Is my mum allowed to pay for my weekly food shop?

[Smilingpeacock]

Hi,

my elderly mum has become obsessed with ‘off loading money ‘ before the government takes it. She gifts me 3k year etc, to be clear I don’t expect or need anything I am very grateful.

She now wants to start paying for my weekly food shop which is about £150 per week. We go shopping together every week and the plan from next week is for her to just pay both hers and mine shopping at the checkout. She seems to think that nobody will ever question this??

i’m always anxious about breaking the rules when it comes to. Money. Is her plan flawed?

Not if she is using excess income. Perfectly legit, but proving that may become more difficult.

Will you DM even have an IHT issue? Will this matter?

Who would question how she spends her money?!
Unless it’s a benefits thing? Is it? What “rules” are you referring to?

Let her do it. As we get older we need less things around us. It makes her feel needed and wanted. If she's ever in trouble you have the money she gave you to help out.
I'm 70 next birthday, my kids earn 4x what I did in my life but I still like to pay my way. Its feeling needed.
Just put tge 3k away and it's there if she needs it.
She's also not wrong about unloading. This government would have the last drop of blood from her veins if they could.

She’s buying groceries and giving them to you.

No one will ever know.

No she doesn’t receive any benefits. She has just ended up in a position where she a fair bit of cash

Exactly. Anyone could think you were doing her shopping, for example. Or that you all live under the same roof.

Her total estate is about 500k

As long as she can afford to do so without impacting her way of life there will be no IHT issue.

Regular gifts have no limit as long as it’s out of income

Of course she can do this, not sure who you think would question it.
My mum is similar and wants to do it. After all, you can’t take it with you.

Ok, so there are a couple of situations where this might be an issue:

one she’s on benefits and has received an inheritance or other lump sum that will take her off benefits and she may have to go back on them in future

two she expects to pay inheritance tax and if she dies then transfers of money to other people within seven years of death will be looked at.
(eg if she gave you money to buy a house and then died but her estate was subject to IHT then the gift might also be).

if not on benefits/no IHT expected it is fine

It’s fine it surplus income and how lovely!

Yes of course.

Do not have it put into your account on a regular basis though as that does look fishy.

I think it’s a great idea.

Exemptions are:

nil rate band to 325k
an additional 175k nil rate if the main residence is inherited by children/grandchildren etc.

so if she lives in her own home which is due to be willed to kids/hrandkids it’s 500k.

in addition if she was/is married spousal allowances can transfer.

Do you receive any means tested benefits OP? That's actually the more important question. If not, I can't see any issues at all. If you do, gifts are allowed but this sounds like a regular level of additional support and you may need to consider it if you are for example claiming UC.

It’s her money and she’s paying for groceries.

In would put the equivalent amount into savings (minus maybe £100 a month for fun stuff) so you build up for your retirement.

As long as it’s income she’s spending rather than savings it’s fine - she can spend that how she likes.

The issue with IHT beyond the annual gift allowed is that it’s hard to prove she didn’t partake in deprivation of assets. But that’s when you spend savings required for care in later life on giving it away (cash gifts)

Im not legal but this is my understanding from what’s been explained to me. That’s basically savings and income differ in their definition.

Regular gifts made from surplus income can be immediately exempt from UK Inheritance Tax, with no financial limit and no seven-year waiting period.
To qualify, the gifts must:

• Form part of a regular pattern, such as monthly or annual payments.
• Be paid from after-tax income, not savings or other capital.
• Leave the giver with enough income to maintain their normal standard of living without using savings.

Good records are essential. Keep an annual spreadsheet showing income, normal living expenses and gifts, supported by bank statements and other evidence, as HMRC may examine this after the giver’s death.

You can read up on HMRC so maybe just keep a spreadsheet for your own protection.

Without getting into IHT, benefits etc etc, how would anyone in authority know? If you’re shopping at the same time and she’s just adding your groceries on to hers why would it ever come to light?
Even if, and it’s a big IF, someone looked into it, examined her bank accounts and saw £150 spent every week at Tesco you could just say she liked buying lots of food or she bought expensive wine or donated extra food to charity or the next door neighbour or whatever.

Long as nobody finds out it's fine! She's paid her taxes throughout her life why should she be taxed yet again when she passes? I'd take the offer.

Deprivation of assets is a paying for care thing not an IHT thing.

so in the situation where an elderly person requires care in a care home if they do not have any assets (money, house, etc) the local authority (the council) have to pay for the care.

people have tried to get around this by for example the elderly person giving vast amounts of money to their children and then claiming to have no money and so the council must pay for their care.

so these days if you ask the council to pay for an elderly persons care the council will check into their financial affairs to see if they have given lots of money away (the giving it away is known as deprivation of assets).

if the council find the elderly person has for example given their daughter a million quid then they say that actually this money really belongs to the elderly person and should be used to pay for care.

this is unlikely to be a problem if your mum has assets of around 500k and is paying your food shopping each week.

Her estate likely isn’t big enough to be liable for inheritance tax - and definitely won’t be if some of the value is from a house that she jointly owned with a now deceased husband.
Accordingly she can do what she likes with her money without incurring future tax payments for her estate.

if her estate was larger and caught by IHT threshold she could make regular gifts out of surplus income which wouldn’t be caught. But as others have said it needs to not reduce capital. My parents in law transfer us money every month by DDand keep meticulous records to show it’s not affectiNg their standard of living and is coming out of surplus income.

Exactly this if questioned just say she was a avid food bank donator.

As PP have said, because this is out of surplus income & doesn't impact her quality of life, it won't count for IHT purposes.

But even so, there's no way this would/could ever be investigated or traced - how would anyone ever be able to prove where her supermarket shop went once she left the store and how much of it she consumed?

Good on her. Enjoy!

Did she have a husband who died? Your dad?

This is not an IHT issue so not sure why so many are commenting on that.

It is unlikely to be deprivation of assets for care home fees as it would be regular spending out of income.

The only impact would be if you are claiming benefits as it could be taken into account in your own assessments. However, if she is just adding stuff for you to her own shopping, nobody is ever going to know.