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?

Great idea, the records do have to be detailed as your fil is doing.
If your fil still has money left in his estate when he dies then that will pay the IHT not your daughter so whilst it's great your daughter is keeping money aside then unless he suddenly uses up all of his income in care fees then it shouldn't be a problem.

@SmilingpeacockIf your mum isn’t on benefits, then there’s no rule against her paying for your food shop, it’s not taxable and it’s not monitored.

The only time this becomes an issue is if she later needs means‑tested social care. Regular payments could be viewed as “deprivation of assets” if the council thinks she was giving money away to avoid paying for her own care. It’s not illegal, but it can affect future care funding.

If she’s currently well and not close to needing care, the risk is low, but it might be worth gently explaining that the government doesn’t “take” people’s money unless they need help paying for care, and giving money away to avoid that can backfire. You’re not breaking any rules by accepting help, but it’s sensible to be aware of how it could be interpreted later.

The only other issue I can think of is family perception. If there are other siblings, regular payments can later be twisted into “financial abuse” or “influencing mum” even when everything was above board. They may claim later inheritance should be adjusted to take into account what you have already had.

Legally, your mum can pay for your shopping, there’s no rule against it. The risk isn’t HMRC, it’s future arguments if she needs care or when her estate is handled.

If you do go ahead, keep everything transparent and ideally documented so nobody can rewrite history later.

Spot on. My dad said to tell HMRC that he had developed a problem with gambling and prostitutes all paid in cash in his late 80s and 90s 😂

This all just reminds me of a batshit conversation within our family.

We are incredibly fortunate that PIL pay for a lovely holiday in Cornwall for us each year (I grew up there so like togo back to visit friends).

They have built up savings and they splash out on lovely cottages in lovely seaside towns for us. This year they paid 2.5k for us to stay there for two weeks and gave dh 1k cash for spends. We are so, so grateful to them.

They have offered the same for SIL. Anywhere she wants to go.

She says no as she paranoid that someone will one day find out that they paid for her holidays, for a lot of the reasons people have said on here.

It’s mental. PIL spend thousands a year on their own holidays. This is just another in a long line they are paying for. Prove they didn’t join us on it.

SIL honestly thinks that one day, someone is going to trawl through them all and want concrete proof that PIL went on all the holidays they paid for.

FIL doctored some images of himself on the beach this time and sent them to her for a laugh, she didn’t speak to him for days 🤣

It’s like she thinks they will get Columbo on the case to investigate every holiday they have ever paid for and she will get caught out that her mum didn’t come on to a long weekend in London with her in 2022, because her bank card was used at a corner shop in Birmingham on the same weekend.

I love the out and out encouragement of illegal tax fraud here ("prove it's not for a drug habit", "she was giving it to food banks" and "she's taken up binge eating").

It's right no one will ever find/question/prove otherwise - but can you all please accept that YOU are the biggest part of the reason public services are underfunded. UHNW individuals and businesses pay the vast majority of the tax due. Low level tax fraud like this makes up, by far, the biggest part of the tax gap. If you ever blame others for not paying enough tax but take this stance yourself, you're a hypocrite.

(It's also unlikely to be a tax issue in this specific circumstance, but I assume all the people saying they would do or have family members doing this mean they would do it when tax or public funds are in fact at stake).

Also you can give money from your monthly income, without it counting for IHT but it must not be from savings

It's £175k if there's a property so £500k in total but if she's been married and her husband left his money to her then it can be up to £1m tax free so she may never have to worry about IHT anyway. My dads estate as it stands just now is about £700k including the house so he has my mum's tax free allowance from when she died 4 years ago. He could give away more but he's 94 and although he understands and says he should give money away he just doesn't do it and I'm not going to ask him. He could still need some care in the future too.

Show how this is tax fraud
show that low level tax fraud is the biggest gap

We did this. But because we were wary, we did a spreadsheet of my dad’s monthly income and expenditure. He then drafted a letter saying he was happy to give me and my brother X pounds each month out of his regular income. We just wanted to be careful.

But you still couldn’t prove that didn’t happen.

But it is perfectly legal to spend money on your DCs like this so even if they do discover a large increase in spending, providing the income covers it, there is no point to the exercise! No IHT will be due on it.

My XH pays for cars, furniture and holidays for the kids and their families. Nobody ever questions anything.

