AIBU to ask for a chunk of inheritance now?

[Monkeywhisk]

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.

I think you are forgetting there might not be any . My mum is very wealthy ( dad is not with us anymore ) and has properties she rents and loads of money int this bank , a nice house etc.. She earns all of this herself and good on her .. My dad was poorly for a year before he died . His care in the home cost £75k... He died before the bills were too bad ( meant in the nicest way) but had he lived we would have paid it ans it could well have eventually used up her money . I also have a friend who's his mad had dementia and his care cost £1k a week ... So although they may be well off now it's no guarantee they will be when they die . I would never ask my mum for any money . You need to set your sights lower and move up to property ladder like we have on our own .

Bloody hell OP, the more I read the worse it gets.

Your parents are dealing very dodgily with their money and your family. I would not mind betting there will be serious repercussions for you and your siblings to sort out when they die, as this whole mess is far more complicated, and serious, than you seem to realise.
Frankly, I think they have you hoodwinked. They are controlling and because they seem so in control, you have naively assumed they are doing things for your benefit. But they have not been entirely up front with you about owenership of the houses. If YOU own, THEY should be paying you rent and YOU should be decalaring it as income and paying tax on it. How can you not see?

No wonder yr mother is evasive, she does not want you finding out all their dodgy doings!

You probably have said to much about your circumstances. It seems, unknowingly to you, your parents could land you in a whole heap of trouble. You are quite calm and forthcoming with such information I don't think you understand the consequences.

From a different perspective, it seems mean that you have these properties in your name, do not benefit from them what so ever, but cannot take advantage of home buyers schemes out their that would get you on the property ladder?

I think you need to seek some legal advice, but I'd take care who I divulged this info to, certainly not on a public forum.

MonkeyWhisk - pls ask questions of your parents and get some independent advice.

Although not completely clear, in one of your postsabove it read as if the tax on the rental was being paid to HMRC but in your name? If it isn't, apologies, but then the transfer of the properties to you and your siblings is at risk of successful challenge from HMRC, given your parents have the benefit of the use of the property and rent. If the rental income is being reported to HMRC in your name, the risks associated with a successful challenge are significant as give further evidence of tax evasion (as opposed to ineffective tax planning).

You say your parents are in their 70s so I am guessing you're not youngsters starting out. Tell me if I'm wrong but I am imaging you are at least 30.

I am really shocked at the level to which you appear to not be able to stand on your own feet - your parents paid for your wedding ( I appreciate you are paying them back but you said it was a few years ago) and allow you to live rent free.

So more help than most, yet you still can't afford a deposit - perhaps you shouldn't have borrowed the money for the wedding and prioritized a house? Just because your parents are wealthy, you currently aren't so you need to cut your cloth accordingly. being a stay at home parent is a luxury most people can't afford. Owning a home isn't an entitlement - it is something people (in most cases) work hard to do. My DP was 38 before he owned because that's the age at which he had managed to save up a deposit off his own back.

Seriously, time to stand on your own feet. Where is your pride and dignity? You are grown ups still relying on your parents - I'd have more sympathy if you were struggling but if that's the case why have a wedding that takes years to pay off, why have more children, why plan for DP to be a SAHD - all things that are nice to haves but not necessities. I really am shocked you would consider asking to borrow more money when you haven't paid off the last lot you borrowed off them.

You are very lucky in the sense that you know one day you will inherit what sounds like a lot of money, so in the end you will be okay - but that time isn't now.

I'll be honest and say that I am only on the property ladder because of inheritence but then my Mum died in her 50s - you seem to want the benefit of having your parents alive and the money! It doesn't work like that, it kills me to know the only reason I am financially okay is because my Mum died way before her time. I never expected a penny from her let alone asked when she was alive. At the time she told us she would be leaving us some money DP and I had already got a 15% deposit together and were in the process of buying a house. For what it's worth the inheritence I got is all I will ever get (still early 30s) and was peanuts compared to what you will one day get.

Seriously how about letting your parents enjoy their retirement without still having to support their grown up children? You've had more help than most - be frugal, get saving, and stop sponging off them. Sorry I know I'm harsh but you are living a lifestyle based your parent's money not what you and your DP currently have.

For new posters mentioning the Premium Bonds - OP has said that her DPs have 'got around' the problem by putting some in other names. So no more than £30k per person - but some in OPs name & her siblings too.

But still all owned and controlled by the DPs .

Owning a home isn't an entitlement

It is if you are the legal owner of the building.

So in summery - YABU to ask for more money from your parents.

