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.

Lotus, the parents are apparently managing and receiving rent on the rental properties as though they still own them, not the OP.

I am puzzled as to why posters think it is so wrong to be given money by your parents ?Especially for house deposit (I agree to ask for it would be crass) .And that OP position is complicated .
We are in the fortunate position (inheritance, savings)of being able to help both our DDs onto the property ladder. One is in London (no partner) and would not have a cat in hell's chance otherwise.
I would rather they had the money now, when they need it, than (in hopefully 20/30 years)when we die.

I suspect the parents are evading higher tax rate on the rental income, by the property being in their children's name.

It would be interesting to know who is receiving income from the Premuim Bond regular small wins too.

My grandma is in a very nice private care home and has been for the last 4 years and is in relatively good health so could be there for some time yet.

It costs £3,000 per month. £36,000 per year.

Won't take long to get through even the largest of savings pots at those prices so your parents need to keep hold of their cash until they no longer need it!

Agree a loan would be the only thing that could be reasonable in my book.

Thanks to everyone for their advice on here, it's been a bit of a wake up call and I feel I've shared too much personal info- I need to get to the bottom of the financial web it appears I'm caught in. This is also my first mumsnet thread. How do I delete the thread, or can you?!?

Postchildren I think most of us are not so much worried about children being helped on to the property ladder, as this unholy muddle of apparent tax evasion and fraud.

The tax system, although flawed in some ways is designed to try to be fair to everyone in taxing their sources of income.

On earned income you pay Income Tax
On the income you receive through the sale of capital assets you pay Capital Gains tax.
On inherited income you pay Inheritance Tax.

People evading (committing fraud) means the rest of us our subsidising their crimes. IME, often, the people who do this sort of thing will be the first to point their fingers at people living on benefits as being spongers.

On the top right of your original message click on the report button, it will open a pop-up where you can explain to MN why you would like to delete.

Not sure how you delete it- think HQ have to

Good luck Op.

Monkeywhisk agree with others who say that it sounds like your parents are doing some extremely dodgy things to evade tax, and are using you and your siblings to do so.

I do hope that you are able to sort it out. I suspect your parents won't be very amenable to sorting it out though so you might need to be prepared to take steps to extricate yourself without their agreement / approval.

The fact that they have put all this stuff (property / premium bonds) into the names of you and your siblings but actually they control them and get the benefit is fraudulent (on their part) and I expect now that you know legally you would be expected to do something about it IYSWIM.

Oh good luck with all this, I hope you get it resolved.

Nice to see the morality police and Olympian conclusion jumpers out in force on this thread. Other peoples money seems to create an inordinate amount of frothing at the mouth in some posters!
OP, I wouldn't ask for an advance on an inheritance. It's a little insensitive and not a given. Perhaps ask for some help, gift or loan, for a deposit in view of the potential exclusion from Help to Buy because of the current property set up your parents have instigated. Good luck.

Good luck with this. If your mum is controlling you will need to explain to her that you are at risk of trouble with the law. Don't let her assume she knows everything....not sure the trust used by the Milibands is still legal is it? These things change every five minutes. Good legal advice essential.

Your parents tax planning is all wrong. If they receive the rent from the house in your name, they will still have to pay inheritance tax, as it's not a proper gift.

The max premium bonds per person is now £50,000.

I don't agre there is necessarily a crime here.

I see this "merrymouse Sat 13-Jun-15 16:32:19
Lotus, the parents are apparently managing and receiving rent on the rental properties as though they still own them, not the OP."

It is lawful for a parent to give a property or 1000 properties to their children.
It is lawful for a husband who earns a lot to put family savings in his wife's name when she is a housewife although I've always though those men and women are just sa much dirty little tax avoiders, morally repulsive in the same way as people suggest companies who within the law limit their tax but that's a separate issue.

So where is our crime? Child owns the buy to let property but instead of receiving the rent they give the rent to the parent? Is that where we are seeing something that is wrong? Is that any different from wife then earning interest on the savings her high earning husband lobbed into her name and then wife gives the interest back to the husband?