Yeah, I couldn’t give a shit. I don’t care if I’m the problem. I prefer to pay tradesmen in cash too. Have me up against the wall now, eh?

The biggest contributor to the tax gap by FAR is small business (https://www.gov.uk/government/statistics/measuring-tax-gaps/1-tax-gaps-summary#tax-gap-by-customer-group). I accept that individuals (where this would fall) is a small part. But small business would be definition be low level tax fraud, on account of they are small businesses so don't have huge amounts of income/tax at stake.

Tax fraud is defined by HMRC as any deliberate omission, concealment or misinterpretation of information, or the false or deceptive presentation of information or circumstances in order to gain a tax advantage.

Source - https://www.gov.uk/government/publications/hmrc-issue-briefing-hmrcs-approach-to-tax-fraud/hmrcs-approach-to-tax-fraud

The positions mentioned above clearly involve the concealment and/or misinterpretation of information and/or false or deceptive presentation to gain a tax advantage.

That's fine if you own it. I presume burglars know they're doing wrong and breaking the social contract too, and are entirely at peace with their behaviour.

I'm perfectly entitled to look down on you for it though, same as I do on a burglar!

Why wouldn't she be allowed to do it? I don't understand what rules she might be breaking?

Regular gifts out of excess income are exempt from IHT, she should document it though. With a £500k estate she may well be on the cusp of being over IHT threshold unless she also inherited her husbands IHT allowance.
what she is doing is trying to minimise any IHT you may have to pay.
i intend doing similar myself

Apart from IHT, there's the question of voluntary deprivation of assets when it comes to care fees. I don't know if paying an extra few hundred a month would count as that. If you're worried, perhaps you could agree on her paying for one or two shops a month rather than all of them.

You drive her shopping, spend time helping her shop and I assume take her home.
if she paid for a taxi to do this, would be from her money. Ditto if paid for a housekeeper to do her shopping.

I’d be careful with this, especially if the aim is to reduce her assets. It’s worth checking the rules before she starts paying for your shopping.

Edit - sorry this was intended as, a reply to SleeplessRoads but for some reason appeared as a standalone post.

So you think it's fine and dandy that my parents' money that they earned running a business involving 12 hour days for many years and which they only retired from in their early 80s deserved to be taxed at 80%? This would be the higher 40% rate they paid in income tax plus another 40% inheritance tax once they died?

In my mum's last couple of years she was paying 114 k a year in care home fees and, STILL paying thousands in income tax.

Also this is not about "tax fraud" it is about the outrage of the government having a say in how you spend your hard earned money in your later years without being clobbered with yet more tax.

Incidentally my parents' estates still attracted a huge amount of IHT as they didn't start spending soon enough

This country actively punishes people who work hard and are careful with their money.

Don't you think it's mad that someone has worked all their life and wants to buy their daughter some groceries and you're blaming them for the downfall in society? If families supported each other in this way there would be less need for dependence on the state. This woman's entire estate is less than 500k most of which will be her home, she's not Elon Musk

So this is small business you’re talking about

where as this is individual people in this case, it’s not even fraud

https://www.gov.uk/inheritance-tax/gifts

@Wellwellwellwhatsallthisthen the very well resourced HMRC IHT team use AI to scour the deceased’s bank accounts going back seven years and investigate any and all payments that could have been used for anything other than for their own direct purpose.

paying for groceries is quite clever if it’s eg paying directly for an Ocado delivery rather than transfers to someone’s bank account

Here’s the rules

HMRC allows you to make regular gifts from your surplus income completely free of Inheritance Tax (IHT), with no upper limit on the amount. 1, 2]
The Three Golden Rules
To qualify for the "normal expenditure out of income" exemption under Section 21 of the Inheritance Tax Act 1984, your gifts must satisfy three conditions: 1]
Made from income: The money must come from your regular after-tax income (such as a pension, salary, rental income, or dividends), not from accumulated savings or capital. 1, 2, 3]
Part of normal expenditure: There must be a clear, regular pattern of gifting (e.g., monthly, quarterly, or yearly). One-off gifts generally do not qualify, though the first gift in an intended series can count if intent is proven. 1]
Leaves sufficient income: After making the gift, your remaining income must be enough to maintain your usual standard of living without needing to dip into capital. 1, 2]