Inheritance Tax AIBU?

[FrancisUnderwood]

NC for anonymity on this sensitive issue but long time lurker/poster.

Essentially, my DF has an estate worth just over 1mil. Not earned by himself but handed down through the family.
He has benefitted greatly from his own Parent's IHT planning genius and is now in a very fortunate and lucky position.
I have recently broached the subject of IHT planning for the family, going forward. With money comes responsibility etc... I have made it abundantly clear to him that this is not a conversation I relish having to have with him, and that i'm wholly aware it is now HIS money to do with as he wishes and that I'm in no way trying to get my hands on his money whatsoever, but I would really appreciate him trying to manage his estate in such a way that it minimises the 40% tax liability his children would have upon his passing.

His answer to this has been unbelievably flippant, he says 'Well that's just the way the country is' and 'everyone has to pay their taxes' whilst conveniently forgetting he has benefitted massively from careful planning on his Parents part. He says 'you'll be alright', which of course is true, but he could do certain things at no cost to himself which would in essence save his children £250,000 on his death, but won't.

I don't want to come across as if there is greed at play here, my family has led a hand to mouth existence and I simply understand the value of £250,000, which is more than a lifetime's income for most people, rather than being greedy for it.

I just can't reconcile in my head how he'd rather give a property to the taxman than plan ahead and hand it to his children.

I've tried to be as delicate and sensitive about this topic with him as I can and now our relationship seems to be disintegrating rapidly, we haven't spoken for a week.

This isn't about me 'taking his money' it's about planning ahead to avoid having to sell family property later. His attitude seems very much to be that 'I've got it and i'm keeping it'.

We've sought financial and legal advice together on the subject but he just doesn't want to do it.

I bend over backwards and have just given up 18m of my life to his care, and catering to his every need. I just feel kicked in the stomach.

AIBU to feel this way, or is he?

What meagre assets I have go to them

If assets are, in fact meagre they do go to them! They can have an unearned windfall of hundreds of thousands of pounds before they pay anything . Hardly meagre.

not to pass it onto your family because you can't be bothered to organise betteris really not on

I don't see this as him not being bothered. I think op's father is making a decision about where he would like his money to go when he dies. Even if you think IHT planning is morally fine surely you don't think someone should becoerced or guilt tripped into giving their money away whilst they are still alive to avoid tax for their Heirs?

Essentially, my DF has an estate worth just over 1mil. Not earned by himself but handed down through the family.

YANBU

And those who say you are being unreasonable probably have never been in this kind of position, and have negligible family fortunes. If you've not been around this kind of estate or wealth, you really don't appreciate that the issues are somewhat different from the ordinary kind of inheritance - a house & a but of savings.

As you say, your father didn't earn all this estate: it was passed down to him through his family. Probably because he is
male
eldest son

So he's benefitted from sensible estate planning, and he's probably only got the estate because of his sex & the luck of birth.

He needs to take responsibility for this being family money not his. There's another thread running in Chat about the irresponsibility of a father who didn't order his affairs properly. I think that these men that do this are outrageously irresponsible. And very unreasonable in not realising that the only reason they've inherited this sort of wealth is the inherent patriarchy of this country's laws. They have a duty to behave responsibly, as their fathers & grandfathers did before them. They get the benefits - they need to pass these on.

As I say YANBU. At all.

And I'm sorry for all the upset that envious posters here may have caused you. You're not being grabby, you're being responsible. Far more responsible than your selfish father.

Have you tried pointing out to him, that it's actually NOT "his money" - it's family money, carefully conserved by previous generations?

I think the issue several of us have here is DFs double standards. It's the hypocrisy.

It's ok for him to benefit from IHT planning, and he encouraged his parents to facilitate this. He's had a sudden change of heart, but apparently not enough of one to hit him in the pocket. If he felt particularly strongly that IHT is moral and he needed to repent for his previous actions, there'd be nothing stopping him making arrangements to pay IHT equivalent sums whilst still alive. Actually the more I read it, the more I suspect the posters who think he's just in denial about his mortality rather than making a moral decision might be right.

