Anyone had the inheritance tax talk with a parent?

[TimeFlying]

Who although understands about the tax the gov will collect, equally seems reluctant to deal with it?

My DF has been ‘careful’ with his money all his life. He’s isn’t naturally generous
Now he’s in his 90’s and is going to be over the IHT threshold. So he’s worrying about money but doing nowt about it.
I’ve listened to him and outlined his options including giving it to a charity. I’m the only person left in his immediate family.
he just doesn’t react or engage even tho he’s worried. I’m being as a patient as I can muster but I fear the gov is going to get a chunk of money which I and my family could really use right now.

i just needed to offload. I know I can’t change the person; I realise it’s his money. It’s frustrating that he just wont give anything away and never has.

@CaptionChaos this was exactly my ILs! And yet the message was 'I'm saving it for the children'. All the children were adults and OK none of them were in dire financial straits but they all had individual challenges which money would have been very helpful for.

Thankfully MIL was more switched on and we got them to do mirror wills so she inherited the lot. At the time there had been a lot of publicity about David Cameron's mum giving him a huge tax free gift to avoid inheritance tax so she was very up for this.

I presume "the inheritance tax conversation" goes something like......when you die you will.have to pay tax on your estate. We have to find a way to avoid this as we want to have as much of your money as possible once you die.

If I had had a conversation like that with my parents they would have been absolutely disgusted with me. I was not brought up to feel any entitlement to an inheritance. I was not brought up to wilfully find ways of avoiding taxes.

Some of the comments on here provide a really intersting glimpse into the mindset of entitled tories. Many of you just seem childish dependent on your parents

"She has my sympathy if her Dad falls into the later camp". You are talking about an individual human being how has the right to make his own choices.

"Talked about how much is going to be paid from her substantial fortune" - how much perfectly legitimate tax will have to be paid when a wealthy person dies.

My father was quite clear ..... his planning had one aim. To make sure my mother could be looked after in the event that her health failed and he died before him. He was quite upfront ... if that objective was fulfilled then we could have anything that was left. He had absolutely no interest in making any sort of plans which might benefit his children....as far as he was concerned we were adults and could look after ourselves. Not his problem.

This.

I think once you are a certain age engaging in legal nonsense seems just that.

Feel grateful if anyone leaves you anything and don’t depend on it. Count your blessings.

First of all IHT is paid OUT OF THE ESTATE OF THE DECEASED PERSON. So no beneficiary has to pay this.
If the OPs DF is a widow he may, as others have pointed out, have an IHT threshold of 1M - that’s one million pounds! If he has an estate of 1.5 mil, IHT will be paid on 500k, that’s 200k payable. This will mean his actual estate is £1,200,000.
Assuming that the vast majority of his wealth is tied up in property, much of that wealth will have been acquired by doing very little other than buying a house when it was cheap and watching said house increase in value exponentially.
Presumably the OP has done very little to acquire this inheritance?

I understand the frustration. My dm moans about IHT but when I researched ways of reducing this she didn’t want to do anything but carried on moaning! Drives me nuts.

Is it a stately home ......his money is his business he's probably done an enquiry release and living it up so you don't get your hands on it.

I presume "the inheritance tax conversation" goes something like......when you die you will.have to pay tax on your estate. We have to find a way to avoid this as we want to have as much of your money as possible once you die.

If I had had a conversation like that with my parents they would have been absolutely disgusted with me. I was not brought up to feel any entitlement to an inheritance. I was not brought up to wilfully find ways of avoiding taxes.

I absolutely agree with this.

Just leave him alone with his money, OP. Even if you're very anti IHT, it's still his money right now. And he can do as he pleases with it. You said he understands the tax situation, so maybe he just doesn't want to do anything.

If she has a very substantial fortune, what's wrong with her estate paying inheritance tax?
So many of these posts are framed as if people think they're doing their parents a favour, when it's really just about wanting to inherit everything, when any inheritance is already going to be sizeable, even after tax.

The inheritance tax conversation doesn't always go like this.

Sometimes it is the parent who initiates the conversation because they are intelligent enough to understand that they will die one day in the not too distant future and they want to manage their affairs efficiently so as to help the next generation. This could be financial planning or it could be planning in other ways. I intend to do it for my children when I am post retirement as I see it as a loving act by the parent, though I understand that not every elderly person wants to show their affection in this particular way and that's up to them.

I also note that some people on this thread are assuming that there are always 2 parents but of course that is not true in many cases due to divorce, death etc.

If you have already brought it up and he's done nothing then there's little you can do. Some people just get funny about discussing money etc. Your prob not going to save much now with his age.

@CaptionChaos

It doesn't taper until 3 years.

There may be two allowances, if your Mum didn't use hers and passed all to your Dad. Then there is the potential for extra for the residential allowance. It can be as much as a million tax free.

