Inheritance, brother wants to keep it quiet

[1strangerthings]

My parents are selling one of their properties. They want to retain 50% and split the rest between myself and my brother.

I am on a ftc with the possibility of it becoming permanent. I've said to the wife that I am planning to keep it to one side, but to reinvest it in a new upgraded property if I get a permanent contract.

My brother in the meantime wants to keep it secret from his wife. I have said it's not my business, so won't actually tell his wife, but I will certainly be speaking to my wife.

My parents on the other hand are frustrated. They want to be open about the fact that they are being generous to both families, rather than pretending to keep all the money. They (and us) are also slightly peeved that none of us are addressing this in open terms.

This is a tricky one - I think the brother is being an idiot and possibly nasty. Would encourage your parents to talk to him about their feelings and how trying to keep something major like this secret is highly likely to cause problems. If not now, then down the line. I guarantee it.

As for "the wife" - some of you are terribly literal with language aren't you? No understanding of context or nuance.

I am variously referred to as " the wife" "er indoors" "my little brood of vipers" or the one which usually raises a smile, at least the first time they hear it, "my current wife"

FFS it's lighthearted and I am not in the least bit diminished or offended by it.

My children were often called "ratbags" or "dirty urchins" when younger by both of us.

Your parents could make the gift conditional on it being shared with the couple rather than DB only.

casiloco I agree it would be an uncomfortable situation for the parents.

There are some easily offended commentators on this thread! The happiest marriages rely on a good sense of humour. My old man agrees with me!

Quite slocombe

Buey it can't actually be inheritance when both parents are sitting alive and well.

Sounds very sly. You must not collude. He’s gotta come clean fast - hedging his bets like this is gonna end in tears.

You both have the right to keep your family business private.
How’s his marriage? Maybe things are not so great and his plan is to keep his family inheritance for himself in the future.
Why would the parents feel the need to display or advertise their gift to their sons? If you give, you do so with love and kindness and not with publicity attachments

OP
As a parent of 3 grown up dc with 7 dgc if my dh and I were in the position of being able to gift a substantial sum of money I would be doing it openly. I.e hosting a family meal and gifting at this get together so there would be no secrets/ exclusion towards anyone be it dc or sil/dil. I think your brother is being very selfish behaving like this, and there could be horrible backlash towards your dp if your sil discovered the truth, and that wouldn't be very nice for your parents. I think the answer here is for your parents to address your brothers intended behaviour and nip it in the bud.

Parents want to give a gift - give it without ties - why do they feel the need to let everybody know - to bask in glory?

I think it's probably okay to want the person GETTING the money to know about it though. As they are married, this money is a marital asset, not the brother's alone.

I agree with the posters above - I think that the brother is planning to leave his wife and has some wrongheaded notion that if she doesn't know the money exists (even though she will know perfectly well) she won't be entitled to any of it, even the return of the money she has bailed him out with in the past.

Even if he is NOT planning to leave her, if my husband was given a substantial sum of money by his parents and actively concealed it from me, I would consider our relationship to be over. Not because I wanted "his" money, but because it would indicate that the trust had died and that he did not consider me to be his partner any more.

@1strangerthings - your sister in law will know perfectly well that there is money. She will know that your parents are selling the house, and she will observe that you and your wife suddenly paid off your mortgage, or got new cars or something in the immediate months after. She will have access to her husband's finances (presumably?) and she will see that he has been given a lump sum and concealed it from her. She will also know that you colluded in this.

It's not your place to literally ring her up and bare your soul to her, but you should advise your parents not to be complicit in lying to her about this.

Suggest that they sit your brother and his wife down together - point out that as your brother is demonstrably shit with money, and has had to be rescued by his wife in the past, they risk him losing this money almost immediately, rather than it benefitting his children and overall lifestyle, as they hope.

Impress upon them that as your SIL is such a competent person, the money will be put to much better long term use in their joint hands than in his alone - if he is lying about it before he even gets it, he is likely to be intending something half-witted for it - paying off secret debts springs to mind, gambling, a bad investment, or wasting it on material crap.

Gifts from parents of over £4,000 per year are taxable

Gifts aren't generally taxable at all, regardless of size.

Where the giver dies within 7 years, has enough assets to be liable for inheritance tax, and the estate can't pay it, HMRC may require the recipient to pay the tax. The vast majority of gifts are not affected by this.

There's no such think as a recipient having to declare a gift to HMRC. In the circumstance where HMRC have an interest, it's whoever is handling the estate that has to account for it.

My dad did this years and years ago. A great aunt left him and another relative her house and my mum did not know and nor did I until much later. I wasnt sworn to secrecy because my dad knew I knew she would spend every single penny of it. When he died, he left her well off and with the house but she spent her way through every single penny, spent all her savings and had to downsize her house.

Sadly it does not seem to be the case here as you say your SIL is competent and reasonable. I suspect his inheritance will be seen as family money because they are married if they split. Could well be wrong here and someone could come along with advice.

