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?

It's fine as long as the money comes from the mother's surplus income. It won't even be taken into account for inheritance tax. People are allowed to give someone a regular payment.
I regularly transfer money to my DD as does my DH it comes from our income not from a lump sum or invested wealth. It won't be taken into account for Inheritance tax.

why would you look down on me?

What laws is it breaking that my in laws pay for holidays, or that I paid the plumber £60 in cash when he popped over one evening last week to do me a favour? Or because My dh uncle takes out his own cash to give to his children and grandchildren because he wants to?

Give over will you. It must be fucking exhausting.

And for what it’s worth, while none of my family are destitute, none of them will meet the IHT threshold.

Here is the part which explains why it’s not fraud

And the reason we documented it all was also to be sure that my dad could actually afford to give us the money. He def could.

He also went to the bank to set up the standing orders to us, which was an added check I guess that he wasn’t being coerced.

If this sort of thing makes you anxious you could easily look it up, or get professional advice. Your Mum isn't going to get younger and she may end paying for care.

"So if I have £500k in a savings account when I’m elderly, and it’s all my own savings gathered over my working life I can only depend the interest and not dip into the capital?"

No, this is about giving gifts to other people. You can give as much as you like to other people as long as it comes out of your income and doesn't affect your normal standard of living.

So, for example, if you typically used to manage to save £10,000 per year from your salary/pension/dividend income whatever then, instead of saving that money, then you can gift that money to somebody else without any problem.

.

"If I’m retired and decide that I want to have smoked salmon and champagne for breakfast everyday, I can’t because I’ll be spending £150 a week in Waitrose and someone might say I’m trying to avoid inheritance tax?"

No, this is wrong. You can blow your entire wealth on smoked salmon and champagne if you wish (or anything else at all). That is fine, it is your money and you can spend it how you wish.

It is only if you wish to gift money or an actual physical gift to another person and your estate will be subject to IHT that you need to think about how you do it.

Deprivation of Assets, presumably. You don't get to just put assets in someone else's name (but continue to benefit from them) and then claim you can't pay for your own care in old age because you're broke. Same with giving away money you actually needed to live on and then claiming pension credits or whatever.

What a lovely mother!

I said low level tax fraud (not individuals) was the biggest contributor, and I said I assume others who are advocating lying to HMRC (Not the OP) are doing so when tax or public funds are at stake. Or why would you lie?

So I stand by everything on my original post.

As I understand it If it’s out of excess income then your mum ok to do this. I am doing something similar. I think the IR like you to provide some kind of record keeping so you can show this is the case. What a lovely mum you have.

Well you can stop looking down on me because as I said, none of my family, while comfortably off, will even meet the IHT threshold.

So you can spend your energy judging someone else.

Indeed. How would they prove that historically, on any given week, the OP's mother bought £300-worth of groceries but only personally consumed £150-worth? Maybe she's very wasteful and throws half her shopping away each week? Maybe she has very expensive tastes and lives off champagne, steak and caviar?

I'm not convinced that HMRC have the resources to comb through 7-years-worth of supermarket transactions and cross-reference those against consumption patterns to prove that an older personal with a somewhat modest estate was knowingly committing IHT fraud by overspending at Aldi.

or, she bought loads and contributed it to the 'food bank collection bin' in store
prove she didn't

"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."

The GC will only be liable to pay IHT if the total amount of those gifts (excluding gifts from regular income) is in excess of £325,000. They would then be primarily responsible for paying IHT on any amount above £325,000.

Otherwise, if the total value of these "largish" amounts is less than £325k then it means that the nil-rate band for the estate is reduced by the amount of the gifts and there is more IHT to pay on the remaining estate.

Of course they couldn’t. People talk so much shit on these threads. Talk about living in fear of the bogeyman.

And most people wouldn’t come near the IHT threshold anyway.

I’m confused - you said you were part of problem when I talked about people lying to HMRC. Why would you lie about your PILs holidays or your uncles cash with no motive to… ?! I don’t look down on that, I just think it’s weird behaviour!

Absolutely.
Paying for car insurance, health insurance, holidays are all completely normal things to do for your children when you are cash rich.
Withdrawing cash every week and physically giving it to them too.
Why wouldn't she?

It’s not fraudulent 🙈

"...and then £150,000 if there is a property left."

That figure increased to £175,000 back in 2020

Some people I know are doing exactly that - so that the government won't get 'shit-all' as they say. One person I know who worked like a dog (no university degree) all her life, small laundrette first, then a sandwich shop, etc. bought an obscene, and I mean, obscene amount of historical jewellery with provenance (bad investment, I know) just to divest.

This x 100!

With inheritance tax, many people are in the situation my mum is in.

my dad died. House transferred to her sole name (was both) and his estate was about 50k.

any unused exemption allowance transfers to the spouse.

so my mum has IHT allowances-

nil rate her 325k
nil rate primary residence 175

plus she can also use dad’s allowances of
nil rate primary residence 175
nil rate 275k (his death used up 50k)

so in practice she has an IHT exemption rate of just under a million pounds - strictly 950k.

so for many people IHT exemptions (regular income, gift allowance etc) just are not relevant as the estate is not going to hit the million pound boundary anyway.

my mum is now happily paying for holidays, my nieces braces etc having before been very worried about how much she was “allowed” to gift

Correct if this spending were coming from the OP's mum's SURPLUS income rather than savings etc, but she didn't actually say that this was the case.

Because people are fucking weird about money and taxes.

I am all for people getting rid of money in anyway they can to avoid IHT.

They don’t like anyone being up on the game. There’s enough daft comments on this thread about it all.

Also - maybe you need a lay down? You’ve gone from getting uppity and superior to now confused - have a day off will you 🤣

The only issue possibly from my experience would be if you have a sibling who would also be a beneficiary of her estate when the time comes. They may question why she spent so much money in her later years.

But frankly, she can do what she likes with her money and spend it as she sees fit.