Gifted deposit query

bubblegum1986

Hello. A year ago my Father “gifted” me a large sum of money towards my new home. It was given with no expectation to repay and we filled in the gifted deposit form with my mortgage provider to confirm this. However, I’m now in a financial position to be able to repay this and was going to start making monthly payments to do so. He is retired and concerned this will flag up issues with HMRC so had thought about me setting up a joint account with my Mum so they can access the money from there. However, I receive universal credits and am concerned this will affect my eligibility for this, as well as affecting my credit rating if I’m financially tied to another person? (I’m divorced so I did have financial ties to my ex husband before and he still appears on my credit file). As far as I can tell, the money I’d be sending back to my Father is counted as gifts and would only affect my inheritance tax rules should something happen to me within 7 years. Is this correct? I’d be making the payments for just under 4 years with no interest charges. 

Thank you in advance 

itsthelittlethings

What kind of issues would it cause with HMRC? Money from family, whether repayment of a loan or not, would not be counted as income.

Keep_pedalling

The the danger is the potential impact on his estate, it clearly a gift so it remains part of his estate so if you pay this back and he dies within 7 years of the original gift then this is going to double count in anticipation IHT calculation. 

If I was in his position and my estate was already in or near IHT territory then I would want the gift to remain a gift. Our children have both been gifted substancial sums over the years and if we got that back all that would happen is that we would not spend it and they would only get 60% of it back on our deaths. In any case the best thing about gifting is seeing your excess wealth being put to good use in your lifetime. 

If on the other hand he is financially strapped then it would be a good thing to return the favour.

bubblegum1986

itsthelittlethings said:

What kind of issues would it cause with HMRC? Money from family, whether repayment of a loan or not, would not be counted as income.

This was my thinking too so that’s reassuring to know, thank you. 

bubblegum1986

Keep_pedalling said:

The the danger is the potential impact on his estate, it clearly a gift so it remains part of his estate so if you pay this back and he dies within 7 years of the original gift then this is going to double count in anticipation IHT calculation. 

If I was in his position and my estate was already in or near IHT territory then I would want the gift to remain a gift. Our children have both been gifted substancial sums over the years and if we got that back all that would happen is that we would not spend it and they would only get 60% of it back on our deaths. In any case the best thing about gifting is seeing your excess wealth being put to good use in your lifetime. 

If on the other hand he is financially strapped then it would be a good thing to return the favour.

Thank you ☺️ 

itsthelittlethings

bubblegum1986 said:

itsthelittlethings said:

What kind of issues would it cause with HMRC? Money from family, whether repayment of a loan or not, would not be counted as income.

This was my thinking too so that’s reassuring to know, thank you. 

On the other hand, if you have a joint account and are on UC it might get tricky.

silvercar

I’ll move this to the mortgage board.