My SIL is currently wrangling with her ex over money from MIL as well. She put money into their large house and lives in a flat there. He says it was a gift, she now says not. And so it rumbles on.

Such a shame how their generosity is something secretive and uncomfortable. He is the problem here, no-one else and she will know.

As they are married, this money is a marital asset, not the brother's alone.

The only things that belong to both parties in a marriage are things that are in joint names. The contents of a joint bank account, a property that is in both names, etc. Money in a bank account that is only in one persons name belongs only to that person, similarly property that is in one persons name belongs only to that person. (Though if a property is the marital home the spouse has certain rights over it which could prevent the owner selling it.)

It's not marriage that makes individual assets joint, it's divorce which forces them to be shared.

(Fibs88

Gifts from parents of over £4,000 per year are taxable and you and your brother run the risk of being reported to the taxman by your banks - large amounts are automatically reported to HMRC to prevent proceeds of crime & money laundering. As for your brother he’s keeping his wife in the dark in case of divorce. I work in banking btw!)

It appears fibs88 is telling fibs, or needs to do some more CPD if (s)he is professionally qualified.

As most have stated, inheritance tax comes into pay if the giver dies within 7 years. Aside from this, the giver does have a personal allowance each year of £3,000 with the previous year rolled towards it if it has not been used. It's classified as a Potentially Exempt Transfer (potential, because it switched to Inheritance Tax Rules, if the donor dies). Even then, it goes into taper tax, with the % of tax due decreasing year to year from the death.

On top of that, inheritance tax is then only applied if in the previous 7 years before the death, then they have gave £325k away in that period.

If we are going to give advice that people may act on, please make sure it it accurate or at least 'it's in your opinion', especially if qualifying it with some sort of status to make people consider that you are giving informed advice.

www.accaglobal.com/uk/en/technical-activities/technical-resources-search/2013/october/gifts-inheritance-tax.html

www.gov.uk/inheritance-tax

Cheers

Yes 1strangerthings you are completely right about the potentially exempt transfers. I started typing out the same about the other poster being misleading but gave up

I would note down your brother preference of not telling anyone you came into money. But I will not let him control what I can or can't say.

My parents gave my DB and myself some money a couple of years ago. He had several times the amount we had, to even out help we'd been given many years prior, when we were in need and he wasn't. It now appears SIL is unaware how much he was given. It also appears he's spent it all, and it was a substantial sum. I wouldn't have considered not telling DH about it, and I can't understand why and how DB hasn't divulged his portion to SIL. Sometimes family are just shocking

The thing is, if your parents are giving the gift to your brother and his wife, then they should tell both of them about it.

If it's just a gift for your brother, then he can do with it what he wants, but it does seem rather sneaky given what you've said about his wife.

If I was giving my adult child that amount of money and they didn't want their spouse to know, I'd be fine with it. If I wanted to be sure money would go to my GC, then I'd gift to them directly or set up a trust fund for them.

If I was in your brother's position, then I would explain why I don't want DH to know about the money and they'd be fine with that.

Tbh...if they're expecting thanks for giving it from your SIL, it needs to be a joint gift... given openly to DS and SIL.

Actually if it involves telling hmrc, then the spouse needs to know. It increases the amount of tax that needs to be paid. Unless your db takes sole care of taxes in his relationship then you can relax a bit. Would he need to inform child benefit if they receive it? Money is getting harder and harder to hide. I'm sure your parents don't want to be involved in causing finacial trouble for dsis in law, if you brother don't do things right. I could only possibly keep it quite if I was reassured she won't be negatively affected by this lie of omission.

I think your parents should talk openly about the gifts.
If I were SIL, a secret like that would break my trust and relationship with my husband’s family, because it underlines that I am and always will be an outsider.
If BIL chooses not to share, that’s on him, but she’s should know.

And as an aside, breathtaking arrogance to tell someone what they can call a partner they love. I’m a Northerner, it’s a common use. My Highland grandmother used ‘Himself’ and my East End MIL used ‘Dad’

q

If my PILS were giving a gift they intend for me to benefit from, then they should give it in the form of a joint gift. Otherwise I'll consider it was only intended for my DH.

I wouldn't be angry or upset, because he is their DS and I would never for a minute consider myself equal to him in that context from his parents POV.

His parents...his gift...my parents...my gift. Unless it's given in joint names, I wouldn't consider I had ownership over the money.

policing what husbands & wives call each other within their relationships? As long as it is said with affection & is mutually agreeable I think judgements on the language is really -words fail me! We are becoming more puritanical about our language than the Victorians in some respects. Lets get this straight - if you are in a professional or work situation - or if you are talking in the public domain & talking to/about people who are not in relationships with you or if you are talking with the intent of humiliating or insulting or demeaning than that is wrong. If you cause harm to another by your use of language than that is wrong. However discussions about whether something is socially/politically right or not is allowed as long as it is not personal & is objective & truthful.Slightly off topic

@AnneLovesGilbert totally agree the parents should put their foot down. It’s mean and greedy.