in the future. They will also need to show that she gave the money away with the intention of avoiding paying care costs in the future. She should get professional advice.

BreadInCaptivity · 01/02/2025 00:16

Liesmorelies · 31/01/2025 23:48

I thought there was some law to do with care that means you can't give away significant sums towards the likely end of life? I know it's jumping the gun but ex seems to have given the ds the impression it will be a very significant amount, to the extent that he mentioned sharing it.

You are thinking about deprivation of assets.

People also often confuse this with inheritance and general tax legislation.

In terms of the latter you can gift £3k per year without tax repercussions and larger sums that would not attract inheritance tax after 7 years of the gift.

Deprivation of assets is different and does not have a time limit such as the 7 year rule.

It's a somewhat complex area.

If your MIL needed LA funded care in the future as she could not self fund, then if she has given money away in the reasonable knowledge she may need future care provision the the LA can press for the money to be given back under deprivation of assets.

However the onus is on the LA to prove that the primary purpose of the gift was to avoid paying for care or that the gift was unreasonable as the likelihood of needing to fund care now or in the future should have been considered.

As an example, if your MIL had assets of £500k (including property) and gave your son £9k that would be unlikely to be considered DOA - but better she gave him 3k per year re: tax gifting. Essentially whilst it's a reasonable sum, in terms of overall wealth there is lots in the pot left for future care needs.

On the other hand let's say MIL is in social housing, is reliant on state pension and has £50k savings the giving £9k would very likely to be considered DOA.

Age is also a factor. Giving large sums at 60 and in good health is very different than at 80 even in good health simply because it's increasingly likely you will need some form of care/support.

Finally you need to consider "the plan" - some families are in a position they will not ever fund care because they intend to provide it themselves (via multi generational living for example). But this is risky because as capable as some people think they would be at providing elderly care, the reality of it can be very different, especially (and sadly) if conditions like dementia result in extreme challenging behaviours.

Upshot is that you need a lot more information about your MIL's finances (or rather she does) before any substantial gift (in comparison to her overall wealth) is made/ accepted.

Original poster

Liesmorelies · 01/02/2025 00:28

Thank you for these detailed replies. I had some vague idea about this but it makes more sense now. Regarding the 3k per year gift, what would happen if she just paid the fees directly? Would ds/me have to pay tax on that as a gift?

OP posts:

NotaCoolMum · 01/02/2025 00:30

Liesmorelies · 31/01/2025 23:37

My ds will be going to university in September. Apparently ex's dm has said she will be giving him some money to prevent him getting into debt. At the moment we have no idea how much she means. She had a professional job and has lived a fairly frugal life and I know is very comfortable but I have no idea, obviously, how much she could give.

She is in her late 80s and owns her own home. If she did have the money and wanted to pay his fees and living costs, would this be legally possible? I have another ds 2 years younger also very likely to go university so presumably she would want to treat them equally according to what she could afford. Ds1 has said he will split it 50/50 with his brother if this isn't mentioned.

But can she give away such large sums at her age?

Huh?

NotaCoolMum · 01/02/2025 00:32

KnickerFolder · 01/02/2025 00:14

I think you mean the deprivation of assets rules. If your MIL was unable to pay for her care, the local authority could investigate and try to recover the money she gave away if they believe she deliberately gave the money away to reduce her liability to pay care costs. They would look at 2 things. Did she have a reasonable expectation that she would need care at the time she gave the money away eg a diagnosis or failing health. Just being old isn’t a reason to anticipate she will need care in the future. They will also need to show that she gave the money away with the intention of avoiding paying care costs in the future. She should get professional advice.

Thank you for this! Wasn’t sure by what op meant about it being legal 👍🏼

Negroany · 01/02/2025 00:34

Liesmorelies · 01/02/2025 00:28

Thank you for these detailed replies. I had some vague idea about this but it makes more sense now. Regarding the 3k per year gift, what would happen if she just paid the fees directly? Would ds/me have to pay tax on that as a gift?

There's no tax on gifts. Ever. Any sum.

NoBinturongsHereMate · 01/02/2025 00:41

Liesmorelies · 01/02/2025 00:28

Thank you for these detailed replies. I had some vague idea about this but it makes more sense now. Regarding the 3k per year gift, what would happen if she just paid the fees directly? Would ds/me have to pay tax on that as a gift?

No. The tax point relates only to inheritance tax if she dies within 7 years of the gift. If this is due, it is paid by the estate of the deceased donor - not the recipient.

Otherwise there is no tax to pay by anyone.

NoBinturongsHereMate · 01/02/2025 00:43

And the 3k gift allowance is for gifts from savings. Gifts from excess income don't attract inheritance tax, regardless of amount.

BreadInCaptivity · 01/02/2025 00:44

Liesmorelies · 01/02/2025 00:28

Thank you for these detailed replies. I had some vague idea about this but it makes more sense now. Regarding the 3k per year gift, what would happen if she just paid the fees directly? Would ds/me have to pay tax on that as a gift?

No it makes no difference if she paid the uni direct or gave the money to your DS to pay.

It's still a gift to him iyswim.

Also my DS had to pay the uni fees himself (from his bank account) there was no option for us to pay it for him from ours.

BreadInCaptivity · 01/02/2025 00:47

Sorry just to add as a pp said re: inheritance tax the estate would pay it not your son.

DOA is different and the gift recipient (if DOA is proven) will have to pay it back to the LA.

BreadInCaptivity · 01/02/2025 01:04

Another consideration re: DOA is the likelihood of the LA acting on it.

As I posted it's a grey area.

If your MIL gave £20k to your DS even if she had relatively little assets the cost of proving DOA (and the onus is on the LA to do this) is unlikely to be worth it.

Where they do get very tough is where people transfer significant assets, such as their home or the majority of £££ savings just as they become frail/start to need care/hit their twilight years.

But as LA's come under increasing financial pressure then it's fair to say the threshold of what they consider worth "proving" over DOA is getting lower.

In a nutshell your MIL needs some good professional advice about her financial affairs and any gifting she wants to do.

It's impossible to say more without knowing her specific financial circumstances.

Can ex mil give ds this amount of money?

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