DF giving £200k to DB

[PercyGoat]

DH & I own our house (mortgaged). We both earn good money and we work hard for it. We lack for nothing and we do treat ourselves.

My older DB lives in a house share. He hates the idea of owing money to anyone. He has a big deposit already but not enough money to buy something outright.

DF called me a few days ago. He is about to retire and his pension is not enough to cover his bills. He owns some assets (~£500k plus) in addition to main house but he does not have enough cash from pension each month. He said he also has cash savings but reluctant to spend. He did not ask but I said - don't worry i can transfer you £500 each month to help out.

Today, DM called me and said she had an argument with DF. DF is using his cash and selling some assets to buy DB £200k to buy a flat outright.

AIBU to be angry?

You do need to text your df

Hi dad I was quite happy to help with £500pm to help you liquidise your assets to fund your retirement, however I now realise it was to fund db to buy a flat even though he could borrow money through a mortgage like everyone else had to, I am not prepared to subsidise this so have cancelled the transfer.

Sounds like you don’t need the money so to fall out for it and begrudge your brother a step up seems mean spirited.

@Strawberry33

Sounds like you don’t need the money so to fall out for it and begrudge your brother a step up seems mean spirited.

It's a bit more than a 'step up', it's a fucking catapult to mortgage free home ownership!

@Strawberry33

Sounds like you don’t need the money so to fall out for it and begrudge your brother a step up seems mean spirited.

Db doesn’t need a ‘step up’ he has a large deposit, presumably a job where he could get a mortgage, he just chooses not to borrow money from a bank like normal people, but is quite happy to accept a large chunk of his parents retirement savings to buy a house.

@eldora

Speak to your DF asap and say how unfair this is.

Don’t let this happen quietly.

They can still do it but they will know they are screwing you over.

Agree. Don’t stay quiet. Its hideously unfair

Take that £500 and pay extra on your mortgage

Yanbu, I'd be raging in your shoes.... you might as well cut out the middle man and give cash to your db glad to see you're no longer sending any more money over.

You are being extremely reasonable. Sounds like your DF is taking your decency for granted a bit. Glad you have drawn a line by cancelling the £500 payments and I hope your DF doesn't cross it again.

@Shinyandnew1

don't worry i can transfer you £500 each month to help out.

I think it’s bizarre that was your first solution to his ‘problem’?!

Not, ‘well, if you can’t afford your bills then-:’
1.Carry on working

1. Sell some of your assets

Were you planning to give him £500 a month forever?!

Exactly this. My mum is having to keep working past 70 because she doesn’t have any occupational pension, just her state one. She lives with us to cut bills but still pays some rent as we had to buy a bigger house to accommodate her. We’ve promised a rent reduction at ‘some point’ but no promises have been given as to when as it depends when we can afford it. Sometimes you have to set boundaries.

@BambinaJAS

£200k is far over the gift limits. Your DB would have to pay tax on that income.

The only way this works is if your DF buys the house himself (cash), and puts your DB on the deed.

in the uk there is no gift limit. Inheritance tax would be payable if the giver dies before 7 years are up but this is scaleable.

@PinkSyCo

It seems to me you all have funny ideas about money. Your DB would rather house share, at 40 years old, than get a mortgage like most people who could afford it would do. Your DF has so little pride that he would rather take off his DD than do the normal thing,of at least trying, to live off his pension or liquidising some is his substantial assets if needs be. And you would rather bankroll a man, who doesn’t need bankrolling, than use your superfluous money to pay off your mortgage. As for your mum, perhaps she’s the only sensible one, but she doesn’t seem to get a say in anything. Weird.

That's the best summary of it.

Yes in some senses it makes sense to pass money on before death to avoid inheritance tax.

But not at the expense of making themselves short. And they should pass on equally.

DB is averse to debt, fair enough but he must be saving a huge amount by living in a house share.

I'm also curious on what your DH is saying about your giving £500 to your parents - are you giving the same to his parents?
Joint money, being fair and all that.