LotusLight of course it's legal to give away a house but the OPs parents have retained an interest in the houses - they live in one and receive the rent from the others. This is still legal but means the houses will be counted when calculating any inheritance tax. The OP has said her parents are trying to avoid paying inheritance tax.

Milibands case was not the same as the OPs. What Milibands family did was legal and involved a deed of variation for his fathers will. It's completely different circumstances from what the OP is suggesting her parents are doing.

We give our adult children cash in order to avoid inheritance tax but give it free of any conditions. Ie it's really gift for them to do what they want with. We keep records and plan to live longer than 7 years.

I don't see why your parents wouldn't help you with £20k to be honest. I would help my DC in this way. The only reason I wouldn't would be if I had concerns about the reliability of a child's partner. Don't understand why your parents didn't pay for your wedding either if they are that well off. Haven't read all the thread. My father helped me with deposit for first flat and I asked for help. Long time ag now though.

Well that's totally different though isn't it? People saying fradu/crime now and OP wanting to delete thread and references to tax evasion which means prison is very different from potentially if the children outlive the parents which is not certain there may be IHT to pay if it still exists and if the amounts are over whatever the threshold is in 25 years time.

Obviously on the residential property the parents need tok now that they need to pay market rent to the children which is not hard to do particularly if you want to help your children and control them which seems the ethos here so they can easily do that and that gets over the reservation of benefit issue.

Yes Mililbands tried to avoid inheritance by lawful tax avoidance ways in the same way my father varied his will when my mother died and Princess Diana's will was changed. The state may change those rules in due course but currently that kind of tax avoidance is lawful and I see as amoral right as I regard high tax and big state a moral wrong. Others would like 100% confiscation of asse4ts at death and indeed 75% tax or higher for high earners so everyone has about £20k a year and we are all the same. these are just political issues.

What I was not sure about was was anyone saying there was mortgage fraud and also the parents reservation of benefit in the buy to let? It may be the parents have done that in a way that works in terms of the latter - we haven't seen the papers or arrangements.

I must say as well, it does seem unusual that parents who are wealthy with financially struggling DCs marrying low paid people don't just pay for their DCs wedding/give them money towards it, I know it's more common to pay for the wedding yoruself, but while I've heard of couples taking out loans to pay for their weddings, I've not heard of loans from parents before - everyone I've discussed wedding funding with has either saved up themselves, or borrowed from official sources (like personal loans or credit cards) or were given money by parents/grandparents.

It does seem like your parents like to keep you beholden to them - rather than give you the money to buy a place, they give you the use of a flat that they continue to own in a location of their choice. Rather than try to reduce their savings/assets to avoid IT by gifting you a property/money, they put them in your name but don't let you have the use of them.

gifting expensive assets/large sums of money to adult DCs to avoid IT is rather common, but it's not normal to then not let your DCs use those assets/money.

Get legal advice, take control back. If stuff is already in your name, you can't just ignore it, you are possibly in the middle of a mess of someone else's making.

What a hot potato. You and your siblings really need advice from an accountant. Are you sure you all own the houses have you seen the paperwork. My neighbours did this type of trust a few years ago then HMRC insisted all the rental income went to the children, so they undid the trust.

LotusLight, if the parents have sorted this in a way that works, I imagine I won't be the only poster who is genuinely interested to hear how they did it.

I don't think the OPIs being accused of anything by those of us thinking of tax and law, we are more just concerned that the OP isn't sure what is happening.

I will also admit I'm interested in IHT for myself and my family.

What is your parents' total net worth, and how much would you like them to give you?

Child owns the buy to let property but instead of receiving the rent they give the rent to the parent? Is that where we are seeing something that is wrong? Is that any different from wife then earning interest on the savings her high earning husband lobbed into her name and then wife gives the interest back to the husband?

From what the OP is saying, she never sees the rent. Presumably if she did she would be filling in the appropriate income tax returns, but that doesn't seem to be the case.

Mortgage fraud would be if the OP was claiming she was receiving income that she wasn't.

Rightly or wrongly, people who are married are treated differently when it comes to tax.

And whether you are involved in a multi-million pond smuggling ring or being paid cash in hand, if you are deliberately misleading HMRC to avoid tax it's tax evasion.