Gift/Inheritance and Savings

iainmb

My mother recently received £103,000 in inheritance from an aunt.
She is in receipt of means tested state benefits and so would like to transfer it into an account in my name.
This would be a gift to me but does she need to put that in writing? Hopefully she won’t die in the next 7 years so does that mean that we will avoid paying inheritance tax?
Will we be liable for any tax?
We have looked at various savings accounts and ISAs but I want to ensure that we are doing this as above board as possible 
Is there anything else we need to consider? Any bureaucracy we should be aware of?

eskbanker

iainmb said:

My mother recently received £103,000 in inheritance from an aunt.
She is in receipt of means tested state benefits and so would like to transfer it into an account in my name.
This would be a gift to me but does she need to put that in writing? Hopefully she won’t die in the next 7 years so does that mean that we will avoid paying inheritance tax?
Will we be liable for any tax?
We have looked at various savings accounts and ISAs but I want to ensure that we are doing this as above board as possible 
Is there anything else we need to consider? Any bureaucracy we should be aware of?

Even if legal, do either of you consider it appropriate for her to be funded by the state while offloading a sizable sum that would be more than capable of doing the job instead?

Mojisola

iainmb said:

My mother recently received £103,000 in inheritance from an aunt.
She is in receipt of means tested state benefits and so would like to transfer it into an account in my name.

This is a clear case of deliberate deprivation of assets.

When the DWP find out about it, they will assess your mother as still having the inheritance and stop her means tested benefits.

If she's given the money to you, how will she pay her bills?

xylophone

I want to ensure that we are doing this as above board as possible 
Is there anything else we need to consider? Any bureaucracy we should be aware of?

https://www.moneyadviceservice.org.uk/en/articles/how-do-savings-and-lump-sum-pay-outs-affect-benefits
A clear case of deprivation of  capital in order to retain means tested benefits.

Albermarle

As above - gifting all the money so as to continue to receive means tested benefits is benefit fraud.
Of course if she stopped getting means tested benefits, she could  choose to gift you all or part of the money with no immediate issues.
If she was likely to be liable to pay inheritance tax on her estate after she died , then any gift above £3,000 ( I think) can be taken into account . Although if she died more than seven years after the gift it would not count and there is a sliding scale for less years than seven.

Mojisola

Albermarle said:

As above - gifting all the money so as to continue to receive means tested benefits is benefit fraud.
Of course if she stopped getting means tested benefits, she could  choose to gift you all or part of the money with no immediate issues.

But she wouldn't then be able to go back onto means tested benefits - the DWP would expect her to use the inheritance to live off for a reasonable length of time.

TemporaryUsernameMay2020

eskbanker said:

Even if legal, do either of you consider it appropriate for her to be funded by the state while offloading a sizable sum that would be more than capable of doing the job instead?

This is a very inappropriate response, IMHO. (The later replies, about "deprivation of assets", are helpful.)

The OP is asking for practical advice about their situation. We don't start questioning the morals of people who are making full use of pensions, ISAs, LISAs, etc, even if they are clearly doing very well financially and don't really need to save lots of tax, to the detriment of the public exchequer. But some posters are much more keen to question the morals of people claiming benefits. It's a double standard. We can discuss the merits of the tax and benefit systems in other threads, if we want to. But we shouldn't be judging posters asking for practical advice about how those systems apply in their situation.

eskbanker

gays_on_crack said:

eskbanker said:

Even if legal, do either of you consider it appropriate for her to be funded by the state while offloading a sizable sum that would be more than capable of doing the job instead?

This is a very inappropriate response, IMHO. (The later replies, about "deprivation of assets", are helpful.)

The OP is asking for practical advice about their situation. We don't start questioning the morals of people who are making full use of pensions, ISAs, LISAs, etc, even if they are clearly doing very well financially and don't really need to save lots of tax, to the detriment of the public exchequer. But some posters are much more keen to question the morals of people claiming benefits. It's a double standard. We can discuss the merits of the tax and benefit systems in other threads, if we want to. But we shouldn't be judging posters asking for practical advice about how those systems apply in their situation.

Bizarre overreaction that misses the point in so many ways!

In case you missed it, I wasn't "question[ing] the morals of people claiming benefits", I was questioning the morals of claiming benefits while simultaneously deliberately disposing of assets, albeit phrased in a different way from the subsequent posters.

Your reference to tax-efficient vehicles is irrelevant, in the same way that there's an important distinction between tax avoidance and evasion.

I make no apology for not answering the question in the way that OP wanted or expected, but if you feel that it's so important to do so then why don't you make constructive suggestions about the practicalities of exactly how to defraud the taxpayer?

DiamondLil

gays_on_crack said:

eskbanker said:

Even if legal, do either of you consider it appropriate for her to be funded by the state while offloading a sizable sum that would be more than capable of doing the job instead?

This is a very inappropriate response, IMHO. (The later replies, about "deprivation of assets", are helpful.)

The OP is asking for practical advice about their situation. We don't start questioning the morals of people who are making full use of pensions, ISAs, LISAs, etc, even if they are clearly doing very well financially and don't really need to save lots of tax, to the detriment of the public exchequer. But some posters are much more keen to question the morals of people claiming benefits. It's a double standard. We can discuss the merits of the tax and benefit systems in other threads, if we want to. But we shouldn't be judging posters asking for practical advice about how those systems apply in their situation.

I'm pretty sure that what the op's mother is intending to do is unlawful; in which case, what exactly do you feel would be an appropriate response ? It's nothing to do with morals and everything to do with law. I wonder how long this forum would last if folk could come here and receive great advice as to how to defraud the taxpayer ?

iainmb

iainmb said:

My mother recently received £103,000 in inheritance from an aunt.
She is in receipt of means tested state benefits and so would like to transfer it into an account in my name.
This would be a gift to me but does she need to put that in writing? Hopefully she won’t die in the next 7 years so does that mean that we will avoid paying inheritance tax?
Will we be liable for any tax?
We have looked at various savings accounts and ISAs but I want to ensure that we are doing this as above board as possible 
Is there anything else we need to consider? Any bureaucracy we should be aware of?

Hi everyone

thank you for the comments and advice.
to clarify it is not my or my mother’s intention to commit fraud I am just seeking some practical advice around what steps we can take, this is a really significant amount of money to us and we don’t want to do anything wrong.
i only mentioned the fact she is on benefits to add to the advice that could be given.

TemporaryUsernameMay2020

eskbanker made the first reply to the original question, and didn't even tell the OP that what they proposed was unlawful (which would have been a useful, if terse, response), nor explain why (which would have been even more useful). (Later replies have done both.) Instead, they suggested that the OP shouldn't do it even it was lawful. This didn't answer the question, and instead questioned the morality of the OP's proposed cause of action, despite the OP presumably not knowing it would be unlawful, and even saying that they wanted to ensure they were doing it "above board".

The time to criticize people for proposing to defraud the exchequer (to be picky, it is not defrauding the taxpayer, because public money is not taxpayers' money) is when people propose doing that knowing full well that that is what they would be doing, not when they ask about the legitimacy of a proposed cause of action and don't yet know that it would be defrauding the exchequer. My comments were in no way supportive of people defrauding the exchequer, whether via the tax system or the benefits system.

This jumping to the assumption that people are prepared to commit fraud happens much more frequently with benefits than with taxes. With tax questions, posters usually assume that people are trying to comply with the law unless and until they make it clear that they are not.