Christmas Gifts – What Happens to Money that has been Gifted?
Published byBrittany Thomas
Christmas is often a season of generosity. For many families, gifts can go well beyond chocolates and warm, woollen jumpers. Parents may help with house deposits. Grandparents may give a lump sum. A relative may provide financial support to help a couple get on the property ladder.
At the time, these gifts will be given with love and the best of intentions. But, if a relationship breaks down, an important question often arises – what happens to that money if you divorce? Can you get it back?
In Scotland, the answer depends on a number of factors, including when the gift was given, who it was given to, and how it was used during the course of the marriage.
How finances are divided on divorce in Scotland – the basics
Under Scots Law, only matrimonial property is divided when a couple divorce. Matrimonial property includes assets acquired during the course of the marriage and up until the date of separation. Assets that fall outside this definition are usually excluded from being deemed matrimonial property and are therefore not included in the division. This distinction is crucial when it comes to gifts.
Are gifts automatically matrimonial property?
In Scotland, gifts from third parties (for example parents or other family members) are ordinarily treated as non-matrimonial property, but this is provided certain conditions are met.
In broad terms, a gift made to one spouse only will likely be excluded from being deemed as matrimonial property. A gift made before the marriage would also usually be excluded. And, a gift received during the course of the marriage may or may not be included, depending on how it was given and then used. As with most cases in Scotland, each case turns on its own facts.
Therefore, it may be helpful to look at an example. Given that Christmas has just passed, imagine a scenario where one spouse’s parents have given £25,000 to help with a future house purchase. The money is transferred into that spouse’s sole bank account (but never used) and is clearly described as a gift to their child. If the couple later divorce, that money is more likely to be credited back to that spouse, particularly if the intention was for the gift to benefit only one of the spouses, the funds can be clearly traced and there is evidence such as a letter or bank reference confirming it was a gift, and not a loan. However, the position can change depending on what happens next.
When gifts become matrimonial property.
A common issue arises when gifted money is then used for joint purposes. Or, the funds are mixed with other marital finances. In these scenarios, the gift may lose its status as being non-matrimonial and may become matrimonial either wholly or in part.
The family home - a common issue.
Many disputes around gifts arise around the family home. Even if the house deposit originally came from one spouse’s parents, if the property was purchased during the marriage and is jointly owned then the value of the home will usually be treated in its entirety as matrimonial property. It will then be divided fairly, which ultimately means equally. However, the court will take account of a source of funds of the deposit in some circumstances, but there is no automatic right for one spouse to simply just get their gift back.
Does intention matter?
Yes, intention can be very important. If a third party intended the money to benefit one spouse only, this can support an argument that the gift should be excluded from the division. Helpful evidence can include a written note or letter from a person making the gift. Clear wording on bank transfers, or loan agreements (where money was not intended as a gift). Unfortunately, many families only realise the importance of this after separation, when evidence can be harder to obtain.
Planning ahead – protecting family gifts.
While no one gives Christmas gifts expecting divorce, there are sensible steps that can help protect these family contributions as much as possible. These can include:-
• Keep gifted funds separate where possible
• Document intention at the time the gift is made
• Consider whether a Pre-Nuptial or Post-Nuptial Agreement is appropriate
• Take legal advice before using gifted funds for major purchases
These steps can provide clarity and reduce the risk of conflict later on.
Final Thought.
Money given with love can become a source of stress if relationships break down. Understanding how Scots Law treats third party gifts can help manage expectations and avoid unnecessary disputes at an already difficult time. If you have received, or are expecting to receive, a significant gift from family and want to understand how it may be treated on divorce, taking early advice can make all of the difference. Therefore, please get in touch with a member of our team to discuss this further.
The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at January 2026. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 319 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.
