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?

How am I doubling down?! Someone suggested a holiday. Fair. Someone said waste of money. I disagree that holidays are a waste of money.

What do you think I have double downed on?

So if your mum's ambivalent about giving the gift and normally "very tight about money", how's it going to work if you later spend some of your own on something she wouldn't approve of?

I get the money would be lovely to have, but the shine could come off pretty fast if you have to watch every future purchase for fear of hearing "I don't know why we bothered"

Have you/they considered the tax implications? You can't just gift someone 40k without paying a ton of tax on everything above £3k. May not be worth it if you don't actually need it.

There's a lot of misinformation on this thread.

The first £3K a year is without tax implications.

Anything over that amount can be added to your estate as part of the value, for IHT IF you die within 7 years of gifting . Then your beneficiaries would lose 40% for any amount over the threshold.

However- and this is not so well known- you c an give ANY amount away annually, IF IT IS FROM YOUR INCOME , but not your SAVINGS.

(Because taking it from savings looks like running down the pot to avoid IHT - if you die within 7 years.)

So parents who are working or have a retirement INCOME ( a pension) can give away as much as they want as long as they can prove (and keep records) to show it's from income (not savings.)

OP, if you want to be truthful,to your parents then maybe you could be together some facts and figures before you talk with them. As you know the difference that an extra £40k would make to your mortgage would be huge. Maybe if you gave them these details when you speak to them it might help them work out if they still want to give you the money.

I think it's sad so many posters would feel comfortable lying to their parents about something like this. Even if it is lying by omission.

People are banging on about inheritance tax but less than 4% of estates in England and Wales paid any in 2022 (admittedly that figure is going up but still)

I think it's sad so many posters would feel comfortable lying to their parents about something like this. Even if it is lying by omission.

I agree and can't imagine this, as a parent.

When my DCs bought their first homes, we knew what their budgets were.
We discussed their deposits and the current interest rates and mortgage payments.
We offered gifts on the basis of what we could afford , without leaving ourselves short, but which would make a difference to what they could buy.

If they had lies- even by omission - I'd feel hurt, although it wouldn't have changed what we did.

It’ll go up a lot over the coming years. Many people’s house takes up their entire IHT allowance now.

Only if they die within 7 years.

https://www.raisin.co.uk/taxes/gifting-money-to-children/

I do worry about that

“she could spend it back on them”
You are being ridiculous. In fact, this is probably one of the most ridiculous things I have read on Mumsnet! Do you seriously think her parents would be happy to be told that they are going to be treated to a holiday, paid for by themselves??

“If she doesn’t need it all” she should give it back to them, so they can spend it on what they want, not what the OP wants!

Literally wtaf

Hey
Seem to all agree then? And if I were your parents, I'd much rather you have your/some of your 'inheritance' when you needed it and it helped you...

It was a really dumb suggestion. Financially irresponsible too given the circumstances.

i’d come clean. If you can afford the house with the deposit you’ve saved then let them know. They might suggest you keep the 40k anyway so you don’t have to borrow as much. It wouldn’t sit right to me to not come clean. I’m in a similar boat but buying alone as a single parent. I’ve got 40k deposit and my mums offered me more if I need it to secure a flat / house but I won’t take it unless I needed it for a place I really wanted. Largely as I can’t afford to pay back a loan aswel as high interest rate mortgage (assuming it would be a loan, she might choose to give my brother the same as he’s wanting to move from flat to house as he’s got a young baby). If she said to keep it then I would as long as I was sure she could manage with rest of her savings

I would have thought that if the amount of money you already had was relevant to the amount they gave you they would have asked those questions. I think you can take the full amount with a clear conscience.

We have given both our D.C. gifts towards deposits and they will be other ones soon as they are now thinking of moving up the housing ladder. These are 100% unconditional. We don't pry into their finances. We just work out what we can afford to give them and hand it over. It might mean they can buy somewhere more expensive than their original budget or they might opt for a smaller mortgage.

Once we've handed the money over it's their business not ours. They are responsible adults and it's an absolute pleasure and privilege to be able to do this for them.

Well that's a different issue, if you think this gift has strings attached.

I don't think you should accept the money on false pretences or lie by omission to get it. If they are gifting you the money because they think its the only way you'll be able to buy a house, rather than for you to buy a house and have more money to enjoy, then that's up to them and you should respect that.
I also can't believe you're calling your mum 'tight" because she would 'only' gift you £40k if you needed it rather than just because you wanted it!

Take the gift that’s being offered. Use it along with your deposit to get the best possible deal you can on the mortgage. Whatever you save monthly on repayments should be put into a “rainy day” fund so that unexpected events, and you will have them, don’t end up leaving you stressed or in debt. You don’t say how old your children are but I’m guessing late primary/ early secondary? As they get older you will have money for extra curricular activities, school holidays, tutors, and all the other things late secondary brings …… and then there’s University, I have two finished and one to go next year. That’s not cheap!

I'd be SO pissed off if I gave £40K of my hard earned money to someone who I felt needed it to get on the housing ladder, and then they blew a quarter of it on a sodding holiday.

If she doesn't need it all, she should ask for a reduced amount instead.

Someone is jealous no-one offered them a 40k gift and is talking bollocks quite frankly.

Sorry, where is the part where the parents are giving the money because they NEED it? Genuinely missed that. I thought it was just because they wanted to give them a gift towards their house.

"In terms of strings my only fear that they made the gift because they were worried about our financial situation", the OP has said her mother worries about money. Therefore, it's reasonable to think as the OP is not yet on the property ladder, that the mum thinks they need the money, as she was "worried about our financial situation".

I also said "who I felt needed it" in regards to the comment I made, if it were my £40K, I didn't actually state that OP said she "needed" it.

I don’t understand the dilemma. Accept the gift and lower how much you borrow

They are probably trying to gift the money sooner rather than later so it can't be seen as deprivation of assets or stung on inheritance tax if they need care/die.

Take it, pay less mortgage and live a better family life.

@Notsurehwhattdo
Someone is jealous no-one offered them a 40k gift and is talking bollocks quite frankly

That's a snide reply. Are you like that in real life 🫤
I'm in the opposite situation actually and have been fortunate that I've been able to help my kids buy houses. 🤷🏻‍♀️. I've got a really great relationship with my kids and I'd be really sad if any of them did what posters are suggesting the OP does.

It's funny how threads on Mumsnet can go one way or another. I've seen many an OP roasted because they've dared to suggest that they are expecting an inheritance off their parents when they die.