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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

AIBU to ask for a chunk of inheritance now?

185 replies

Monkeywhisk · 13/06/2015 12:18

My husband and our nine month old baby are currently living with my parents. They own two homes in a very sought after area, and we live in a basement flat of one of the properties.

The flat has very little natural day light and is open plan so it's becoming very difficult in the evenings as baby goes to bed early and we try and have some time to ourselves without waking her.

We don't pay rent but we do pay for all our bills- I totally appreciate we're very lucky indeed to be in this situation.

After saving since I found I was expecting we are looking to buy our first home together. We're looking to move out of London as that's all we can afford.

We're coming up short (at least £20k) in terms of the deposit but we have been approved for a mortgage.

My parents have over £100k in premium bonds as well as a lucrative income from renting one of their properties. They have a good standard of living themselves but are of the generation that are careful with money (and as they're now in their 70's they rarely spend a lot of money on themselves on holidays or eating out etc which my siblings and I always encourage they do)

AIBU to ask my parents for a portion of my inheritance to help get on the property ladder? In this case money isn't really an issue but my mother doesn't want us to move out as she'll miss us. I have assured her that we'll visit lots and spend quality time together but she's used to getting her own way and isn't happy at all and sulks when I bring the subject up. She is very controlling.

OP posts:
StickyFloor · 13/06/2015 13:01

Have you had legal advice re the tax position on the properties?

For inheritance tax purposes, it is not possible to just sign a property into children's names to avoid the IHT and then carry on treating it as the parents' in every other sense. Any rental income is income for the owners and the owners ie you and your siblings should be paying tax on it.

Also, unless the parents are paying rent themselves to live in what is legally now your house then I don't think that will avoid IHT either.

merrymouse · 13/06/2015 13:02

Bad lad they haven't given me a house- it's theirs- they own two houses, rent one out completely and receive all the rental income and the other they live in and I live in basement flat.

No, they have either given you a house or they are fraudulently trying to evade tax.

If that Is how they manage their affairs I would not be banking on an inheritance and I would be assuming that sorting out their affairs will be quite complicated.

SantasLittleMonkeyButler · 13/06/2015 13:03

I like a pp's suggestion - work out what your likely mortgage will be on the size/value of property you are after (there are tools online to help if needed) and start "paying" that each month into your savings account.

It will help you both workout whether you can afford to buy at all on one income - and also help you to save a deposit. No dipping it to it though! You need to be able to afford your monthly mortgage and have a contingency plan for any unexpected costs that may arise month to month. It can be very difficult to manage without.

And, yes, your DP's money is their money. It does not become your inheritance until they have both passed away & whomever holds their will reads it & confirms it to be yours. But I think you know that now Wink.

Original poster
Monkeywhisk · 13/06/2015 13:04

Thechandler they have a lot of money in the bank (almost £200k) and another £120k in premium bonds. But after hearing from everyone here I do appreciate it's their money and is for their retirement.

OP posts:
The5DayChicken · 13/06/2015 13:04

If your mother won't answer the question and gets evasive when you ask, IMO she's already making it clear she doesn't want to give you your inheritance before she and your father are gone.

And FWIW, you might be calling her controlling but she's extremely generous to allow you to live rent free and she obviously enjoys spending time with you and your family.

You're the one who's broached the subject of getting your inheritance before your parents are gone. I think really a discussion like that should be instigated by your parents without coercion from you.

StickyFloor · 13/06/2015 13:04

Sorry, cross post, you declared rental income to mortgage company but not to HMRC. This is potentially either falsely obtaining a mortgage, or failing to declare income for tax purposes. Very messy.

LapsedTwentysomething · 13/06/2015 13:05

Why is it you who's paying back the wedding loan and saving for a deposit? Why can't you husband work too? He seems to be living very easily out of all this.

TBH, if what other posters are saying about you tax liability on the property that has been signed over to you is the case, then I would be insisting on either living in it or keeping the rental income and paying your own rent or mortgage from that. You can't all have it all ways and still pay no tax.

Only1scoop · 13/06/2015 13:06

Yabu

You live rent free

Save it

Floggingmolly · 13/06/2015 13:06

Your parents have given you a home to live in rent free, and you're considering asking them to help you out with the deposit to buy somewhere; as due to your DH giving up work you'll find it difficult to save enough yourself...
You are absolutely fucking unbelievable Shock

merrymouse · 13/06/2015 13:06

But after hearing from everyone here I do appreciate it's their money and is for their retirement.

I suspect you might need it all to pay HMRC.

Original poster
Monkeywhisk · 13/06/2015 13:09

I've worked out a budget for us to live by each month and will save the mortgage repayment till we reach the £30 k which will be deposit plus contingency plan. Is it worth getting mortgage insurance in anyone's experience?

OP posts:
Only1scoop · 13/06/2015 13:09

So many of these 'inheritance' threads lately. It only become 'your inheritance' when you inherit. Of course you can't ask them for a slice of your 'inheritance' if they wanted to give you a loan they would offer Confused

Awful

CMon · 13/06/2015 13:10

HERE is the Gov.Uk info on inheritance tax and homes. Unless you are willing to lie and take a chance on not being caught then you will have to pay inheritence tax on 'your' house.

