To accept this gift from my parents?

[LadyJos]

My parents have very kindly offered to gift us 40k towards buying our first home. We are in our forties with two children and have of course worked hard for about 15 years to save a deposit.

After looking carefully at our finances, it seems we might just be able to buy a house without this 40k, although it would mean other financial sacrifices to make that happen and would make the our mortgage very expensive (although not unaffordable).

I feel I should come clean to my parents and tell them we may be able to make it work without this gift after all. If it were just my dad, I think he would offer the gift (or some of it) anyway. However, if my mum has this information she’ll want to withdraw it all together as she is very tight about money.

They are very well off but not to a ridiculous extent. My husband and I both work hard in good professional jobs. I’m really morally torn over whether to take the gift and make my family’s life financially easier or to explain that it might not be necessary, and lose the gift. AIBU?

Just to be clear. I don't think there is anything wrong with the OP accepting money from her parents I just think it's wrong to lie to them about her financial situation. Lying by omission counts as lying.

You seem to be very eager to defend Simonsez's batshit suggestion that OP spends 25% of the money her parents want to give her to buy a house on a "fantastic" holiday.

Every poster (except you) who has commented has agreed it's a very bad idea. Yet, you continue to bang on about it with increasingly poor arguments. It's almost as if you are a close relative of Simonsez, or even Simonsez herself... 🤔

How reading what I actually said?

Don’t accept the gift if it’s likely to come with any invisible strings attached.

I would be uncomfortable accepting the whole amount if my parents had to make sacrifices / cause anxiety on their side. I believe money they’ve worked hard to get should be spent on them to enjoy.
Would accepting a smaller amount, for example £20k, make the mortgage slightly cheaper? A smaller saving may equate to a family day out each month

Have they only offered the gift as they think you can't afford the house otherwise?

That the OPs AIBU.

OP’s mum might be angry about this. She might see it as paying for the holiday herself.

I was going to say the same do not go booking extravagant holidays with the £10k I would loose the plot if my child done that with money I had gifted her for a new home, certainly keep some back as I am sure there will be things you will need doing, decorating , flooring , curtains or furniture.

Parents would be liable for gift tax on any gift over £3k. £40k bank transaction would attract attention by the tax authorities in UK.

I see no reason not to have a discussion with your parents. Do you know what they are sacrificing to give you this gift? Don’t forget that even if it comes out of capital, there is still a loss to them. If it means fewer or no holidays/outings/treats etc etc, then it will be pretty galling to them, if you can have holidays they have sacrificed. They may be thinking that as you are 40 with older kids and not managed to buy, then any sacrifices on their part are worth it. It might not be £40k or nothing. Why not have an honest discussion and see what comes from it.

If they die with 7 years you'd be in trouble. Don't underestimate this, I had a parent die at quite a young age.

Take the money. Don’t mention the details. If they leave it to you as inheritance, depending on the situation, you might get taxed. If they get sick and need care it will be gobbled up by the state in care home fees. You will be investing it in bricks and mortar not squandering it. If they needed it they wouldn’t be offering.

I’d take the gift as they might be wanting to see you benefit from the money rather than waiting until they die (with no strings attached).

No they won’t be. If proper records are kept it is considered a Potentially Exempt Transfer (PET) and falls outside of the parents’ estate after seven years.

The recipient of an inheritance does not get taxed in the UK. The estate settles taxes before a beneficiary receives it.

You may or may not be an idiot. This is probably the only inheritance your parents can give you - if they survive another 7 years. What they want is for you to be safe and in your own home. What they also probably want is a little respect and gratitude. But take a step back. Care Home fees are currently around £2K per week. That's right. £2K per week. It's likely that your parents' home will be sold at some point to pay for care. The question you should really be asking is how involved do I want to be in looking after my parents when they become frail? If you want to be there 100%, then take the money.

Not if they gift it towards a child's home with a letter stating they have no financial interest in the property

Take the gift

That’s not correct - they would need to die within 7 years and it would only be taxable as part of estate.

We are planning to gift both of our DC's £30k towards a house deposit in the next couple of years. One will need it more than the other simply due to geographical price variations. We want to see them benefitting from an inheritance (if you can call it that) when they actually need it, not in 30 years time (hopefully!) when they should be well placed themselves.
They both work hard in good careers but this gift will save them years of renting and saving. Why wouldn't you gift it or indeed accept the gift if you could?

Only if both parents died within the next 7 years.

JubileeQueen123
Are you a parent? “If they needed it they wouldn’t be offering it”
I have, still do and always will, offer money, in various guises, that I could well use myself. But if I felt my kids and their families, need it more than me, then it’s theirs. I am not talking about going hungry, but I am talking about forgoing treats. If the OP's parents feel like I do, then communication is essential. Some of the IHT posts on MN are ill informed and irrelevant.

regardless of who gets taxed the end result is less cash

Except the gift!
I think as long as you don’t go booking a holiday to Hawaii anytime soon then you’re not taking the piss… the £40k extra pit down will literally save you £80k in interest! Just take the mortgage over a shorter period so you can put money away later for retirement