I don't agree with most posters that financial help should always be split equally among children. I have a friend whose sister has complex medical needs and can't always work, she's never begrudged her parents helping her sister out more (including with more money for a deposit). And if one child was rich and successful, while another was struggling to make ends meet for whatever reason (including bad life decisions), it makes no sense to give them the same amount of money. I also feel that when you're as comfortably off as the OP seems to be, getting angry about the money someone else is getting is an unbecoming waste of energy.

However this entire situation is very odd. The OP's brother doesn't need help. If he has enough money saved for a deposit he's not exactly on the breadline. His attitude that he doesn't want to owe anyone money is bizarre when he presumably owes his landlord rent every month. And I can't understand why his father would even offer help in that situation instead of just telling him to get a mortgage. Does his father know that OP's brother has savings? Is there more of a back story here? Presumably no one in this situation is completely clueless as they all seem to have made a nice pot of money, but there are some unfathomable decisions here.

DB is averse to debt, fair enough but he must be saving a huge amount by living in a house share.

I guess this is dependent on area etc but the crazy thing in London where rent is eye-wateringly expensive is that many people end up spending substantially less per month on their mortgage than they did on rent.

@gannett ill health, bereavement are some of the few reasons why parents should help their DC unequally.

Two healthy adults both working should be treated equally. To do anything else becomes favouritism and leads to resentment.

500k will easily give £500/month and still grow even with the crap interest rate at the moment. And now really isn't the time to liquidate assets either as most markets have taken a nose dive due to the war. I'd ask your DF to seek qualified financial advice before he does this.

I don't know why people keep going on about IHT. Even if the OP's father didn't survive the 7 years, the brother would only have to find 40% of the £200K (so he might have to get a mortgage after all) - and presumably the assets are half the mother's. so there would be no IHT to pay on half of it, so you are talking about needing to find £40K. Not exactly a huge amount on a house worth at least £200K and probably more by then. People act like you'd have to pay all of it "back" in tax.

And why do people always assume that anyone over 50 who makes a silly decision (assuming that you think this is silly) has dementia?

I am a bit surprised the OP offered money when she knows he has plenty of assets though. And it's also a lesson to make sure you have at least some assets in cash savings, regardless of puny interest rates,

500k will easily give £500/month and still grow even with the crap interest rate at the moment

not sure it will - interest rates are awful! Oh for the days when you earned 10% on savings (even 5%). Mind you, you could take the view that you will only live for 20 years and take out 25K a year. Has its risks but possible.

@berlinbabylon
40% of £200k is £80k

40% of 100 is 40 x 2 = 80

Who’s going to pay the service charge on the flat though?

I feel sorry for the DM.

Maybe this flat should have both you and your brothers name on. So you own half. Brother can pay you half the going rate for rent. Or no rent and he pays for the flat maintenance.

Do they, and your selfish entitled brother, realise that if they need to go into care that costs upwards of £1,200 PER WEEK? They need to keep their money, they may need it in the future. Aside from how unfair it is to help one child out and not the other.

Madness

Obviously no £500 quid a month.

Just say clearly to both your parents and your brother your parents cannot afford this and lay out what will happen if they do - no money for rising costs or a half decent old age. Follow up in an email, and get someone neutral (or anyway your DP) to check it’s calm and unemotional.

Sounds like what they need to do is downsize to fund retirement, you could say this.

It’s your bros choice not to buy - you can say this. If accepts the money he’s a shithole - don’t say this, but you could say you are sure he wouldn’t want to accept it as it just wouldn’t be responsible.

It might be your dad having a mad moment so it might pass quickly. Also surely these are also your mum’s assets? Check it’s a real plan before you Wade in.

Your dad is a cheeky fucker for taking your money. You're being taken for a mug. I'd have to say something.

Yes you have every right to feel a bit used.

Your father and brother both sound like right pieces of work.

Your mother shares those assets but everything is in your fathers name and she has no say?

That's financial abuse.

Stop the 500 obviously.
Stop telling him your business.
Support your mother.

Put money aside for HER, in case SHE needs it.

Is she happy in her marriage with a financially controlling man?

I doubt you will see any inheritance if your parents stay together, its all going to your brother.

Stop giving anything to your father.