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 wouldnt trust the parents to help with her rent given their track record !

& its illegal - as I said earlier - by making this a loan (which it isn't & they would need paperwork to back that up) they own a second property & therefore would have to pay capital gains tax on said property - check it out - they will owe tax which if you are paying them back -you would have to report to your solicitor by law! (ie when you fill in sales forms at sale & if it was a loan op would have had to report it as such to her mortgage provider - her parents if they wanted to reclaim this should have thought it through

coastey In the UK, this would be tax fraud, involving at least four banks, two solicitors and HMRC.

I have some insight into this, working in a regulated banking environment and gathering evidence for prosecutions up to SFO involvement.

The taxman doesn't give a shiny one whether 'but it's my mum' or 'I didn't know' are your defence. If you're over 18 and considered competent, they will have you.

In the UK it's not uncommon for fraud to attract a longer custodial sentence than crimes against the person,even on a first offence. Financial and property crime has always been dealt with severely.

Demanding your child risks a custodial sentence so you can have a holiday home is not good parenting.

"Equity release is a last resort and does short term good but long term 'bad' for any other relatives."

Unlike spending all your liquid assets on rent for 20 years?

As it happens, I am of the mindset that I would do anything to help my parents.

But there is no need, even, for the OP to sell her house. Many PP have suggested different ways to make the money work so that the parents can have their holiday house, using the rental from their house for that rather than for the OP, for example.

And the long term benefits would be better for everyone.

I would do almost anything for my parents, and them for me and my siblings. But I know they would never ask me to sell their house to reclaim money they had given me years before.

Well maybe to get the lawyer fees to get my Mum or Dad out of an unjust and unbearable imprisonment under some horrible regime abroad, for example, but if that was the case they wouldn't have to ask!

If the OP sells her house now and goes back to renting for 20 years, she will probably never get in the property ladder again. House prices will have gone up, she will have fewer years to pay a mortgage, and any inheritance her parents might have left could have been absorbed into care fees etc (and why not - the money is primarily for the parents and their needs in old age).

The money was given, and the disadvantage to the OP disproportionate in the context of her home v a holiday home.

I note that while PP have been outspoken, the op has not spoken badly of her parents, just her distress at the situation.

Portuguese income tax benefits for expats. ... Those granted NHR status are given a tax exemption in Portugal on all forms of taxable income (employment, business, investment, rental, capital gains and pension) that they receive from abroad. Income obtained from inside Portugal is taxed at a flat rate of 20%.The expat has to own a house in Portugal together NHR.

Portuguese income tax benefits for expats. ... Those granted NHR status are given a tax exemption in Portugal on all forms of taxable income (employment, business, investment, rental, capital gains and pension) that they receive from abroad. Income obtained from inside Portugal is taxed at a flat rate of 20%.

[ what has the Portuguese rules on expat tax regime got to do with anything at all? You don’t agree with the vast (& obviously right) majority, so either talk about something relevant or bow out

@coastey IF you owe money to HMRC in the UK they can claim it back off you even if you move to another country - please check the relevant websites - the information you have given is about tax owed in Portugal which does not relate to this circumstance & we don't even know if they are going to Portugal & to avoid UK tax they would have had to be resident for some years elsewhere not just moved there to avoid them - as they say you avoid everything but death & taxes (or words to that effect!)

@TheRedBarrows exactly if the parents were in dire need differently kettle of fish - & op attitude shows love for them but concern over her own circumstance, nb I bet her brother has invested money over the years & had good return but even than he is on very dodgy legal grounds maybe it could be considered money laundering (?please correct me if I am wrong here but it certainly sounds like tax avoidance???) HMRC - are not the people to try & con they have long arms & even longer memories

She was at end of life...if she was with my father I am sure we could have used what we had been given to provide a holiday place. I don't see the big deal.

It's a gift isn't it? Gifts are non returnable

@coastey is a troll lets not feed her! she isn't going to accept that the parents are doing something illegal in the UK which is where the parents live & that they are bound by British Laws & could get op into legal issues as well as serious financial ones - get thee gone @coastey

Why put everything on the the 'loving parents', there comes a point in time when it comes down to the 'loving daughter and son' to assist their parents see out the retirement years.

I will absolutely assist my parents: I am doing, I am running myself ragged after their frailties.

But I would also do all I could not to pull a secure roof from over my children’s Heads, and I would live in shoe box in t’middle of t’road before I would ask my child to sell their house to assist me, after I had given them a gift.

It is precisely because I know my own parents feel the same way that I am astounded by the actions of the OP’s parents. For a second home! A holiday home! That’s what they lost when their investment went down the pan, not their child’s home, surely?

Sorry that your parents have put you in this position OP. However, I'd give the money back, even at great cost to myself. I wouldn't feel good keeping a 'gift' that wasn't freely given.

It being at great cost to my children, I'd suck up any personal discomfort...

Really, hasn't everything that can possibly be said about this been said already?

@animalprintfree it was freely given though.

no one would seriously damage their own children's security and wellbeing for the sake of their parents getting a second home which would be a bad investment, a money-pit of unwelcome maintenance expenses and a surefire way to disinherit themself as the parents would most certainly lose their remaining capital one way or another. Those saying they would must surely just not have thought about it that deeply (or may not be that bright)

It's perfectly possible that I'm 'not that bright' 🙄, but if my parents (or anyone else for that matter) regretted giving me money, I would give it back. I am not advising the OP to do this, but it's the decision I'd make.

animalprintfree

How do you tell the difference between a gift which needs to be given back and a gift freely given.

Op was given this money 10 years ago.

@animalprintfree please read mine & ops & others comments on LEGAL reasons why this is complicated & how this affects op. But first of all the money was a "gift" re pre-inheritance 10 years ago & assumed to be permanent under those circumstances - the ops financial situation will be seriously compromised & if it was a loan she wouldn't used it to purchase home - she would have to sell home & parents want it to purchase holiday home not for health or social care or debts

There's lots of woolly thinking on this thread. The parents haven't tried and aren't intending to do anything illegal . They gave their daughter a gift of 100K some time ago. Now they are asking her to give them 100K. Up to her whether she says yes or no.

(There is a perfectly obvious explanation why the two gifts are the same amount. If some paranoid person at HMRC wants to spend time and money investigating whether the first gift was an attempted scam that ended up costing HMRC nothing, so what? He's not going to find anything, because it wasn't.)

The tax legalities are irrelevant.

It is absolutely abhorrent for any parent to treat their own child in this way.

I think any advice re tax or whatever is a bit irrelevant anyway since the OP disappeared back into the daily fail

NZEire - you read what? - this story?

Unless they want something really upmarket they could afford a nice apartment with your brother's share. Or why don't they rent abroad when they want to be there, there are plenty of options. Otherwise it just sounds totally selfish of them. Do they realise the complications involved should they die and leave their children to sort out ownership of a property abroad. It's fraught with difficulties. Take Spain for example (I've lived there). If one partner dies, their half of the property passes to the children who have to pay inheritance tax before the property can be sold. If they can't afford to, there is an impasse where the property can't be sold. Sounds like they didn't think through the impact of their original decision on you and they're now compounding it.