Very attractive idea about taxing unearned wealth through property gains more highly than anything else. It'd never work, but I love the principle.

And those who say you are being unreasonable probably have never been in this kind of position, and have negligible family fortunes. If you've not been around this kind of estate or wealth, you really don't appreciate that the issues are somewhat different from the ordinary kind of inheritance - a house & a but of savings.

Not true. Parents, in laws and I have estates worth much more than a million, which is frankly, a small estate. Doesn't mean we automatically try to avoid IHT.

t's ok for him to benefit from IHT planning, and he encouraged his parents to facilitate this. He's had a sudden change of heart, but apparently not enough of one to hit him in the pocket. If he felt particularly strongly that IHT is moral and he needed to repent for his previous actions, there'd be nothing stopping him making arrangements to pay IHT equivalent sums whilst still alive

Indeed @bananashit

That's what my great-grandparents, grandparents & father did - they made charitable donations equivalent to the benefit they received from long-term estate planning. (Before that, early-1800s obviously not much taxation at all in England anyway).

The OP's father sounds selfish & irresponsible.

Such liars on this thread

The idea that someone would prefer to leave their money to the government than their children is the triumph of a moral vacuum created by a welfare state.

Look after your family, let other people get on with theirs.

PaintingByNumbers

Care to point out who exactly? Or do you mean those that may not agree with you?

YANBU

Your father is an extremely selfish hypocrite. He was quite okay with benefiting from the IHT planning HIS parents did, but doesn't think you deserve the same consideration and courtesy. He's an arse.

PaintingByNumbers

Please, use your wonderful powers of telepathy and tell us who are the liars. We're all ears.

Off to find me this "tax man" everyone's banging on about. He must be rolling in it!

Off to find me this "tax man" everyone's banging on about. He must be rolling in it!

I'm a tax professional and agree that planning around IHT is not avoidance, it's pretty much a voluntary tax.

My friend's dad, like OP's, refused to make a will or provision for his dc and dgc. When he was dying of cancer he tried to give them a load of cash. This led to a huge tax related mess.

On the other hand, my FIL was the opposite and panicked and handed over most of the family assets to his eldest son when FIL fell ill in his fifties - he regrets it 30 years later and is still alive - PIL short of money and son treats parents with contempt.

On the other hand, my FIL was the opposite and panicked and handed over most of the family assets to his eldest son when FIL fell ill in his fifties - he regrets it 30 years later and is still alive - PIL short of money and son treats parents with contempt.

I think a lot of people just don't bother to research and understand IHT. As per this example, you get some people who do nothing and others who virtually give everything away and then regret it. It's unnecessary, the IHT thresholds are very generous, most people have no need to give stuff away as their estate wouldn't be liable for IHT anyway, yet they still hand out money like confetti leaving themselves short.

But I suppose, it's not just IHT, there'll be people worrying about care costs and trying to get their estates low enough so that they wont have to pay most of it out for their care costs in later life.

GiantSteps are you one of the eyebrow raising number of MNers who likes to hint that they are aristocratic?

"Essentially, my DF has an estate worth just over 1mil. Not earned by himself but handed down through the family.

YANBU

And those who say you are being unreasonable probably have never been in this kind of position, and have negligible family fortunes. If you've not been around this kind of estate or wealth, you really don't appreciate that the issues are somewhat different from the ordinary kind of inheritance - a house & a but of savings.

As you say, your father didn't earn all this estate: it was passed down to him through his family. Probably because he is
male
eldest son

So he's benefitted from sensible estate planning, and he's probably only got the estate because of his sex & the luck of birth."

"An estate worth over 1 million pounds is perfectly likely to be a two bedroom flat in Battersea, not "old money" :o