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How much money can you give away ?
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# 1
learjet
Old 21-10-2008, 12:39 PM
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Default How much money can you give away ?

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
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# 2
dunstonh
Old 21-10-2008, 12:44 PM
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Quote:
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 a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 3
RayWolfe
Old 21-10-2008, 3:34 PM
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Quote:
Originally Posted by learjet View Post
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!
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# 4
learjet
Old 21-10-2008, 3:48 PM
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Originally Posted by dunstonh View Post
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
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# 5
learjet
Old 21-10-2008, 3:54 PM
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Quote:
Originally Posted by RayWolfe View Post
What a splendid idea!
That's what I thought

Quote:
Originally Posted by RayWolfe View Post
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]

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No wonder I've become a grumpy old man.
Me too
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# 6
RayWolfe
Old 21-10-2008, 4:36 PM
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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!
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# 7
dunstonh
Old 21-10-2008, 5:36 PM
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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 a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 8
Joe_Bloggs
Old 21-10-2008, 6:18 PM
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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.
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# 9
margaretclare
Old 21-10-2008, 6:52 PM
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Quote:
Originally Posted by learjet View Post
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!

Quote:
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?
Ęr ic wisdom funde, ęr wearš ic eald.
Before I found wisdom, I became old.
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# 10
lilac_lady
Old 21-10-2008, 6:57 PM
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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.
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# 11
moonrakerz
Old 21-10-2008, 7:07 PM
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Originally Posted by lilac_lady View Post
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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# 12
dunstonh
Old 22-10-2008, 9:37 AM
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Quote:
Now it’s only a guess but if the learjet’s mother lives in a house that is currently worth £140,000 she wouldn’t exactly be living in the posh side of the town where I live.
Thats a 3 bedroom semi-detached house in a nice area round here.
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# 13
Any
Old 22-10-2008, 9:43 AM
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Originally Posted by jimmo View Post
Now it’s only a guess but if the learjet’s mother lives in a house that is currently worth £140,000 she wouldn’t exactly be living in the posh side of the town where I live.
No idea where you live but I live in posh village near big town in family house and even here you can get a house for £140k (and I guess she doesn't have a big house as she doesn't need it).
Council houses you pick up for £50k... at least around here...
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# 14
RayWolfe
Old 22-10-2008, 11:31 AM
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Believe me, when you see neighbours who have never worked and never even paid the rent, jetting off to the Costas or the Canaries 3 or 4 times a year you do begin to wonder.
Really?
I should get on to the Daily Mail about that. They will certainly be very interested.
Meanwhile, even if it is entirely as you suggest, do you really think my 92 year old mother, on a small pension but self sufficient, should be paying even more on her council charge to support the OPs mother?
Interesting point of view.
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# 15
learjet
Old 22-10-2008, 12:39 PM
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Isn't it funny the way a thread takes off sometime

As far as I was concerned I asked a perfectly innocent question (maybe a dumb one but that's why the forum is here) and only dunstonh has taken the trouble to answer in a useful and factual way. Thank you dunstoneh.

I don't think all the sarcastic answers help at all especially the assumptions that I am trying to rip my Mum off. These posters have been reported.

As a matter of fact I have supported my Mum for years with regular lump sums, paying for holidays, repairs to her house, a new central heating system etc. and continue to do so. She lives at the other end of the country from me and I want to make sure she is happy. I take exception to the suggestion that I'm trying to get her money - I don't need it. I would have simply kept in the BS and let her have it when she wanted. Obviously I realise this is not allowed now - that's all I wanted to know.

Thanks to the helpful posters.

LJ
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# 16
RayWolfe
Old 22-10-2008, 3:04 PM
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An amazing high horse you have climbed. Well done.
From a position of asking how you could cheat the system (pretend that Mum has no money so that the tax payer can keep her), to one of the dutiful son with only her best intentions in mind.
Just think about your first question for 10 seconds and see how moral you were being then - regardless of whether your idea was legal or otherwise - and then ask yourself if your critics were being really harsh.
... as for reporting your detractors, how very sad. Bet you were really popular at school.
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# 17
Any
Old 22-10-2008, 3:52 PM
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Originally Posted by RayWolfe View Post
An amazing high horse you have climbed. Well done.
From a position of asking how you could cheat the system (pretend that Mum has no money so that the tax payer can keep her), to one of the dutiful son with only her best intentions in mind.
Just think about your first question for 10 seconds and see how moral you were being then - regardless of whether your idea was legal or otherwise - and then ask yourself if your critics were being really harsh.
... as for reporting your detractors, how very sad. Bet you were really popular at school.
This is a post straight to the point
You should be a lawyer.
I agree with everything you just said.
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# 18
custardy
Old 22-10-2008, 3:58 PM
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Originally Posted by Any View Post
No idea where you live but I live in posh village near big town in family house and even here you can get a house for £140k (and I guess she doesn't have a big house as she doesn't need it).
Council houses you pick up for £50k... at least around here...
2 bed tenement flat in edinburgh,not in the posher areas though!
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# 19
Any
Old 22-10-2008, 4:03 PM
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Originally Posted by learjet View Post

I don't think all the sarcastic answers help at all especially the assumptions that I am trying to rip my Mum off. These posters have been reported.

LJ
Ermmmm, what exactly have you reported them for? For having an opinion?
Sorry, I thought that is the whole idea of a forum....

Watch out, watch out, planning to scam a government but is reporting people who object!!!:confused:
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# 20
JimmyTheWig
Old 22-10-2008, 4:21 PM
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I must say that I got the impression from the OP that the idea was to rip offgain from the benefits system, rather than to rip off his mum.

Good advice from dunstonh, as usual.


How about this as a practical suggestion...
How much savings does your mum actually need?
What if she spent the next however long eating away at her savings? Yes, I'm sure she oculd buy some reasonably generous gifts for you and your sister, but more importantly buy stuff for herself. Get stuff done around her house to prepare for the future. E.g. get the garden redesigned to make it low maintenance which will help as she becomes less mobile. Have a downstairs bathroom put in, for example. Or maybe a stair lift? And just generally enjoy the savings that she has built up.
Then when she's down within the limit she could claim benefits.

That may leave her slightly outside of her comfort zone in terms of savings. But then it's a good job she's got a son who can afford a few quid to help her out if things get desperate. (And given the fact that you could get the money back at the end of the day from the house sale I'm guessing means that you could afford to lend her £20k if need be.)

How does that sound, OP? Do you think your mum wuold like the idea?
How does it sound from a legal POV, others?


Alternatively, could she buy an annuity with £20k? I.e. something that pays out monthly for life? At 76 she should get a decent monthly return.
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