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?

Indeed

So they were dodging inheritance tax and now want to take your house? More fool then

Coasty does seem to have some extra insights doesn't coasty

(Unsure of what pronoun to use but I think if this is a parent or relative it is a male one)

Under the 7 year rule the gifting parents do not save inheritance tax, the beneficiaries are the ones who have gained by the transfer.

@coastey how can she depend on her parents helping with rental if they have already asked for a gift back? also it appears her parents have not dealt with the way her brother treats her he spent his childhood pretending she did not exist
she will be worse off rental is normally more per month than a mortgage and landlords can just give you a couple of months notice to leave with all the upheaval of new deposits can you find a new rental in area without kids changing schools again
in no way could this be described as a beneficial move for OP
the only problem was the parents gifting money when they perhaps should not have done as they then lost money on investments but they still have their house they just want 2 at the expense of OP having 0
People do not know how much money they will need in retirement or for care expenses so people should not give away what they can't

afford
when given for a house deposit the parents almost certainly had to sign to say it was a gift as otherwise it would not count, if it was a loan that would be different
I would have more sympathy for the parents if they didn't have enough money to live on or had to sell their home and were now renting, but they want a second home they have a house already it is really not the same
if you look at the problems many mumnetters have renting it is not secure unlike some other European countries were once renting it is your home and only under very specific circumstances can you be evicted

So many desperate money grabbing offsprings.

For the life of me, I can't see what's "money-grabbing" about using money given to you in good faith to buy a home for yourself and your children. Had the parents said they might ask for it back at some point, that would be a different matter - but of course they couldn't have taken advantage of the tax loophole if they'd done that.

Coastey, you mention estoppel but don't seem to understand it. That is based on the principle that, if you make a promise to someone and they change their position on the basis of that promise, it would be inequitable to allow you to go back on it. That's basically what happened here; if OP hadn't relied on the implied promise that a gift is a gift, she may have made all sorts of decisions that would have left her in a better position than she would be if she has to sell up now - e.g. she would have lived in a cheaper area, or used her own funds in different ways so that she could buy by other means. Also, as this is an equitable remedy, issues such as the conduct of the person making the promise come into consideration: here the fact that they are only asking for OP to be made homeless because they made bad investment decisions would be an important factor.

Where does it say she is struggling. She is getting help with the rental

So what happens next time the parents make a bad investment and stop helping with rent?

no more mortgage payments, presumably a profit on her house

The massive advantage of mortgage payments is that they leave you with a valuable asset. Does rent achieve that? And would you be pleased about the profit on your house when you didn't want to sell it or move?

and a free holiday home.

There's nothing that says OP will be able to use the holiday home, or that she will be able to afford to travel out to it, or that it will be somewhere where she and her family actually want to take holidays.

Which would you prefer, the chance to stay in your own home or the uncertain chance of holidays in a place you haven't chosen to holiday in?

I do not consider them clueless, what ever the relations they made the effort to provide the funds

But they haven't. "Providing funds" means literally that; it does not mean handing them over as a gift and then demanding them back.

I can assure you I have no connection. I have five brothers and sisters and seven children. My parents died more than ten years ago. After my father died my mother moved into town and I provided her with a house as her property in the country was low value. My brothers paid her rates, ins electric etc etc. My two sisters visited her every day did the shopping etc.. My parents had worked tirelessly to bring us up. Anything we had was free to our parents. Whether we were given anything or earnt it. It was freely available to our parents. What did we have to lose giving anything back. We gained in the end. I cannot understand the suspicious and intractable mentality that exist in this blog.

the term is "gift" as under tax laws where you are allowed to "gift" money to your (adult) children under tax laws

• so long as they do not die within the 7 year period (there is a sliding scale of how much tax the said offspring would have to pay if they die for each year before this. Now reading a little more into gov.uk website they state that such a gift to be free of tax must be free & without any form of compensation to the person giving this money - what becomes interesting is how living in another country might affect tax owed on property - here's a thought; if op sells property & it makes a profit will parents expect this to go them or only the money they gave? interesting hey? for 2 reasons the parents making her sell property have avoided the second home capital gains tax on the said property because by telling daughter its their money & partially their home they do owe tax to the government & than taking it out of the country??? they think they may have avoided tax debts? & probably assume the money they get on rent of their own uk property they will still have to pay tax in the uk - so yes it is very sus - the whole gift process is a legal thing for this figure & if the parents were sick or disabled in uk & needed care after all this time this would not be considered tax avoidance UNLESS they tried to claw money back - I think this is morally reprehensible on the part of the parents - do you have a mortgage on your property or was the house wholly purchased using the money? & what if her dp decide they need all their money for their own needs & op cant afford the rent?

@Isatis makes it very clear.

The parents have acted in bad faith. The OP has arranged finances based on the reasonable assumption that when her parents made her a gift, called it a gift and signed papers saying it was a gift - they actually intended for it to be a gift.