BTW have you posted about this before.

The5DayChicken · 13/06/2015 13:11

Oh God, I just read on.

They've already given you a property.
They're allowing you to live rent free.
And they gave you a loan for your wedding.

And now you want more money from them. That you don't want to have to pay back (or you'd be asking for a loan.)

No wonder your DM gets evasive when you start asking. You're treating them like a cash cow.

merrymouse · 13/06/2015 13:12

Monkeywhisk sorry to shout but

MASSIVE TAX EVASION PROBLEM!!!

mortgage insurance is not the most pressing thing you need to sort out.

merrymouse · 13/06/2015 13:13

I honestly think your DM is being evasive because their financial affairs are a little dodgy, not because she doesn't want to help you.

Original poster
Monkeywhisk · 13/06/2015 13:13

Stuckyfloor everything is declared to the government- the rental incomes etc. I just don't receive it- and tax is paid by them. Tbh that's all I know. Sounds like a mess from what everyone is saying that I'll have to sort out one day.

If my husband works we'll have to sort childcare and as he's pretty much unskilled it won't be that much difference in terms of income?!

OP posts:
ThreeQuartersEmpty · 13/06/2015 13:15

I think you are looking at a large tax bill. Not your parents, you.
The house is in your name and tax is not being paid on income from it. You are liable for that tax. I'd start saving for that eventuality rather than a deposit.
You'll end up with a husband who doesn't work, a mortgage to pay, and a large tax bill.
I think your parents have been very badly advised in terms of tax.

Mumblechum1 · 13/06/2015 13:15

Yep. Your parents have obviously transferred the properties to you to avoid IHT being payable (they'd have to survive for 7 years after the transfer), but they've messed up as they've still got the benefit of the income. Also if I understand correctly, their home is also in your name? They'd have to be paying market rent for that to be treated as a potentially exempt transfer.

Their attempts at avoiding IHT are not going to work as they haven't followed the rules.

peggyundercrackers · 13/06/2015 13:17

Tbh I think you need to learn to live within your budget. Your already owed your parents money for your wedding, your DH wants to be a sahd, though not sure how you can afford that. you are only able to live the way you do because your parents already give you so much. I think you need to come into the real world.

Agree with the others when they mention hmrc - sounds like you are just storing up lots of trouble ahead given the way you are dealing with things.

ilovesooty · 13/06/2015 13:18

I think the house deposit sounds the least of your potential problems.

SantasLittleMonkeyButler · 13/06/2015 13:20

Further to my previous comment (and totally sidestepping the tax issue, as I don't pretend to understand how it works) - how sure are you that you can afford to pay a mortgage?

I ask as I do actually have a friend in a similar position - her parents are wealthy, they own three houses, one they live in, one friend's DB lives in & one that friend lives in. Friend & her DP have 6 DCs and have outgrown their house. Friend wants her DPs to allow her to sell her house (it is still in her DM's name legally) and use the proceeds as a deposit on a much larger house.

Friend's parents are saying no and friend is outraged by this. However, they are saying "no" because friend currently lives mortgage/rent free in a small house with small utility bills and, despite a decent monthly income, regularly goes cap in hand to her parents to borrow money "until payday". Basically, they are refusing to "help" because they don't believe she (and her DP) can afford the mortgage even though they have offers in principle.

Could your parents have similar worries, as you are only just finishing maternity leave & your DH is becoming a SAHD? Maybe that is why your usually generous parents are trying to avoid this subject just now.

DinosaursRoar · 13/06/2015 13:22

OP - are you the legal owner of one of "their" properties already? Then can you talk to the mortgage provider about securing a loan against both the property you would be buying to live in and the one you own outright already? I'm sure you could release the equity in that property without needing your parents consent if they no longer own the house, but you do.

I'd also get some advice regarding how the HMRC would view you owning a house but the rent not being paid to you. You might well find yourself in an expensive situation, but not having been the one who recieved the rent to pay for it.

Also re the premium bonds, you said its £30k per family member, does that mean that also you own the premium bonds? Again, could you just cash them in without your parents consent if they are yours?

By putting things in your name, your parents no longer own those things. You don't need permission from them to sell something that belongs to you. I would be pointing that out to your mum. She might like to control situations (which is not surprising if she's trying to control how much tax she needs to pay rather than just accept it), but you don't have to let her.

Mind you, I'd be giving the tenants in the house that I own notice to leave and moving in myself if I owned a house outright but was living in cramped conditions. Do the tenants realise that their tenancy agreement is with someone who doesn't actually own the property and has no legal right to rent it out to them? I would be very upset to discover that if I was them...

CMon · 13/06/2015 13:23

If you are one of the executioners of the will YOU will have to sign the inheretance tax form declaration. YOU would be the one committing fraud.

amothersplaceisinthewrong · 13/06/2015 13:24

Have not read all this, but how can your parents have £100K in premium bondsd. The maxium is £30K per person.

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