But, YANBU if you say, cash in the £30k in premium bonds they have officially already given you (by putting it in your name), or borrow against the property you currently own that they 'gave' you, or indeed sell the property that you own in order to buy one that you prefer. Or suggest that you should recieve the rental income from the property you own in order to fund a better home for yourself.

By putting things in your name, your parents have legally given them to you already. This means you aren't entitled to some benefits, this has tax implications for you (and them!) and you are risking being accuse of tax fraud with them.

You need to get this all sorted out ASAP. And please don't just take their word for it that it's all fine, get legal advise now when you can do something about it, not wait until it's already a problem, the amount you'll end up paying out to solicitors now will be siginficantly less...

This is why I am convincing my kids that a wedding shouldn't be a big old bells and whistles affair!

10k for something that is really about you and your fiancé promising yourself to each other.

I'd put up and shut up for a couple of years and then buy somewhere when I could afford it.

Yep. Definite tax evasion here.

I'd be cashing in the premium bonds in my name to get the deposit if I were you.

Oh. And getting some sound legal advice

Bathtimefunkster - I was talking generally and the OP's general attitude in that she expects her parents just to fund her as if she is still a teenager but yes in the OP's case it sounds like legally she is entitled to the house. But that doesn't come without commitments - she'd also have to pay the mortgage and any repairs etc.

Tbh the whole thing sounds morally repugnant to me, parents who are evading tax to keep hold of more money & property than they clearly need and a daughter who wants a share of inheritance when her parents are still alive. Whilst I can't condone what the parents are doing, I don't see how the op can challenge the ownership or the premium bonds without causing a huge family rift. Legally they may be the OP's but she went along with the plan presumably to avoid paying tax in future so don't imagine her parents would take too kindly to her for example, cashing in the premium bonds or claiming ownership of the house, particularly when they have supported the OP's family to the extent they have already. She'd get the house but at what cost?

To be clear I'm not saying that the OP should carry on as is currently the case because as people have pointed out it could land her into trouble. But I couldn't imagine claiming a house for myself if I knew it was only in my name for tax purposes (which as I said before the OP went along with) when I hadn't paid a penny towards it. I'd be raising my concerns with my parents but with a view to transfer the ownership back rather than taking the house for mine to use towards a deposit as others have suggested. Likewise with the premium bonds - unless my parents wanted me to have the money I would be saying I wanted it taking out of my name rather than cashing it in.

I cannot quite work it all out.

It sounds like the parents owned a rental property whch they put into the children's name. That is perfectly lawful - to make a gift and extremely wise lawfully to avoid inheritance tax. Milliband did it. It's normal. So far so wise parents.... However it means if the property is sold you and your sibling will be the ones paying 28% capital gainst tax.

Then there is the issue of the rent. We do not know what the costs are on the perty. There may be no profit at all - my daughter made a loss on her flat when she let it out. We did too in the 80s in most years. So that all depends. If there is say £20k a month profit made then the owners of the flat need to pay tax at their highest rates on that. If she and her sister are housewives who do not use them £10k a year annual income tax allowance then in fact there would be no tax to be paid on the flat so let us not rush to cry criminal act.

Turning to the home the parents live in they have given to the children they need to pay to the children a market rent as someone said above to cover the inheritance tax position (partially exempt transfer). They should try to find some way to organise this.

I have not worked out what was said above about mortgage applications however.

If HMRC get their teeth into this there may not be anything left to inherit......and OP - if you have applied for a mortgage based on rental income that you do not receive, that's fraud........

I'm normally very much of the "there's no inheritance while the person is still alive", but in this case the "inheritance" has been legally given and the person who should legally benefit is in a worse financial position because of it.

I think in this situation it would be absolutely fair to ask to realise some of the wealth she legally owns and for which she has legal responsibility and tax liabilities.

It's not greedy to ask for an inheritance you've already been given.

I think your first priority has to be to talk to a solicitor, because you are at risk of paying the penalty for what seems to be tax evasion on the part of your parents. If the house is legally yours, then it's yours.

Lenders will accept a loan towards a deposit 19lottie82 Have just been through this with DD1 - wehave in fact given her the money, but a loan was an option too .

They have just put up the amount you can hold in Premium Bonds to £50,000 -or are about to

I agree with PP you need to stand on your own feet here, you have been fortunate to have lived rent free and could save more money by staying where you are. You can continue to live where you are now you just want to move- you don't need to.

If your parents wanted you to have the money either as a gift or loan they would have offered before now. I suggest you get this thread removed. I am no expert on tax etc but your parents appear to be building up to leaving you and your siblings a huge mess and debt to sort out in the future. You agreed to having your name on property, bonds etc you are an adult so you need to find out the detail of what that means for you and possible future implications- ignorance is not an excuse.