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?

You are quite wrong. HMRC pick random IHT cases to go through with a fine tooth comb. Any sudden large increase in spending - and £600 a month is a very large increase would trigger further investigation if noticed. The chances are it would be fine as only certain cases ever get the forensic treatment but it is definitely not impossible.

Love this.

My grandad would give us fairly substantial 'pocket money' every week even though we were all adults 😂

I doubt anyone will be asking for receipts from a weekly transaction at a supermarket.

Not at all, buy lovely food. However, in my experience of a Home Counties LA they are looking for any excuse not to contribute to care. An example from our own family, a relative in their nineties who had never claimed benefits, needed help with care once her savings had been depleted. This claim was delayed for about six weeks while they investigated a very small one off payment from the previous year, it was insurance for a mobility scooter. When she died she didn’t even have enough to pay for her funeral in her accounts and the claim for NHS continuing care was halted because she died!

Okay, “mum got obsessed with bake off in her final years and would spend huge amounts of of money each week in Sainsbury’s recreating recipes. She was a shit cook, so everything went in the bin and she had to restock every week.”

Prove that didn’t happen, HMRC.

Fine to be generous and buy things, the issue would be if she needs care and needs local authority financial assistance, there’s no maximum time they look back either. They really aren’t doing investigations over a few thousand pounds

As long as the money she is gifting comes from "excess income" and not savings.

Of course she's allowed, and that's actually a good way for her to distribute some of her money before the tax man gets his grubby little mitts on it!

It's actually a good idea, because although someone might notice the increase in spending, there's zero proof she's not just suddenly developed a massive appetite! They can't prove what she's doing with the food once she leaves the store.

I'd just make sure it all goes through as one transaction, rather than 2.

What rules or laws do you think are being broken?

Exactly and this is extremely mild by some people’s standards. Most older people who have an IHT bill coming when they die would be looking at things like this plus paying for their children’s holidays etc. The taxman won’t know who the things are for.

From HMRCs website;

If you make regular payments
You can make regular payments to another person, for example to help with their living costs. There’s no limit to how much you can give tax free, as long as:

• you can afford the payments after meeting your usual living costs
• you pay from your regular monthly income

These are known as ‘normal expenditure out of income’. They can include:

• paying rent for your child
• paying into a savings account for a child under 18
• giving financial support to an elderly relative

www.gov.uk/inheritance-tax/gifts

Who would question what she spends her money on? She can do as she pleases with it.

You’re allowed to pass on surplus income. My FIL is now doing this and passing it on to his adult grandchildren. An account has been set up in their names and every month he pays in his and MIL’s excess income. When it reaches a certain amount my DD (who administers it all because she’s financially savvy and the most trusted GC when it comes to these things!) divides it between the four GC.

FIL keeps meticulous records though because he’s v concerned to prove that the money is indeed excess income. I’m pretty certain that it will never be questioned but if it is it’s all documented.

He has also gifted them a largish amount each but that will be subject to tax if he dies in the next seven years so DD has put the tax aside from the lump sum in case they have to pay it.

If she takes £50 cashback every time she buys something then it can’t be traced? Morally wrong obviously but seems doable?

Rather than just throwing round insults, why not explain the issue.

I said excess income, perfectly legit. Is that wrong?

Worth a try 😂

As I said it's highly unlikely the OP's mum's estate would ever be selected for major scrutiny but there is always an outside chance and HMRC can be absolute bastards when it comes to IHT.

How lovely, what a great gift. Nice you shopping go together.
She'll be stacking up her reward points 💗

This is more a potential gifting issue in regards to the 7 year IHT rule.

Nothing to stop her doing this- my Mum does this too.
The accountant says think of anything that she spends rather than us being a 40% discount.
She will definitely attract IHT on her estate and if she needs care will be able to pay for it, she’ll never need the state. She also makes regular gifts out of excess income to us which I am saving for DS uni fees.

Better to spend her money on the family so she can see where its used and appreciated. Rather than having it extorted from her by a corrupt system which spends it on bloody Ukraine and asylum seekers.

So you get an allowing inheritance of £325,000 and then £150,000 if there is a property left.

so £475k will be inheritance tax free as the rules presently stand

then on the remaining £25k it’s a 40% tax

so you’re looking at a £10,000 tax bill on £500,000 inheritance

It’s awful how some OAPs get addicted to scratch cards and bingo isn’t it…especially if they’ve withdrawn £100 a week in cash to buy the scratch cards…

My mother who lives alone is the equivalent of a food hoarder. She spends almost £300 a week on food. Over £1000 per month. We've tried to stop her. We go to her flat weekly and throw away old mouldy food. She can't possibly eat what she buys but she won't stop.

If you saw her bank statements you'd probably query the amount spent at the supermarket and the butcher but it's all legitimate food. The waste is heartbreaking.

I don't understand why you are worried then, who on earth would be monitoring her spending

Of course she can spend money as she wishes but to not potentially fall foul of the 7 year IHT rule (that she's trying to avoid) any gifting has to be from "surplus income" ie not savings. This is frankly an outrageous overstep by the government imo, but I don't make the rules!

I was appalled when I discovered all of this in relation to my parents' estates.