AIBU to offer friend big chunk of money?

[Marven]

Difficult one... I've just come into some money. I already own my house, have two kids and a bit of savings. Mine and my partners families are reasonably well off, and so I know the kids will also be thought of by their grandparents.
This lump of money will give me some to upgrade the house and some to put away for the future.

I'm thinking of giving like £50-80k to my friend... How do I handle that and would you be offended if your friend tried to give you money?

My friend - we used to be close at uni, but live far apart now and life and family get in the way, but still keep in touch and see each other every few years. Last time I saw her she'd had to move rented accomodation again and was saying how shs didn't know if she'd ever be able to buy. Her family is not well off and they'd promised her some money for a deposit, but had then gone and given it all to her brother with nothing left for her! She works hard, travels a fair bit, but she just hasn't had the really fortunate start that I have in life.

If I gave her the money, I would have no expectation about what she did with it, although her talking about buying a house was what sparked this idea for me. I honestly wouldn't care. She's had a tough life and she deserves whatever she wants and however she wants to live her life. I just think that this £50-80k would make a much bigger difference to her life than to mine.

We don't live in the same area - she's up north so I'm hoping that money could be a useful deposit?

How would you broach it, or would you just be totally offended by it?

Any gift over £3k will incur gift tax.

Just me and my opinion now but unless you have inherited over 1 million if it was me, I would not do it and if I found out later in life that my mum had done this, depending on how my life was going, I think I would be a bit miffed.
For start you say you haven’t seen this friend in years how do you know she hasn’t already brought a house or had a promotion or doing great in life? If she travels maybe she has funds but she just chooses not to spend them in that way, maybe she was just moaning about not being able to buy a house just as friends moan to each other about life. Perhaps it’s not that important to her if she does travel all the time, could your children go to private school for that money or have tutors or have their own home deposits or have university paid for them? What if your family needed expensive medical work or you and your husband were injured and needed to retire early. You just never know what the future holds.
also you are just assuming what your parents and in-laws have planned they may be giving a lot to charity they themselves may fall ill. I need to use it. They may need to pay for care homes for 20 years. Imagine giving that money away and then in 15 years time when your children are trying to save to buy a house, there’s nothing left because it’s been spent paying for granny to be in a care home for the last 10 years. You would be kicking yourself that you had spent that money on your friend and not your children.

I'm sorry but your absolutely crazy to even consider doing this what if you need the money down the line?
Seems utterly bizarre

We got in my previous post where I said unless you’ve inherited 1,000,000+ don’t do it actually I think unless even inherited 2+ million don’t do it unfortunately we have no idea what the future holds

It’s inheritance tax, there’s no such thing as gift tax. And there’s no tax implication at all if you live for seven years after you gave it.

If I was your friend I would be very grateful and it would change my life. I have a few friends who have done wonderful things for me and I will always love and appreciate them for it. I don’t know why people are being so negative!

Whilst I think it’s very generous of you I think she might be overwhelmed by it. I’d give £25k max and say it was a small percentage of a considerable windfall. I wouldn’t use the lotto story coz it’s a lie and lies get found out. Do u know if she has savings-maybe £25k on top of any savings she may be could be enough for a deposit?

Wrong. There’s an annual gift tax exemption of £3k, which is nothing to do with dying or inheritance. Income tax applies if £3k is esceeded.

I’m afraid it’s you who’s wrong.

You do not pay tax on a cash gift, but you may have to pay tax on any income that the cash gift generates. For example, if you place the cash gift in a bank or building society account, you may have to pay tax on the interest you earn on that account.

What a lovely person you are. I don’t know why so many people are saying don’t do it,I don’t see why not. You know what you’re doing, sounds like your friend would be truly grateful. I wish I was your friend 🤣🤣

@Marven there's a really interesting discussion topic around 'what difference would a gift of £20,000 make to your life?'

For some people in great debt or managing on the breadline it may (sadly) make no difference at all. They may still be in debt (making little difference to day-to-day life). If they are on benefits, they may risk losing benefits until they've spent enough so that their savings reduce.

For some (like yourself) another £20K might just go in the bank. OK you might spend some on a something nice, but probably not anything you couldn't have bought anyway.

But for many - and it sounds like your friend is in this category - the gift you might make would be potentially life changing. It enable people to learn a new skill, start a business, own their own home...

