Parents want inheritance back

[NeededtoNC]

Ten years ago, my parents decided to gift me and my brother 100k each as early inheritance within the 7 year period.

With that I bought a house (with a mortgage). Still have 15 years left on the mortgage.

Now our parents want the inheritance back because they have decided they want to buy a summer home abroad.

DB is in a position to be able to as he’s well off.
However I am not and I’m barely able to keep up with the mortgage payments as it is.

In order to give back the money I’d need to sell. My parents are aware of this and have said that if I need help to pay rent, they’ll give it to me. But they want the lump sum in order to buy their holiday home.

AIBU to not give it to them?

I would say to them that much as you would like to help, you cannot because you accepted the gift in good faith and to return it now would set you back to a step worse than you would have been in, because you will have lost 10 years investment etc, and you cannot put your family / children at risk of the insecurity of renting at this stage. Say how grateful you are that they did this, but you are not in a position to return the money to them, or to be as generous in a reciprocal way

Say that you never want to be a in a a position where you look to the date of their death as a way to benefit or gain security.

Yeah, that's better than my suggestion

OP are you ever coming back, or are you too shocked by the fact that 400plus people are on your side?
Also #team OP here.

I'd have to say I'd be (from experience as legal secretary) going down the legal route and finding out where I stood.

if the house is in both your names, the money was a gift etc then they are not in a position to help at all. Could you remortgage and give them that sum (as galling as it would be) to help towards their holiday home?

I'd mention the remortgage (through gritted teeth) but unless as MRex says DB buys the holiday home and e.g. you lose out on your future inheritance then you'd have to go, I think NC with your DP over this.

They're utter cunts though.

A Korean friend of mine has received her inheritance early to fund her studies as doctor and living in UK for past 13 years, she's now learned from her DF that her DB and his DW/DC will get more than her in inheritance so she's moving home to help - I 'think' but unsure that if she moves home then she'll be reimbursed for the 'help' to her DF. I can sort of see her DF/DB point of view against hers but it's still emotional blackmail really. Your situation is sort of similar.

What is the consequence if you refuse to return the money. Will you be disinherited.

I would speak to a solicitor for advice on how this is likely to affect their initial 'gift'. If you were to sell, perhaps any money could then be given to them as a debt which must be repaid.

I wonder if they think that finding yourself in a cosier financial position than you would have been without their help has blunted your ambition, and that if they remove their help it'll make you more successful? Bollocks to that, if they do think it.

I suspect, also, that you will find that you don't figure in their wills, so that their saying it'll be yours when they die won't be true and you'll have sold up and be left with nothing.

What happens if they're giving you rent and then they lose another sum in a bad investment and decide that they don't want to give you rent?

I think that whatever you do now you're going to find yourself in financial trouble at some point because of it. I also think that your parents aren't to be trusted, and I'm really sorry for that.

Can they rent a Holiday home, I would think that’s cheaper overall and gives them more freedom.

DarkCloudsandSunnyDays - I think but don't quote me, if OP refused to give money back then parents could choose to disinherit her over her DB but unless the rest of the estate is significant and OP wishes to take that risk and lose out of rest of the estate (including chattels (is that the right word?!) like photos, china etc) then I'd say she doesn't have much to lose.

I'd question whether she wants to lose the relationship with her DB and DP's over this. If she doesn't mind doing this then fine.

If it were down to me, I'd see if she can get DB to pay for the rest of the holiday home or see if she can remortgage and pay them this way. The remortgaging would stick in my gullet however.

if the gift was a (perfectly legitimate) move to avoid inheritance tax, doesn't that mean that clawing it back would constitute some sort of tax-dodging?
I think this too. The return trip will definitely incur tax of some sort. You'd need the advice of a tax consultant at the least.

I find this unbelievably crass of parents to even consider asking this. We (as 60 somethings) are likely to find ourselves in the same position in the next few years as my husband's parents are in their late 80s and we will, fairly obviously, inherit from them in due course. We are looking forward to being able to help out our adult sons at this point by giving them what will hopefully be quite a large amount of money to help them out with property purchase or whatever. We wouldn't DREAM of ever asking for it back. The parents in question could have obviously purchased a holiday home for themselves at that point which would have been available for family use and would have ended up being part of their final estate. But they made the choice to give away at the money at that time. Far too late to change their minds now! If the son is rich enough/daft enough to give his £100k back then surely they could use that to buy something?

Who makes their child homeless to buy a holiday home?

This.

