Borrowed money off in-laws and now they won’t let us pay them back?

[Overthis22]

My car reached the end of its life earlier this year and we didn’t have the funds to get a replacement. Cost of living and all that. I really need a car as there isn’t any public transport where we live (rural). We looked at getting finance but it worked out so expensive in the long run so my husband’s parents loaned us the 5k to purchase the car directly. This was very kind of them and we really appreciated it at the time. But my DH had since tried to repay them the money and they keep saying things like ‘no hurry’ and ‘don’t worry’. My DH received his end of year bonus this month and tried to explain that if we don’t pay them back now we may not have the funds again until this time next year, and they said ‘we can wait until next year’. I’m confused. If they didn’t want it back they wouldn’t say about waiting until next year so why not just let us pay it now. I’m not close to them so I don’t feel comfortable speaking to them about it. Not sure what to do now other than offer again next year but I don’t like feeling like we’re in debt.

Difference between needing to, and leaving yourself open to interpretation.
Sleep well.

If there is no formal loan agreement in place, it is not perceived to be a loan.
I recently borrowed £30k from a parent. We checked all of this out.

They may not want to leave you short in the middle of the COL crisis, knowing that you don’t have even £5k in savings. Maybe try offering them £2.5k this year, £2.5k next year? That way they know you’re left with a bit of a buffer and you don’t have to feel as much in debt.

By that I mean we checked it out with actual HMRC.

HotChox I did not back you up. You couldn’t be more wrong

But again it’s totally irrelevant unless there is some question over needing to pay IHT in the future. No one is randomly checking your account to see if you got a gift because that wouldn’t be subject to income tax. I don’t know if it’s still the case but historically checks were done at random to validate you didn’t need to declare estate relevant for IHT or if you did declare it to check the amount you declared and then you do have to provide some back up. In my personal experience the fact it was sent to someone and never paid back would mean it would be assumed to be a gift even if it wasn’t. You do know gifts are not treated as income - right?

Put the 5k in a separate account and have it as an emergency fund if they ever need it back themselves.

My FIL did this to me and he refused repayment. So I stuck the money in an account and forgot. A few years later je had a stroke and needed some work done on making his house more accessible. I had the 5k ready to go and he was forever grateful

😊

OP I’d also save it somewhere and if it reaches a point you need it just talk to inlaws and ask if they are ok to defer further so you can use it for whatever it is you need the money for. I’m sure you aren’t but don’t worry about tax. If IHT becomes an issue you’ll have plenty of money to pay someone to advise you on how to correctly complete the paperwork

Incredible
They are just being very polite. Surely you can transfer the money or give them the bundle of cash and tell them re the bonus etc to put their mind at rest as they mat be thinking you are of the hand-to-mouth type living lot and don't want you to borrow money and pay interest.

Just pay it back, NOW

How are you contributing to the new car situation? Your husband got a bonus and is using that to repay the loan, but have you contributed financially to the situation? Seems a bit unfair on your other half that bonus is going on your car.

@Hotchoxs did an excellent job of "stepping away from this thread now". 😁

I think your in laws don't want it back and are kicking the can down the road. My parents "loaned" us a £6k house deposit and only told us it was a wedding gift 2 years later.

Some couples hold all assets and income in common.

Not true. There is no “gift limit”. There isn’t even a mechanism to tell HMRC about a lifetime gift between individuals.

(I’m a chartered tax adviser with ten years experience advising ultra high net worth individuals)

Well my attitude is definitely a bit mumsie on this one but it seems to me that your logic is (roughly) - take the money now please because otherwise we'll spend it on stuff like the electric bill next year as we anticipate being pretty short of money. & whilst it's entirely possible I'm wrong it seems to me their attitude is keep the money and spend it whenever you need it as it'll make us feel happier to know you've a bit of a cushion in the bank.

This. 3% at least and if you feel like it next year you can buy them a bottle of something to say thank you.

I would hate this. I like to pay my debts back as soon as possible and not have the money hanging around with the stressful feeling of still owing money. How weird of them to say keep it till next year.

Tell DH to take his dad to the pub.
Tell his dad can he have his account number so he can transfer the money.
His dad may well say. Just keep it.

There is indeed a yearly gift limit per giftee for tax purposes BUT this limit only comes into effect if the giver dies within seven years of making the gift AND their estate is then subject to IHT, inheritance tax.
IHT comes into play on estates worth over 325 K for a single person, and, effectively over 650K for the estate of the last survivor of a married couple. No inheritance tax is due when one spouse leaves their entire estate to the other. ( A good reason for getting married or having a civil partnership. )
HMRC needs to be informed of relevant gifts when the estate of a deceased person is going through probate but not until then.

Just open up a new bank account (or put in a mortgage offset account) and have it ready if they ever need it. Surely paying it back now, and then dealing with the cost of living increase, is no different to keeping it aside in a separate bank account and also dealing with the cost of living increase?

This is an interest free loan - that you no longer need to repay back the principal part.

What were your plans if you'd been able to get finance?

Erm.. I’m looking after our children and home. That’s my contribution. 👍🏻

If you didnt have the cash earlier this year and are scared you cant keep it for a year then to be honest you could probably be doing with an emergency fund set up, i think they can tell you are living month to month or dont have much in savings and want to help you stop that. Stick it in a one year savings account so you aren't tempted to dip in to it but you have it there for emergencies

Do this.

Then next time you visit in person, have the conversation then, all together. Then you won’t be wondering if your husband has said this, or they’ve said that. You can be explicit.

‘Please let us pay you back, ILs - it was so generous but I hate feeling like we’ve got a debt.’

’Don’t be silly, it was a gift, we don’t need it back/There’s no rush to pay us but if it’s making you feel bad of course you can give the money back.’ Etc.

You do need an emergency fund though so stash it for now and try to add to it.

Surely you have their details from when they have you the money originally?

Surely paying it back now, and then dealing with the cost of living increase, is no different to keeping it aside in a separate bank account and also dealing with the cost of living increase?

Also this. You can’t spend it, because you owe it. So pretend it’s not available and stick to your normal budget.

This. I don't really understand why you're making such a big deal about it, OP.

She’s already said she doesn’t. Credits to my account only detail the reference and payee, not their account details.