I really hope you find a way to do this, and to do it in a way that preserves your friendship. You are a star.

i don’t understand the comments about this ruining the friendship! you’ve been lucky enough to get this and its wonderful that you’re thinking of your friend, for whom this can make a real difference. You do need to ensure you have no expectations on how the money is spent and that she’s clear there are no strings attached.

After that, just be honest. Explain that you’ve come into the money unexpectedly and set some aside for your nearest, would love to spread the joy and make sure people you care about are taken care of!

What an amazing life changing gift!

I don't understand all the comments about risking the friendship. If it's given in the right way making it absolutely clear that's it's a gift with zero strings or expectations and she can do whatever she pleases with the money, then why would it.

If someone gifted me £50k it would literally change my life in ways many people can't imagine. I would be forever grateful and it would not change a true friendship. Brits are really funny about money - it's out history (a whole other thread!).

Definitely get financial advice so as to minimise any potential negative impact on your friend, and to maximise what's she keeps and what goes to the tax man etc

What a wonderful thing you're doing.

Thanks for clarifying my misunderstanding BlossomToes. I also understand that £3k is the limit which can be annually gifted without it affecting the value of one’s estate.

Nothing wrong with giving away money - except you will lose the friendship.

The dynamics change when one person must feel beholden to another - it builds resentment.

You be far better offering the money as a deposit on a house/flat - but whatever the percentage cost of the house it will be, that same percentage value of the house that will be inherited by your children when you and your husband both die, or in 20years, whichever date is last.

To give your friend a 20 year peace of mind.

You can then always leave your share of the property to your friend in your will.

Because you do care what she does with the money. You'd be very disappointed if she went on a 2-year massive holiday and came back poor as a church mouse. You want to give her security.

Only if you die seven years or less after you’ve given it. After that it’s out of your estate. I have another 15 months before a gift I made is free and clear.

Can I be your friend 😂

I think it's an amazingly lovely thing to do. I am prob in friend's situ and to me it would also be life changing. Could you maybe offer to pay the deposit on a house so it's used for that specific purchase? Some new build houses have schemes where they double what a friend or family give..so you could give less but she'd have same towards a house.
I think it's a lovely thing to do..and I would do it for a friend if I could.

Thank you everyone for the continued insight! I will definitely speak to financial advisor re any implications for her receiving it before I offer and I'll scope my friend out for if she is actually interested in buying somewhere because yes it's possible that she'd rather not have the pressure etc of a house. I think she wants to buy and be settled somewhere though.

It might also help her if she wants to work part time due to her health issues as stress might be taken off. But definitely finding out about any benefits she's entitled to is a good idea, and I will look up banks accepting gifted deposits - thank you to the posters who have mentioned that.

To those speculating on my finances and assets - this particular windfall is ten times more than the amount I'm thinking of giving to my friend. The person who gave it to me may well not be happy with my plans for the money - but that doesn't necessarily make him right. And like I intend to do, money shouldn't be given of it's not without strings, so tough if he wouldn't like it.

And yes one day I might have found multiple ways for me or my family to have spent it, but the fact remains that we will have already had so much more than my friend is likely to ever have. So will I regret having a bit less and her having a bit more?

I know the total of my assets doesn't make me invincible, but crikey, in what world is what I have not enough to share?!

I wouldn't be upset if a friend offered me 50k.

I absolutely think you should do it, you seem like you have good motives for doing so and it will change her life! I also think you should tell her the truth, going into it with honesty and kindness is always the way forward.

Oh stop it, it's not her children's money.

Would an option be to......

buy a (no strings) share in a house of her choice, so she could perhaps find enough deposit to put down and get a mortgage in her name, with the proviso she chooses when to cash up/upgrade/move, so you either get your money back or continue your investment.

That way the money doesn't change hands, so she's not directly in receipt of a cash gift .

And you can make provision in your will for her to inherit your share.

You have a very kind and thoughful heart.

That’s lovely OP. My grandma always used to say ‘give with a warm hand’ - it meant two things; to give before you die so you see people enjoy it, and to give with love and no expectation of how it will be spent.

I would call her the truth, that you value and and appreciate her friendship, that you have come into a modest amount of money and wish to share it with her. There is always a risk to your friendship but similarly, the opportunity to change the course of someone’s life probably outweighs the risk.