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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Inheritance Tax AIBU?

241 replies

FrancisUnderwood · 12/09/2017 17:22

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?

OP posts:
MotherofSausage · 12/09/2017 17:58

This reply has been withdrawn

Message from MNHQ: This post has been withdrawn

SerfTerf · 12/09/2017 17:58

I refuse to indulge in "IHT planning" too. It's a valid ethical standpoint.

You need to step back. A LOT.

SerfTerf · 12/09/2017 18:00

Mother it's her father not her husband.

FenceSitter01 · 12/09/2017 18:00

I'm with you OP. Inheritance tax is an optional tax. It can be carefully planned for.

I like this quote I picked up along the way "The only people who pay inheritance tax are those who dislike the tax man more than they distrust heir own relatives".

It's a fool who doesn't plan wisely and leaves the chaotic mess for relatives to clear up.

diddl · 12/09/2017 18:01

It is up to Ops father, but Op is the one affected, so I do get where Op is coming from,

That said, I think that any inheritance should be accepted with good grace not "oh it could have been more".

MotherofSausage · 12/09/2017 18:02

This reply has been withdrawn

Message from MNHQ: This post has been withdrawn

averythinline · 12/09/2017 18:02

I can see why you're bothered by it and have a similar situation on both sides of our family ....I do think you are going to have to let it go....
I find it hard as on my side nobody had a pot to piss in for generations it seems mad to not maximise the income there could be for all the gc if nothing else....
on dh side they have had money and benefitted themselves but don't want to talk about it as refuse to see that they may die at some
stage and they are not old (in late 70's multiple health conditions)
it is nothing to do about wanting to contribute to the state - they have spent years being tax efficient as kept telling us!

Neither of us talk about it with them any more its not worth to bring that dimension into the relationship...

However- what we have made very clear is that they need to pay for care - they massively can and should (they think the state should pay) - we will not care for them....we will visit etc be family but not be their nurse/carers....

honeyroar · 12/09/2017 18:02

I know where you're coming from. I don't think you're being unreasonable. But you've brought it up and he's heard you, that's all you can do. No point stressing.

alltouchedout · 12/09/2017 18:04

Your dad sounds decent. It's really nice to hear of someone not trying to wriggle out of inheritance tax.

Firesuit · 12/09/2017 18:05

What is it you want him to do to avoid IHT?

I normally do what I can to avoid any tax, but I've concluded that IHT is not worth worrying about much. We have more than a million, but due to most of it being in pensions and our home, the worst case scenario is that only about 7% will go in IHT. It's still a lot of money to hand over, but not worth going to far out of our way to avoid paying.

Motherbear26 · 12/09/2017 18:05

YANBU but if you haven't been able to convince him then I think you have to let it go for the sake of your relationship.

I don't see inheritance as 'free money'. I see it as my children benefitting from a lifetime of mine and dh's hard work. A substantial amount of tax has already been paid on everything we have. I don't blame anyone for seeking to minimise the amount paid by their children on anything gifted to them.

PaintingByNumbers · 12/09/2017 18:05

Yanbu
Probably just blanking the whole dying thing and is generally selfish? Is that close?

Evelynismyspyname · 12/09/2017 18:07

Good for your dad - why should tax avoidance on unearned income be fine?

Won't property have to be sold anyway unless you are an only child? Or is the estate multiple properties with the same value?

MiraiDevant · 12/09/2017 18:08

YANBU - I agree and my Mum is the same. Stupid woman who would have nothing if it were not for my dad's careful planning and who really needs the money now so should understand the difference it makes. But she won't consider us at all - and how much it would help me - how exhausted I am and how worried I am about the future.

No YANBU as he wants your help but does care about you.

BrandNewHouse · 12/09/2017 18:08

This reply has been deleted

Message withdrawn at poster's request.

user997799779977 · 12/09/2017 18:08

YANBU. What a selfish idiot. I completely disagree with IHT as well. You're already taxed to the hilt when alive. Why shd your kids pay when you die?

YouAndYourFloofyCatNose · 12/09/2017 18:08

It's perfectly possible to arrange wills/trusts/inheritances etc in advance and still pay your fair share of tax which is legally due. It doesn't have to be chaotic or unfair on executors etc, and I find it very disingenuous that people are saying this is why they "plan", it's fairly obvious that people want to avoid their tax liabilities under the guise of "simply being prepared".

Tax evasion and tax avoidance are both morally wrong in my opinion, even if only one of them is legally wrong.

Evelynismyspyname · 12/09/2017 18:09

I do see the hypocracy btw, but think paying your inheritance tax has to be more right than avoidance schemes!

Firesuit · 12/09/2017 18:09

Having said that, I do intend to prioritise spending non-pension money over that in the pension, to minimise IHT. I am do something to mitigate, just not going all-out.

donquixotedelamancha · 12/09/2017 18:10

"Not earned by himself but handed down through the family."

That's why I think inheritance tax should be 100% over a certain modest amount. The lack of social mobility in the UK (even over centuries) is incredible- and this what drives it.

Its absolutely a good thing for him to give some to the 'tax man'- by which you mean public services.

thecolonelbumminganugget · 12/09/2017 18:10

Perhaps he is planning on leaving his entire estate to charity or if it was passed to him without iht it is already structured in such a way that there would be no liability when you father passes away.

SerfTerf · 12/09/2017 18:10

Right brand. Because "indulge" isn't a reasonable word to use but "punish" is?!🙄

MiraiDevant · 12/09/2017 18:11

Sorry does NOT care about you

Mrsmadevans · 12/09/2017 18:11

Is your mum still with your dad or if she has sadly passed away then the tax allowance for your mum will be available for his estate. Which in essence means allowing for property 100k tax allowance each , and their own tax allowance of 325k. meaning both of their estates together comes to 850 k before tax. So in effect if your dad's estate is 1m, then his tax will be 20% on 150k which is 30k.
I also think as ppl get older they worry about sorting things out and don't want to be bothered it becomes too much for them.
If your dad hasn't left a will then it will be split between you and your sibs automatically . It will have to go to probate but it will work out fine. I don't think you need to worry all that much to be honest. He may well spend 150k before he dies and good luck to him like you said!

Kursk · 12/09/2017 18:11

It's his money, however it would be a shame to waste all the heard work that his family put into protecting it.

I personally believe that tax is theft so I would be making sure that it went to my family.

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