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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:
Inertia · 12/09/2017 18:36

Sorry, that makes it sound like I'm opposed to the benefits taxation brings to the wider population which isn't the case at all!

viques · 12/09/2017 18:36

I'd like to say thanks to the OPs dad.

If it was up to people like the OPs grandparents, the celebs who divert their earnings through tax havens, the amazons,Boots, and other companies who pay out pathetic amounts of tax, the mega rich like Ecclestone and Phillip green who do crafty deals with the taxman by nominating their wives ,the so called non doms who get away with paying no UK tax and the rest of the tax avoiders , then the only people paying any tax at all would be us poor mugs on PAYE!

so thanks OPs dad for realising that we all have a responsibility to pay our way, and that those with more, pay more.

Yours gratefully, a still paying income tax pensioner.

MrsDustyBusty · 12/09/2017 18:37

I'm just a normal, working class person trying to ensure what our family has worked hard for and paid taxes on, is maintained.

Inheritance tax isn't on the estate, it's on unearned income when an individual gets it. It's really not accurate or useful to see it as the same thing accruing tax repeatedly. That's an impression the very wealthy have paid good money to publicise in order to increase public hostility towards inheritance tax, but really, it's an individual being taxed on a windfall, much like the tax you would pay on profits from your investments.

OuaisMaisBon · 12/09/2017 18:40

I think the OP is probably complaining more about the inherent unfairness of her father happily benefiting from his parents' foresight in planning IHT on his behalf, but refusing to contemplate doing something similar for her (and her siblings, if any). He clearly doesn't have a conscience as far as he is concerned, about paying "double taxes", since he didn't have to, but he doesn't mind the OP having to? I don't think he's very kind. Or maybe he's just lazy. Or maybe he doesn't want to think about his own mortality (though he could employ a tax accountant to do that on his behalf).

Mrsmadevans · 12/09/2017 18:40

Francis I understand where you are coming from honestly I do.
I think you are getting the raw end of the deal here.
Have you understood all that has been said to you here?
As for the posters going on about care home fees eating up the estate ....well if anyone wants to give up their jobs to look after their parents like I have, then that is how you avoid paying the care home fees. I am not going to inherit a fortune either but over my dead body will my DPs go in a home and I suspect you are of the same mind Francis. Good luck my dear. I wish you and yours well.

diddl · 12/09/2017 18:41

"Our inheritance has been used to make mother comfortable in a lovely place."

It's not your inheritance-it's your mums!

Etymology23 · 12/09/2017 18:42

mrsdusty - I think the reason people feel like it's the estate being taxed is because things like personal allowances relate to the deceased, not those inheriting.

InDubiousBattle · 12/09/2017 18:44

Our family has worked hard for

I'm just not seeing how you worked hard for this money you may or may not inherit.

DontCallMeCharlotte · 12/09/2017 18:44

Perhaps you could take out an insurance policy on him for a sum assured being the expected IHT? Think of it as a loss leader.

thereallochnessmonster · 12/09/2017 18:46

That's going to massively decrease bills for a lot of those living in high priced areas

god the tories look after their own, dont they

Actually it will benefit all the people who have benefited from the huge rise in property prices over the past 60 years!!! And I'm pretty sure they're not all Tories Wink

llangennith · 12/09/2017 18:46

He may have already sorted it and is just stringing you along to wind you up as you keep mentioning it.
YANBU to be concerned but better to drop the subject and try to put it out of your head.

9toenails · 12/09/2017 18:47

Not to put too fine a point on this OP, but you're a greedy so-and-so with no social conscience. It's not an excuse that other people are similar in moral sensibility to you.

Independently of legality, tax avoidance is often as morally reprehensible as tax evasion, . Not always; but in this case, it is.

Your father is a better person than you, it seems. It won't make you happy, being so grasping. You'll be better off if you work hard at gaining a social conscience. (I suppose we'd better not hold our breath waiting on this, though.)

Doramaybe · 12/09/2017 18:47

diddl.

Well let me put it like this, our POTENTIAL inheritance was used to look after our dear Mum.

Same outcome for OP. Gone without good tax planning, but without the knowledge that the money has been used for some good. Thank you.

mayhew · 12/09/2017 18:50

I'm a midwife. Who do you think pays my wages?

graceyg · 12/09/2017 18:50

YANBU - hook him up with an advisor.

valeinoyikbuno · 12/09/2017 18:51

Yabu

He isn't giving the money "to the tax man". He is effectively allowing the 90% of people whose parents aren't wealthy enough to leave an estate subject to inheritance tax to have a slice. And why not? It's his money, he doesn't need it any more and there's no reason why his descendents "need" an inheritance any greater than the extremely generous inheritance-tax-free allowance.

GardeningWithDynamite · 12/09/2017 18:54

Don't you need to pay the tax before you get the inheritance?

And (if it's property) you pay based on the valuation, rather than the actual selling price.

whiteroseredrose · 12/09/2017 18:58

YANBU. I think you have to pay the bill before you inherit too.

Having said that it's not so easy. An IFA suggested an insurance policy to my DM and DF. It was eyewateringly expensive. They're leaving great chunks to charities instead. That way it won't go to an insurance company nor into government expenditure they wouldn't want.

Userwhocouldntthinkofagoodname · 12/09/2017 18:58

YABU, its his money and I think he is doing the right thing to pay his dues to society when he passes. You have not earned this money and have no right to it. I hope he leaves it all to a good hospital.

BrandNewHouse · 12/09/2017 18:59

This reply has been deleted

Message withdrawn at poster's request.

GardeningWithDynamite · 12/09/2017 19:00

Yes, you can do a life insurance policy that's in trust (so outside the estate) that pays out when you die. It covers the amount for the IHT bill (and the tax man still gets his tax).

The alternative is giving stuff away while you're still alive and hope that you live long enough for it to be exempt. Otherwise, you're just dumping your children with a lot of hassle and potentially having to take out loans to cover a tax bill.

CPtart · 12/09/2017 19:01

What's with all this passing money down between the generations?. I don't get it at all. How is he lucky personally, signing it down to the next person? Someone somewhere along the line will blow it all. I'd have been advising him for years to get a lot of it spent and enjoy it.

Kursk · 12/09/2017 19:04

This thread is interesting, it is definitely showing MN to be more socialist leaning.

I freely admit that I don't have any feelings towards social responsibility. I have somewhat libertarian views, to the extent that I removed my family from British society.

YellowFlower201 · 12/09/2017 19:04

Yabu - he's entitled to his opinion that taxes should be paid and not mitigated. You have not earned this money. Be grateful! You'll get his nil rate band £325k free of tax (and possibly your mum's).
Once it's yours you can chose to save iht. Before it's not your show and you have to butt out.

BrandNewHouse · 12/09/2017 19:04

This reply has been deleted

Message withdrawn at poster's request.