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?

Actually I'd be pissed off if grandchildren who had nothing to do with him inherited an equal amount!

Just to add that when DH has been the executor of a will that came under IHT, he was asked by HMRC to prove that a sum of money declared as a gift was actually a gift and not a loan. Although in this case, it seems to be the beneficiaries not HMRC making the queries!

If it was a gift you don't legally have to give it back and the estate will be liable for the IHT on the sum. If you want to maintain family relations, you could obviously say you don't want your share of the inheritance from his estate.

This is all a bit pointless less OP, you haven't given sufficient information. It hinges on how much this was, how long ago and the nature of the transaction, as well as the stipulation of the will. If you are named in the will as beneficiaries still, you will receive whatever is owed to you- the executor has no choice but to action this.

However as many have said, info depending, you are potentially due to pay inheritance tax. What has thrown me is how on earth you got a mortgage? Your grandfather would have had to engage with your conveyancing solicitor to declare that a 'true gift' in order for you to be able to use it against a property. Lenders and solicitors won't consider it viable and secure funds otherwise as there is the possibility the person giving it can later claim it was a loan, or can claim an interest in the property as 'their' money is invested in it. If this was an undeclared gift I'm afraid you will ne in money laundering territory as well as will have made a fraudulent mortgage application.

If he made a gift declaration it cannot be made claim against but inheritance tax may be due. I would just book a solicitor.

inform them that if they pursue you legally the only people who will benefit will be the lawyers
&
do you have any paperwork or records that show that your gf gave/gifted you the money?
Definitely contact solicitor & get them to write a single letter on your behalf first (check
solicitors.lawsociety.org.uk/
the link above & get specialist in wills near to you

The OP had already said that IHT as already been accounted for.

dontgobacon I’ve read the OP to mean they’d bought the house and then GF gave them the money, so nothing to do with the mortgage company as they already had the house.

Aaa I see tax has been accounted for already. In that case get a solicitor and have them handle it. I do think it's fair you pay your own tax on your gift but it was clearly intended for you not to be spread around all 12 of you so they're being VU.

@Witchend - iht doesn't work like that. If you give large sums of money away and then die within 7 years there might be an iht liability depending on the size of the estate. If there is tax to pay (and it reduces over the 7 years) it is paid by the estate of the deceased, not the recipient. The recipient never need give their generously acquired lolly another thought.

Re the gift, keep it and don't entertain them.

The cheek of them.

Keep copies of the texts.

diddl....He didn't say no...He took it. Yes the GD was very unfair I'd be questioning how and why it happened.

What arseholes.

HomeMade it’s not the OPs tax it’s the estates tax.

@longearedbat

People you give gifts to might have to pay Inheritance Tax
taken from the .gov site. That implies to me that it is the person who gets the gift not the estate who has to pay.

If it was the estate then I'd expect it to say "the estate may have to pay IT on gifts given..."

You cannot legally go against the terms of DGF’s will. Don’t pay anything back and tell the executors you’re expecting your share of the inheritance just like all the others. They are all CFs. Sounds like you’re the only ones who cared about DGF and his wishes. You deserve it more than them regardless of the legalities.

The estate is liable.

If there are not enough funds in the estate then the HMRC may well want the receiver to pay up, but it's the estate that owes the IHT. That's why it says 'might'.

Was your Grandad of sound mind at the time he made the gift? If there is any doubt about that then that is likely to be the most obvious way to challenge your gift.

Witchend the recipient may be liable if the deceased has gifted more than £325,000/£650,000.

The OP has confirmed that IHT has already been accounted for.

OP, it doesn't sound like you're involved in executing the estate,but please get proper advice if you are. There's a lot of well intentioned twaddle in this thread!

On principle though, you received a gift and it's yours. As long as there was nothing quirky in the will about it needing to be repaid or taken into account, then you don't have to give anything back. It's unfortunate for them and evidently annoying but that was the GF's choice.

I mean the deceased prior to death obviously.

Yes the GD was very unfair I'd be questioning how and why it happened.

No he wasn’t, what nonsense. His money, his choice of what to do with it. If he wanted to help a GC who cared for him that was entirely up to him.

If you cant pay it back , then you can’t pay it back. But it does seem very unfair for one grandchild to receive a gift plus inheritance and therefore much more than all the others. I couldn’t do that to my siblings and cousins. I would forego my share of the inheritance but explain that I simply didn’t have the other 10k to pay back. I personally would have assumed that any substantial gift was actually an early inheritance.

Catsandchardonnay -“No he wasn’t, what nonsense. His money, his choice of what to do with it. If he wanted to help a GC who cared for him that was entirely up to him.”

Absolutely this

I'm frankly appalled that anyone would even suggest that. It was his money to do with as he wished; not his relatives to decide what they think is 'fair'.

Ignore these requests. I just hope the executors are not your relatives. If they think they can distribute his money in any way other than what is in the will, they are quite wrong.

"diddl....He didn't say no...He took it."

Well yes, he accepted what was presumably offered without duress?

Maybe GF meant to change his will to reflect it?

Who knows?

I think what I would do next might depend on the figures involved tbh.

If it was a couple of grand I might feel well OK, that's deserved because of the care I gave.

However if giving back would mean nothing inherited plus still "owing" 10 grand down it then it seems as if it was quite a lot & Op's husband by the sounds of things would still have had more than the others if he gave nothing back & took no inheritance?

There's a huge amount of misinformation about IHT here that the OP would do well to ignore.

From the information given, it's not possible to ascertain whether the gift is liable to IHT. You'd need to know exactly what other gifts the grandfather made, if any, and when these were made; the full value of the estate, whether he was widowed and has any transferable nil rate band available from his late wife etc etc etc.

It might be that he hadn't made any previous gifts and could use 2 x £3,000 annual gift exemptions (this can be carried forward for one year if unused) so £6,000 of the gift would have been tax free and the remaining £4,000 would be added back into the estate. If his residual estate was valued at less than £325,000 then there's no IHT to pay.

But like I said, it's impossible to work it out based on the information given.

Assuming the gift was a gift and not a loan, you're not obliged to pay it back and even if for some reason you wanted to, it couldn't just be distributed by the executors as part of the estate because it no longer belonged to your grandfather anyway.

This

Not enough info to say if IHT is due from yourselves or just from the estate, very much depends on other gifts, when they were made, available NRB and so on. If no other gifts were made in the past 7 years and the gift to you was below the GF's available NRB then you and your husband will have no personal liability to tax. If this hasn't been clarified yet by the executors then it needs doing. As for the rest of it, the will should be followed as per the GF's wishes and not those of the beneficiaries.