How much money can you give away ?

learjet
learjet Posts: 15 Forumite
First Post First Anniversary Combo Breaker
in Cutting tax
Hi,

My old Mum is 76, lives on her on in her own home on the state pension plus about £15 a week from a private pension. She doesn't get any benefits because she was silly enough to scrimp and save all her life and has about £35000 in the building society.

Is there a way to legally reduce this savings level so she can qualify for benefits ? (below £16000 I think). I was thinking she could give, say, £20000 to me and/or my sister. Any legal or tax implications here ?

Her house is worth only £140000 so there are no IHT implications here.

Thanks for any advice you can give.

LJ
«13

Comments

  • dunstonh
    dunstonh Posts: 116,307 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Is there a way to legally reduce this savings level so she can qualify for benefits ?

    No. Its called deprivation of assets and is considered benefits fraud.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • RayWolfe
    RayWolfe Posts: 3,045 Forumite
    Combo Breaker First Post
    learjet wrote: »
    Is there a way to legally reduce this savings level so she can qualify for benefits ? (below £16000 I think). I was thinking she could give, say, £20000 to me and/or my sister. Any legal or tax implications here ?
    What a splendid idea!
    You get £20,000 and my taxes pay for benefits to your mum.
    No wonder I've become a grumpy old man.
    Stroll on!
  • learjet
    learjet Posts: 15 Forumite
    First Post First Anniversary Combo Breaker
    dunstonh wrote: »
    No. Its called deprivation of assets and is considered benefits fraud.

    Ah. Ok - this is why I was checking. Thanks.

    Presumably she is entitled to give gifts of cash to her immediate family if she wishes though ?

    LJ
  • learjet
    learjet Posts: 15 Forumite
    First Post First Anniversary Combo Breaker
    RayWolfe wrote: »
    What a splendid idea!
    That's what I thought :T
    RayWolfe wrote: »
    You get £20,000 and my taxes pay for benefits to your mum.

    My taxes too. As part of a childless couple I suspect I pay for most peoples benefits and children without getting anything back. Just thought that if a couple on £50k with kids can get help then my Mum deserved a bit of the cake too. [/quote]
    RayWolfe wrote: »
    No wonder I've become a grumpy old man.

    Me too :angry:
  • RayWolfe
    RayWolfe Posts: 3,045 Forumite
    Combo Breaker First Post
    Except it is YOU getting the cake whilst your mother queues in the benefits office.
    Think about who is benefiting in your proposition ... it ain't your ma, it's you!
  • dunstonh
    dunstonh Posts: 116,307 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Presumably she is entitled to give gifts of cash to her immediate family if she wishes though ?

    No. Its still deprivation of assets. Small gifts arent going to raise any eyebrows but large gifts would.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Joe_Bloggs
    Joe_Bloggs Posts: 4,535 Forumite
    I have the same question but the circumstances are different. How much cash, say a Christmas gift , can I give to family members without it affecting their tax and benefit status. Is there a threshold for declaring received gifts ?
    J_B.
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    learjet wrote: »
    Hi,

    My old Mum is 76, lives on her on in her own home on the state pension plus about £15 a week from a private pension. She doesn't get any benefits because she was silly enough to scrimp and save all her life and has about £35000 in the building society.

    She probably - as they used to say - saved for a rainy day. She could take the view that the 'rainy day' has already arrived and enjoy herself a little.

    DH and I, aged 73, are still saving although far from 'scrimping'. Saving enabled us to have a lovely holiday in September when we really didn't stint, stayed in lovely places, didn't do it 'on the cheap'. We couldn't have done that without savings.

    Now another downpour has hit us and the heavens have opened. DH nearly died last week. It's quite likely that he's going to have a permanently stiff knee and I'm just looking into the possibility of our local builder putting in a walk-in shower rather than the step-in we already have. That will take money. Again, we couldn't contemplate it if we didn't have savings!
    Is there a way to legally reduce this savings level so she can qualify for benefits ? (below £16000 I think). I was thinking she could give, say, £20000 to me and/or my sister. Any legal or tax implications here ?

    This kind of suggestion makes me see red. This money is your Mum's and she doesn't know what she may need in years to come! Remember she could easily live another 20 years in comfort - what happens if she needs the kind of home improvements that we're contemplating, where would she get the cost to pay for them when she's given all her hard-earned savings to you and your sister!

    What her house is worth, or isn't worth, is irrelevant in the present climate. Any house is only worth what someone else is prepared to pay. She could spend some money on doing some updating, just to make herself more comfortable against the time when she may become less able.

    Your Mum would find it humiliating to go cap-in-hand to the Benefits Agency when she has struggled all these years to stay independent. Do you really want her to have to cope with means-testing, intrusive questioning and the like?
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • lilac_lady
    lilac_lady Posts: 4,469 Forumite
    Why do people expect their parents to hand over money to them before the parents know if they'll need it or not? Your mother has no hassle with the DPW claiming benefits but you'd like her to start claiming so you and your and/or your sister can take her money. You may not like my comment but that's what you'd like to do.
    " The greatest wealth is to live content with little."

         Plato


  • moonrakerz
    moonrakerz Posts: 8,650 Forumite
    First Anniversary Combo Breaker First Post
    lilac_lady wrote: »
    Why do people expect their parents to hand over money to them before the parents know if they'll need it or not? Your mother has no hassle with the DPW claiming benefits but you'd like her to start claiming so you and your and/or your sister can take her money. You may not like my comment but that's what you'd like to do.

    Nail - head - hit .................. spot on !
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