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.

typo - market rent not value.

Gov, yes there are benefits implications although I would hope most mumsnetters would try never to claim benefits and support themselves through hard work (writing as someone who doesn't even get child benefit and has never had a tax credit.... or benefit and worked full time for over 30 years without a single break even for maternity leave)....
Yes if the children are bankrupted the parents' home is at risk.

This is the big question for anyone getting older. I know someone whose father gave him the £8k (yes £8m!!) family home to reduce IHT. You have to trust the child to make this kind of gift and for example because that if you needed cash in your 90s for care they would either take you in to care for you or pay for your care home. In plenty of families there is rightly that trust and verylittle risk of bankruptcy.

The biggest issue is actually divorce. Better to have a loan agreement if parents provide funds for property so that if the couple divorce the non family spouse does not get his filthy mitts on the family money. Although then you don't have the IHT benefit buf it it's 25 years before the parents are likely to die might as well wait until you're over 70 to decide if loans can be changed to gifts.

The other issue is mortgages. I cannot remember above if any of the properties are mortgaged but obviously if an adult child has used up their ability to get a mortgage on one property that tends to mean they cannot get one on another as divorcing couples tend to find.

Well clearly the OP thinks her parents are doing something illegal or she wouldn't be trying to get the thread pulled.

That's true about divorce Lotus, hadn;t thought about that. The thing is I'm not sure many (any?) people plan or expect to go bankrupt or rely on benefits but unexpected things happen. I don't know that it's fair to rely on trusting one's DCs not to become disabled, be made redundant etc. It is true that some of these risks can be reduced (not sure if eliminated though) by insuring oneself. However, that all goes further to prove, imo, that these types of arrangements need to be carefully thought through. Certainly in our case DH felt he did not want the responsibility of owning his DM's home.

She probably doesn't want all her personal financial details on mn, alternatively.

I dont think it's illegal but at her time of life the op needs to control her own finances, not have someone doing it for her without giving her access to the money.

I would be telling my parents I needed to sell the premium bonds that are legally mine now as they have made me ineligible for help to buy. Then they can rent out the basement flat she is living in at present for a much bigger income than the pbs bring in. All sorted.

I believe, there are also Capital Gains Tax implications on the disposal (including gifting) of the non-residential property.

The increased value in the let-out property from the date the parents acquired it to the date thy gifted would be subject to CGT, and also the date the children acquired to the date they eventually sell will leave them potentially with a sizeable CGT bill.

This will also be true of the parents own property if the daughter does not continue to love there.

Yes if there is a gain on the sale of the buy to let the adult children pay the CGT at their rate whcih is probably 28% on the profit at the time of sale.

When my mother died my father put her half of the house in our names ( we did by the way pay IHT after my father died) as in those days the change so that the couple together have the IHT allowance did not work in the same way as now. In other words the Milliband thing was done. Had the property gone up in value in the period before my father died (it didn't as not SE) then capital gains tax might indeed have been payable. I seem all my life only to have made capital losses which I never have capital gains to set against!

It's tricky isn't it. We are planning to give our kids money to help them buy houses. I would want it to be a 'loan' to protect it in case my DC split from their partners but I also find that a bit 'controlling' iykwim i don't like the thought that I would have to judge when it's safe to convert the loan to a gift. I also think it's wrong and controlling to put your DC in a position where they owe you. It would be horrible to think they would feel indebted to you. I might prefer to give the cash as a proper gift and suggest that they have a proper agreement with their partners over who has contributed to the house purchase (I forget the proper term but I know you can do this)

My children have been and will be all given the same amount towards their first property purchase which is a gift. The other parents in law have made a loan instead to protect their son on divorce which is absolutely fair enough. The one of mine who had more than the gift amount has a loan agreement with me (she is not married) and she does repay by the way. IN fact she may have repaied entirely by the time of any marriage if she ever marries.

If someone moves in an unmarried partner it is wise to get a cohabitation agreement which my ex asked my daughters for (daughters are lawyers) when he moved someone in and now he wants a pre nup (as he doesn't want his new wife presumably to take what is in effect my money given to him on the divorce - doesn't want her to do what he did to me.... laughing as I type... and hopefully will make a new will continuing to leave it all to the children although as his family live almost to 100 my lot will be 70/80 before inheritance is likely to come into play anyway.

I don't think a loan is a good idea because of the repayment requirements and psychological effect but it was the only way she could buy - I was not going to give her more than the others - so it's working fine but I would try to avoid it in general.

So I would say for families lucky enough to help adult children the biggest risk if they are in sensible careers is not bankruptcy or child dying before you but divorce or a partner claiming a jointly owned place and tie that up with cohabitation and prenup agreements and probably a loan agreement but do bear in mind some mortgage lenders will not lend if the parents are loaning part of a deposit rather than giving it.

CMon
My parents loaned me - with interest accruing - to buy my first flat and it was repayable only on the sale of the property IF the property was sold for equal to or more than purchase price (on estate agent valuation). If sold at a loss I would have had the option to 'rollover' the loan into my next property. The idea was that if you are feeling flush enough to upsize, perhaps you no longer need the loan; or alternatively if you have to sell (say, if I'd been in an accident and couldn't manage my 3rd floor flat stairs) then selling provides a good opportunity to see if some should now be a gift, etc.

The issue of repayment therefore never came up in ordinary conversation because it was only due if I moved, and moving is a big financial step that needs due consideration in itself so they felt needing to consider their loan as well as the mortgage wasn't a big issue.

I guess my parents assumed they weren't helping me buy my forever home, just the first step on the ladder, so repayment would naturally happen. As it was I made a stonking profit and paid them back in full, plus interest, without needing a loan for the next property (had also met DH by then).

It has led to unfairness with my siblings, as each loan has been considered on its own merits but I think unfairness always results when large sums of money are involved and one child is savvy, one thrifty and one profligate