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?

She needs to keep records, just a list is enough, to show when she makes a gift, who to and the amount to make it clear she is making regular gifts. They do not need to be the same amount or at regular intervals. This money can come from savings, investments, interest or income as long as she still has enough to cover all her needs.

I’m not sure though how such things are investigated but I think the gifts might need to be declared on the probate form.

I make regular gifts to my children as I have enough money for my own needs, including possible care feeds, as being divorced, my children will pay inheritance tax on the value of my house alone. I did have a pension fund that I earned marked to cover this but the rules will be changing from 2027 and such pensions will then be added to my estate for inheritance tax.

I give them money for each birthday and Christmas plus extra at the end of the tax year once I assess my likely needs for the year ahead. I guess it totals gifting £20k each year at the moment, but my children know not to rely on it as I might have less surplus income in the future. I’m 70 this year and I’m pretty sure I can meet all my needs - who knows how long we will live!

My solicitor who updated my will and my financial advisor who I meet with every year are fully aware of my plans.

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

This is true. You would be surprised at some of the investigations they make.
If your bank records show you never buy any groceries, there will be a question why that is. I have known this to happen. Not with groceries but with other household bills.

Supposing she was partial to a couple of bottles of nice champagne a week … that would easily be £90 …

If your mum is paying for your food shop on her card, no one will know.

If she's transferring you money, then there's trace.

It's a lovely thing for her to pay for your food shop. I mean the government will only take it once she's not here. I'd recommend keeping it very quiet though and not telling any friends or other family members that your mum is paying for your food shop every week. Some people are snitchers.

I think it would be easier if your mum transferred you that amount weekly or monthly. The paper trail will be easier. And you need proof this is excess income.

I was told that although such gifts do need to come from income not savings, you can count interest accrued from savings and investments as income. Also if you cash in a fund, such as an ISA, and put it in your bank account to spend on your needs, it counts as income.

My work related pensions do not fully cover my needs, I knew this years ago so made other plans, putting earnings into ISAs, savings accounts, bonds etc with the intention of drawing down income as and when I need it. I am planning a new bathroom this year so intend to take 25% tax free cash from a private pension fund ( from my divorce) to fund it. My financial advisor helps me decide where to access such spending as I start planning, it varies according to current market trends.

Nobody would ever question her paying for your shopping @Smilingpeacock

I think your mum sounds lovely, it is a great idea and good on her for helping you out rather than let it go to HMRC! It sounds like she has enough put by to cover herself and is not impacting her on way of living. Xx

Id be surprised if the tax man had time to scrutinise her Tesco receipts....

Who even keeps their receipts? The tax office would have zero interest in mum's tesco shopping anyway.

This. If OPDM usual shop has increased by a whopping £600+ a month it is absolutely something that can be looked into. I mean the chances are it probably wouldn’t be but it’s not as easy as ‘how would they know?’ - any huge increase in regular spending can be questioned.

How lovely. I hope I can do this for my kids one day 💗

What are you going to look into it for?

deprivation of assets? What are you going to do with your findings?

I’m not looking into anything, like I said it’s unlikely in the case, but it absolutely can and does happen.

Absolutely let her do this. No one would know or care particularly X our friends had a massive extension and home refurb done and their elderly mother paid the builders bill, again wanted to offload money x

"I did have a pension fund that I earned marked to cover this..."

"I’m 70 this year and I’m pretty sure I can meet all my needs - who knows how long we will live!"

I'm sure that your financial advisor has probably mentioned this but just to raise the suggestion for anyone else reading this thread.

With the change in pension rules and IHT it may be worthwhile converting at least part of the pension fund into an annuity (like you were forced to do prior to 2015).

For a person aged 70, a single life annuity rising by RPI annually is going to yield around 6.5% (or 8.5% for no increase). So £100,000 would provide an annual income of £6,500 increasing by RPI each year or a flat amount of £8,500 per year.

If your pension fund is going to be hit with IHT then using some or all of it for an annuity will reduce the amount of the pension fund and the IHT liability.

It will also give you an increased income which you can then choose to gift to your children presuming that you otherwise have sufficient income.

What does and can happen? What is the care assessor going to do?

Did you read my post at all? I have twice said in this case ‘probably not’ and ‘unlikely’ - I have nothing further to say.

Yes I read your post, but you don’t actually state what’s wrong or what would happen for spending your own money, but a large amount than would be considered “normal”

and when I press for an explanation, ad I’d like to know

you refuse to say

As others have said it can be legit. My dad pays for my kids' extracurricular activities on this basis. However, we match the amount and pay it into their ISAs, because we have always said to him that we can pay if for any reason he can't. That way, we continue our finances based on the cost of the activities. I'd recommend doing this if possible (I.e. saving the food cost each month) so you don't find yourself suddenly unable to afford food shopping if your mum decides to stop paying.

lol

If she pays it out of “normal income”
rather than using her savings it’s fine.

Also there’s no “breaking rules”, no one is going to get in trouble, there will just be inheritance tax to pay if it doesn’t fall within allowances.

Still not able to work out what’s wrong…

Can’t say I agree. Just use GAD rates and gift from drawdown. Why not?

when my dad first had to go into a care home with dementia, he had a house worth 200k and 30k in savings.

We had to sell his home to pay for care.

When he died, he only had 30k of that left, so we had just started the process of applying to the LA to partially fund his care for when he reached the 23k threshold (he died a week after we applied).

I had kept receipts of everything that I, as POA had spent from his account (care home fees, hearing aids (very expensive and the care homes kept losing), taxis to hospital, toiletries and biscuits/cakes for him). I would have had to have given them all those and his bank statements so they could see that I hadn’t taken any money for myself, or deprived him of assets.

I assume they would have gone back further as well to see that he hadn’t given away any lump sums before he went into a home.

I didn’t have to do that in the end as he died, but the care home manager said they could be ruthless barstards sometimes.

Incidentally, that’s why my PIL and DH uncle buy holidays that can’t be traced and give cash (and make up fake drug habits incase anyone asks one day).

My father spent over 200k on his “care”. Everything he’d ever worked for. He was physically abused in two care homes. It was horrific. I had to fight tooth and nail for him to have any shred of dignity and he got no justice.

They all saw that. They helped me with the process. they saw him spend everything he’d worked his fingers to the bone for go on paying for care homes which would be shut down in they treated dogs like they do people. Along side people who’d never saved a thing and the LA were paying for.

And all of them thought, fuck that. We’ll spend our money how we like now and leave no trace of it.