My brother doesn’t keep in touch, doesn’t want to know me. He grew up pretending he was an only child

Hmm, perhaps he can give them all the money they need then.

"We accepted the gift in good faith and we're not in a position to return it."

I wouldn't want to do it in your circumstances but...couldn't you sell your home, give them back the £100k out of the sale and then surely you will still have some profit yourself if you've been paying a mortgage off for 10 years, so you can put that down as a deposit on a new place. Sure, you won't be able to buy as expensive a place again, but you'll still be on the property ladder. It sucks, but you surely wouldn't be back to renting.

Also, if the brother isn't in touch then how does OP know he's really given the CF parents £100k? He might have told them to take a hike, or have never been asked.

The big things that will incur tax, are eventual sale of a second home (CGT) and inheritance (IHT). I don't know how those two taxes combine if the parents still own the second home at the time of death but suspect that both are paid in sequence - the estate pays CGT, then the estate is subject to IHT. Then there are the inheritance laws in the 'holiday' country.

Of course, if they live in the 'holiday home' permanently, as the idea of renting out their UK home suggests, they may have to switch their primary residence and pay CGT on their UK home.

Oh and what if one dies, then the other remarries and leaves everything to that spouse? Can OP trust an imaginary future spouse to honour any provisions made jointly with her parent while they were alive?

The whole point of the gift at least seven years before death, is that it is not an inheritance, so not subject to IHT (or any of this risk and speculation).

If OP gave her parents a gift of £100k, it would come back much reduced by taxation, if at all, unless her parents are much wealthier and more financially competent than they sound.

It's a no from me too.

1. It was a gift. They must have provided written confirmation that it was a gift at the time, under money laundering regulations. I did when I gave DD money for her deposit. They can't ask for it back.

1. Buying property abroad is not an investment, as it is in the UK. Much of what they spend they may not get back. Do they know this?

1. Are they wanting a summer home or a permanent home? To rent out their property in the UK on anything like a regular basis it will need to be emptied of their belongings. They won't be able to go back and forth. Living abroad isn't necessarily cheaper either.

1. If DB is happy to return his share and doesn't need or want to have any dealings with you, why doesn't he buy the holiday property in his name and let them rent it from him? The agreement being that he would own it 100% and you wouldn't be entitled to anything.

Come back op. What did you decide to do?

@essex42 if and when you gift your sons try to do and variation of your parents will so the money goes straight to them, if you inherit and gift to them and you then need care yourselves giving away such a large sum could be looked on as deprivation of assets,
you should not skip a generation as you don't know when you will need money, are your pensions good enough not just to live on but pay for new cars, boilers, people to paint house and garden and provide care when you need it

as for OP words fail me, you can't ask for gifts back it would be slightly different if her parents were in dire poverty ( not that she should sell her home but maybe should try to help) but they are not

They are being completely unreasonable.

DH's parents owned a holiday home in a posh beach town, about a 3 hour drive from where they lived. Owning it was a massive PITA. Renting it out when they weren't there was also a massive PITA. One renter hired a lorry and took most of the furniture with him at the end of the summer. It was eventually returned, but only after getting their attorney involved.

It would be fools errand for your parents and it's hugely unreasonable to expect you to sell and move so that you could hand back money that is legally and morally yours at this point.

It was a gift. There's nothing to return. Tell them to fuck off. I can't understand why your brother wants to give then £100K. The legal position is that they have no interest in the money the gave you.

Ten years ago, my parents decided to gift me and my brother 100k each
Now our parents want the inheritance back because they have decided they want to buy a summer home abroad

“Sorry -the money is already spent, I don’t have the money to give you any back.”

Crazy!

@onalongsabbatical
OP are you ever coming back, or are you too shocked by the fact that 400plus people are on your side?

Threads only 14hrs old, he's probably at work

I think the key point here is that you have built your financial planning and stability with the £100k included. So it's not a simple case of giving it back to be regifted it again later. It's now tied into all of your financial decisions and plans and can't simply be extricated without causing severe damage to your wider financial state.

Yanbu.

My dm-i-l always said we'd be fine when she died. She's still alive but the last of her, significant, money has gone in care home fees and we're just about to sell her small home (she down sized) to enable her to continue paying. She has dementia and would be upset to know all her financial planning has come to nothing. If she'd known she would have given each of her children and grandchildren a small gift to enable them to enjoy themselves for a short time!

Don't give the gift back. The tax implications are horrendous and there's always the possibility you'll end up with nothing.