Family want us to give financial gift back....

[Liskenly]

A couple of years ago DH's grandfather gave us a substantial financial gift (he was very wealthy). We'd brought a house that needed a huge amount of repairs and this money funded all of the repairs. We never asked for this money it was a spontaneous gift - his view was that we'd make better use of it than he did. We were very close to him and cared a lot for him prior to his death late last year. He has sadly now passed away. He has left the main part of his estate to be split between his 12 grandchildren (many of whom haven't seen him in the last 5 years). They are now insisting we give the gift back (taking it from the inheritance) so it can be divided between the 12 grandchildren with the rest of the of the estate (it has turned rather nasty). We're not wealthy, but we are comfortable, but can't afford to give back the money - basically it means we'd have to give £10k back to them as well as not have our 'share' of the inheritance. I've not met 5 of them but now recieving really nasty emails, texts etc. What would you do?

Gifts eat up the tax free band in date order, earliest first. So long as you received less than £325k you have no tax to pay. The value of your gift is added on to the value of the estate for the purposes of calculating the tax on the estate, as it was made less than 7 years ago. So the others have an increased tax bill. You have no legal liability to pay any of this bill.

if they want this gift on the table then every other gift given by the deceased should also be on the table

I know someone who inherited 2 properties worth 250k each, his sister was left nothing because their mum was spiteful. He transferred one property to his sister straight away, he valued her more than an extra 250k
this is a straightforward situation concerning 2 siblings who have a good relationship, I think a solid argument can be made that it speaks very little, if at all to the OP situation.

Ignore them. The money was a gift and not part of the estate, and unless there is anything stating otherwise in the will it was yours to keep. What a money grasping lot they sound - and no wonder they weren't given such a generous gift as they don't deserve it.

There is a load of crap on this thread

You need specialist advice from a solicitor who specialises in inheritance tax.

Without full information, exact dates, value if the estate etc then asking on the internet will only get you inaccurate advice.

Bluntness the others aren’t paying the IHT, it comes out of the estate. The OPs DH would only be personally liable if he was gifted in excess of the IHT threshold. The fact that the whole of the estate may be higher than the threshold and the OP has received more than the yearly gift exemption/allowance is irrelevant.

The GP gifted his own money during his lifetime as is his right, legally and morally. It had never belonged to any of the beneficiaries.

It would be unethical to expect the other beneficiaries to pay close to £1k each in IHT out of their inheritance

They’re getting around £45K each - why quibble over £900??

Honestly, some of the advice on this thread is laughable. OP, you and your DH received £50k which is below the nil rate band, You would only be liable to pay tax IF the £50k was gifted AFTER other gifts in the past 7 years and the money gifted to you took the amount ABOVE the NRB. We don't know his gifting history, we also don't know his available NRB, if he was widowed then that would contribute to the amount available to gift depending on what % had been used or not. Please seek specialist advise but no, you shouldn't have to pay if the gift was under the available NRB. (I am a qualified financial advisor and specialise in IHT so know what I'm talking about}

The OP's DH would have nothing to pay, regardless of the amount gifted.

See a solicitor.

My mil has given my BIL some of his “inheritance” early. So he’s got 40k cash as he reckoned he needed it. MIL has written into her will that dh is to be given 40k out of her estate before the rest is split 50/50. To even it up.

If that’s what your grandad had wanted he would have stipulated that. He didn’t so they don’t have a leg to stand on. However I have no idea about the tax implications.

Ignore them - it's your money given in his lifetime

Oh dear. Where there's a will, there's a relative .....

Also, to make it even more complex, there is a possible 14 year rule depending on other gifts made prior to the money he gave you. I don't want to bore you with details but this means that HMRC can go back 14 years and look at all gifts and bring them back into the estate depending on the legal structure of the gifts and in what order they were made. It is very complicated and needs someone who knows what they are doing so please do discuss with the solicitor and ensure the full history has been looked at.

As he died within 7 years of making the gift, it was a Potentially Exempt Transfer and is therefore liable for Inheritance Tax. If your solicitor / the executor is aware of this, no doubt this has been included in the estate for the IHT calculations - hence your cousins’ views that it therefore forms part of the estate to be distributed.

It does not, unless specifically mentioned in the will. I would deem it fair for you to pay any IHT due on the gift out of your share, however. Make sure this is accurately calculated - as others have said, the first £3k is tax free, then I think the rate tapers according to how many years ago the gift was given.

www.moneyadviceservice.org.uk/en/articles/gifts-and-exemptions-from-inheritance-tax

this is a straightforward situation concerning 2 siblings who have a good relationship, I think a solid argument can be made that it speaks very little, if at all to the OP situation.

I think a solid argument can be made that it is relevant however my point was in response to the poster who said it doesn't matter what's morally the right thing to do. The OPs situation involves a lot less money & a lot more family. Is it really worth falling out with so many members of your family?

Ignore and block them.

They are being CFs!

Bloody hell. Is be over the moon with what they are all being offered. Wills brings out the worse in people.

They other beneficiaries aren't getting 'less' because of the earlier gift; they have no entitlement to anything beyond what the estate is worth after all taxes are paid. And that £10k is part of the taxes, no matter what they think about it

That's exactly how I see it. And if the gift had never been made, that money would have remained in the deceased's bank accounts ... and would have been taxed anyway.

IGNORE!!!!!

Any gift he gave you prior to his death was between him and you. And the fact you helped care for him in his dying months is a true testament as to why he gave it you and no one else. It’s nobody’s business and they’ve a damn nerve asking you for it - just who do they think they are?
They’re jealous and greedy and want more. They wouldn’t hand it back if it were then would they? Speak to the lawyer dealing with the estate and explain what’s happened and the abuse you’re now receiving. They will be able to deal with it and issue a warning to everyone to wind their necks back in.
Why can’t people just be grateful for what they’ve been given? It’s not up to them how the estate is dealt with - ignore them.

I agree you should give them the tax on your gift so take 10k less

If the grandfather wanted that money back then he would of adjusted the will. Personally you'd be going against his wishes to pay it back

You need specialist advice from a solicitor who specialises in inheritance tax.

Good luck finding one of those, you know seeing as solicitors specialise in LAW and generally know sod all about tax.