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?

I agree with other posters - perhaps he feels that it would be immoral to minimise the IHT bill despite having benefitted from his predecessor doing that (maybe because they did?)
Lots of people leave money to Charities and sometimes even the State in their wills. They are helping others in doing so.

Not everyone is into tax avoidance!

If we all avoided tax like the OP clearly wants then the country would be shit creek

Thank you for the responses thus far.

I appreciate that perhaps I do need to let it be, I don't want our relationship to suffer. Sometimes when you're so close to a situation you just can't see the wood for the trees and emotions are tricky things to wrangle.

FWIW, I'll be looking after him whether he has a million or naught.

I think you are being very unreasonable, sorry. It is entirely up to your father and not you. If he is just being lazy and careless, then I have some sympathy. But it sounds like he actually believes that paying inheritance tax is the right thing to do and his "flippant" reply was trying to make that point without being too forceful about it. As it happens, I agree with him. I think that inheritance is fundamentally unfair and a major source of inequality in this country. I think that inheritance taxes should be higher and there should be more steps to prevent avoidance (and my father must be worth about £1 million, mainly in the house).

But even if I didn't hold that view about inheritance, you would be unreasonable. Just because he has inherited £1 million, does not oblige him to pass it on tax free, sorry.

Let it go OP, he's doing the right thing. You'll still get a lot of money after tax.

If he's going to have lots of money in the pot, why not get help with his care from social care, or use some of his money for private carers?

We have a rather hefty personal tax bill coming up and every time DH whinges I remind him of how big a bill we would have if it weren't for the NHS... significantly more than our tax bills for the past few years.

Sorry, OP, but you were never going to get any sort of agreement for your situation on MN, which is notorious for slating anyone who is perceived to be getting a free handout.
For what it's worth I don't think YABU - it seems foolish to me not to take the precautions you mention and doesn't make you a grabby bitch. But I don't know what you can do about it though.

We found ourselves in a very similar situation OP.
My DsMIL paid her taxes all her life, didnt iht plan correctly and when she passed away there was a hefty tax bill to pay on her estate.

We have nothing against paying taxes but this is literally a double taxation - as i see it anyhow-and doesnt seem right

It's not double taxation any more than VAT is.

At the end of the day it's up to him. Do you think it's a moral decision to pay the fair amount of tax, a lack of trust in you and your siblings, a preference for keeping control , or a or a refusal to contemplate the possibility of his own demise?

Going against the grain, YANBU OP.

As you say, he has benefited from careful tax planning but is too selfish to do the same thing. My parents have sorted their estate to avoid inheritance tax, all it requires is a bit of forethought and trust. My in laws however won't, which basically means my dh will get a much smaller inheritance than me on similar size estates. Neither family are mega rich at all, we just live in the south east and that's the reality of how much Alot of houses are.

I think the OP is well aware that ultimately it is his money and she can't do anything about it. All you can do is gently come up with ideas he might be comfortable with and gently remind him that the extra would make a difference to yours and your siblings (plus his granchildrens) lives, but it sounds like you've done this already so I think you'll just have to leave it and accept it.

I don't know how old he is but maybe his opinion will change as he gets older and thinks about what legacy he wants to leave.

YANBU. Dealing with shit like this after someone dies is a fucking nightmare.

Yanbu,

Look at Octopus IHT solutions, he may get be more keen as he retains control.

He is being very selfish, it's not tax evasion, IRS estate planning, something he benefited from.

Managing money down the generations is sensible OP.

D you have your mums nil rate band intact or can you benefit from the new enhanced property nil rate band?

That's not much else you can do OP. I do think you are being reasonable though.
I've got a relative that scrimped and saved her whole life, no holiday, meals out etc her house is worth a lot, I keep telling her to treat herself now, it's not worth her continuing to save when then 40% will go to tax.

Personally I do find inheritance tax unfair, especially when people have to sell their family homes to pay for it (in some areas 1 million actually is a pretty average house).

IHT planning even......

Thank you for the reasoned responses both for and against my AIBU, it has given me a more balanced view of the situation.

I don't want our relationship to suffer

Then don't let it! Just remind yourself over and over that it isn't your money. It might never be your money. If he does leave you some you will be getting a large unearned sum of money and, yes some of it will be taxed but you will still be financially much better off that you were and far better off than most.

I don't think you ate being unreasonable at all and he seems to be enjoying being flippant and upsetting you - otherwise why would he do it ? Particularly given that you say when it was him inheriting the money he did everything he could to avoid paying IHT.
However, it is his money to do as he pleases with.

I feel it's being double taxed as well.

Incidentally, the IHT issue aside, our family has always met it's tax liabilities completely and given generously to several charities across the years, continuing to do so.

As it happens, I agree with him. I think that inheritance is fundamentally unfair and a major source of inequality in this country. I think that inheritance taxes should be higher and there should be more steps to prevent avoidance (and my father must be worth about £1 million, mainly in the house).

There's nothing stopping you from donating your inheritance to the HMRC irregularregular, I'd be interested to see whether you do or decide to keep it though.