In all probability they genuinely did intend for it to be a gift before their later bad investments lost them a lot of cash. They nw want to rewrite history and pretend it was a loan.

That simply isn't the action of loving decent parents but in any case, repayment would put the OP in a worse situation financially than if she'd never had the money. She's made herself ineligible for shared ownership schemes which are closed to those who have ever owned a home for example, and could have been paying into one of the matched-funding home purchase ISA schemes (can't recall what they are called) but wouldn't be able to now.

I hope the parents are on this thread seeing how few people agree with them. Those that do are clearly deluded.

And when your mother asked you all to sell your family homes to fund her second home abroad coastey?

Many things go on in families that do not conform to the rules of the wider world. There should be more trust in a normal family than is found at the interface with the community.
Estoppel only kicks in at the end of the day. Any agreement can be varied without depriving the beneficiary. No one says that the daughter would not be the beneficiary and that she would not have the money at the end of the day.
I know that the days when fathers had control are gone or are going in our culture. I am sure this will be read by other cultures that can still follow it. Ours is becoming a 'can you buy me' one way culture.
I always say to my children, if you give a pound I will give you ten, however if you give me nothing where is the incentive.

coastey - a free holiday home means fuck all to the OP or to lots of people who live in UK and have to travel abroad (especially with Brexit on the doorstep) . In fact, my parents still have their holiday home (rented out a lot now) but they sold their other house which was the main holiday home, and it was a PITA to travel there (inbetween La Rochelle and Bordeaux) for most of the family. Main holiday home was in a hamlet and other one in a small village. Hamlet one gradually got broken into more and police and mayor did sweet FA about that because we're English (happy to take our money though in their shops etc).

Renting is a PITA too. Rents can rise at any time. There are bad as well as good landlords and they can choose to sell at any point.

Add to the fact it's

No one says that the daughter would not be the beneficiary and that she would not have the money at the end of the day.

What money? How can you know that there will be money in future, or that OP will receive any?

You're making less sense as you go on causey. You're just talking about yourself - while accusing eveyone else of being self-centred!

The parents did it in good faith, whether it is a holiday home or not, it is needed back for the enjoyment of their retirement

What was done in “good faith” it was a gift.

The only way to overcome this would have been for op to not have used the money and done as her dB did and just let it sit in a bank account for 10 years knowing it was a tax avoidance scam and when the coast was clear it was to be handed back.

In which case then

If you needed money coasty, would you expect your Mother to sell the home you bought her?

It would be interesting if they lived in Portugal. If you buy a property there you can live income tax free and do some transactions capital gains tax free.That is a Portugal concession to foreigners. Inheritance tax is different and not necessarily the concern of parents, it is only of concern to the children. Why care what tax you pay after you die. Its not a tax you pay while living! It is a tax paid by the estate before being passed to the beneficiaries.

Once a gift is given, it no longer belongs to the giver. Money or otherwise. Why should OP lose her home, her only roof over her head, to basically make up for her parents shit financial investment?

Erm, we all understand IHT thanks.

@coastey but here a thing if UK believe that you owe them tax they can pursue you & you have to live in another country for about 10 years as resident to avoid the debt - point being the parents GAVE her the money as a "gift" under the tax laws & if you view the whole principle of such a gift under tax they cannot claim it back because it is no longer their money .

They are not pulling the rug.Their daughter is supported in moving into rented premises until they die. She has the advantage of a holiday home as well

Really, you would believe someone who has given you a gift of money then wants you to give the same amount back to them 10years later but says as it will make you homeless they will support you in paying for your rent.

I would not trust someone who has proven themselves to be a bare faced liar.

These parents have already lost a significant amount of money on one investment.
They are planning to buy a holiday home presumably in Europe which sounds like it will be as money sapping as the first investment.

Would a blood relation ask for a sum of money that would leave their children without their own home.

This isn’t just about giving parents £100,000 and then hoping that they pay the rent (which would probably cost a damn site more than renting a holiday home for 6 months of the year)
It is about how much equity would build up in ops property in the intervening years and the inheritance I doubt would cover that.

It also doesn’t add up.

The parents don’t have £200,000 to buy a holiday home. No one will lend it to them.
They sound like they don’t have much money left so if both dc handed over £100,000 each for the holiday home on the understanding that they would pay say £1200 per month for ops rent

They would be taking on not only ops rent but also financing a 3rd property with all the bills associated with having a holiday home

And does anyone believe the holiday home will be free for op to use?

coastey despite your assertions to the contrary, there is absolutely no guarantee that there will be anything to inherit. Care home fees, further crap investments, etc, etc. Your attitude is rather peculiar, and I'm wondering if you are one of the parents.

"@coastey but here a thing if UK believe that you owe them tax they can pursue you & you have to live in another country for about 10 years as resident to avoid the debt - point being the parents GAVE her the money as a "gift" under the tax laws & if you view the whole principle of such a gift under tax they cannot claim it back because it is no longer their money ."
THIS ^^ So much this ^