He might know what's due and just think that's OK, given what the net figure will be to his beneficiaries. Or he might have made charitable gift provision in his will to gain additional allowances.

So long as he has a will declaring his choices.

Thanks again for a wonderful insight into the tory mindset.

You are right....not every person wants to "show their affection" by making sure their children get as much of your money as possible!!

Many people might even think the best way to use your money to "help the next generation" is actually to pay inheritance tax!

But then you don't mean "the next generation" ...you mean the next generation of your family.

Yes I know it's all perfectly legal and I know that your really do think that there is nothing unusual in your world view. But actually very few people in this country are able to even think about these issues in the way you do.

And please dont try the "I'm not a tory" line. This is pure right wing conservative thinking....the normalisation of capital accumulation within a small, privileged group at the expense of everyone else.

I am confused by your statement 'I fear the gov is going to get a chunk of money which I and my family could really use right now.' Surely your family will receive potentially £500,000+ in inheritance (assuming he owns a house), which is enough for anyone, however much you might like more?

If any child of mine started 'outlining the options' about what I could do with my own money, I'd be leaving it to the cats' home.

It is pure greed. And a sense of entitlement to money that has not been earned by the person who believes that they are entitled to it. I consider myself incredibly fortunate to be in a position to "lose" some of "my" inheritance to inheritance tax, because the truth is, it was never "mine" to lose in the first place. It is sheer good fortune that my parents will - assuming that care costs don't eat everything - be in a position to pass something on. Many people don't have that good fortune, so it's entirely right that at least some of their estate should go in taxes. Neither my parents nor I would seek to dodge that.

You sound like my parents! The thought of their reaction is quite funny really. More seriously.....it does show how people are different. I am amazed that there are people in the world who would even think in this way. And the poster above is right....I do know one couple who have received very substantial amounts of cash from parents / in laws who dont want to pay tax when they die. They have voluntarily handed it over, and seem to think this is just a normal part of life.

It's all perfectly legal, but to me, the thought of receiving money like that is odd. It's just not how I think an independent adult should live. It just seems a childish way of life.

I'm sure you know the wealthiest number one citizen Charles received all his mother bequeathed to him with taxes removed as the RF are exempt. Even if they were not exempt they won't ever be poor for generations to come. If they use 1/100000 of the land they own to build affordable rented housing alone it won't affect their lifestyle. The Crown still be able to pay for all the butlers, nannies, chefs, assistants, press secretaries etc and in at least 10yrs they'll recoup the cost of building and begin to break even.
Many of the wealthiest people are so because their parents or those before them preserved their wealth and handed it down together with an influential network to make like easier and leave room to focus on interest instead of just work for the sake of it.

Ex FiL died leaving estate worth iro £3m. He was very astute about money so there was some astonishment among the family that he had done no tax planning at all. He could have bought each of his dgc a house but didn’t. Could have made bequests to charity but didn’t. Massive chunk went to the Treasury. Nobody could understand it.

Yes, I quite agree. All the more reason for the state to try to close the existing loopholes so that wealth is distributed more fairly. And as a republican, I would gladly include the RF in that!

You're correct that what I mean is that IHT planning is designed to help the next generation of your own family, yes that is obvious.

As you say, it's perfectly legal and it's even legal to be a Tory. You don't get to decide how people choose to organise their own financial affairs and whether they would rather give more to the State or their children. It's up to them.

I'm a floating voter actually and planning to vote Labour at the next election. They might make IHT planning illegal in which case I won't do it for my children (but then again, they never have).

But we are all products of our upbringing, so it's not surprising when our parents change tack or start ignoring the inevitable we are on an anonymous forum, mulling it over. It's sometimes hard to have these conversations in real life.
For us it's the disbelief that our penny wise parents are turning into pound foolish oaps.
My own parents were busy traveling, laughing about some acronym about spending all the money on cruises ten years ago while I was barely keeping my head above water.
I'm now supporting them and their serious ill health but only out of duty, any childhood love has drained away over the last 25 years. Not because of the actually money but because it's hard to keep smiling and quiet when having your nose rubbed in it.

Perhaps he was happy to contribute a fair amount of tax from his estate, and he felt that he was already leaving more than enough to his fortunate offspring?

"spending the children's inheritance" is a joke often bandied about - sometimes the joke has a lot of truth in it.

Sorry to hear that your parents were so insensitive to your financial need - it's no joke. I understand what you mean about it's not because of the actual money, more the lack of sensitivity that damaged your relationship with them.

I think it's entirely reasonable to be upset if a wealthy parent leaves their child to really struggle financially without offering any help. That is incomprehensible to me.

I also think it's fair enough to be pissed off if parents have squandered their savings on luxuries without making adequate provision for their own old age.

Neither of those scenarios are remotely comparable to a parent who is unwilling to try to dodge inheritance tax so that their very fortunate child(ren) can get an even bigger proportion of unearned wealth on the parent's death.