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Anyone had the inheritance tax talk with a parent?

175 replies

TimeFlying · 03/04/2023 22:48

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.

OP posts:
SirTarquin · 05/04/2023 10:16

Whilst there are care costs not linked to care homes, only 15% of the population over 85 is in a care home. There will still be lots of people who die without significant care costs.

There will obviously be some people who die without significant care costs but once you are over 85, the risks of needing care are greater. I seriously doubt once you get to that age it is 'a lot' of people. There aren't that many people certainly when you get to 90 who are both physically ok (easily manage stairs etc) and mentally ok (no dementia, memory loss). The people I know of that age generally have problems with one or other of those - either mind is good but physically frail/mobility issues or physically ok but have dementia.

The cost of having carer visiting to the home several times a day or live in care is substantial. My guess is that there are very few people living alone over the age of 85 who don't have any care support at all - even if that is provided by family.

Of that generation it's not at all unusual to have one spouse who did all the cooking (usually but not always a woman) or to have division of labour in the relationship such that it is very hard for widow/widower to pick up and manage without help for example.

If you want to stay living in your own home, the cost of funding the support to do that will be substantial if you don't have children or other relatives to help. It really isn't unreasonable for someone to want to save to be able to look after themselves because frailty can suddenly accelerate.

Zipps · 05/04/2023 10:26

I think it's a ridiculous idea that we should all save our money in case we need care when we are over 85. We'll be spending every penny by then and have already treated/helped our dc and gc. What happens if we're penniless and need care? Oh yes the same as what happens to everyone else who has never bothered saving or investing let alone work. We're actually planning now in our mid 50's to gradually spend it and give it away over the next 30 years starting now.

ShanghaiDiva · 05/04/2023 10:58

WalkLong · 04/04/2023 20:07

Yes but that's increased to £1m if you're leaving property to children and have a predeceased spouse. (No tax if leaving it to a living spouse(.

Not necessarily as the allowance for the deceased partner is fixed at the time of their death which may
not be the current allowance. My df died over 20 years ago so the allowance which can be used for my dm’s estate is around £220k not 325

WhatATimeToBeAlive · 05/04/2023 11:08

Zipps · 05/04/2023 10:26

I think it's a ridiculous idea that we should all save our money in case we need care when we are over 85. We'll be spending every penny by then and have already treated/helped our dc and gc. What happens if we're penniless and need care? Oh yes the same as what happens to everyone else who has never bothered saving or investing let alone work. We're actually planning now in our mid 50's to gradually spend it and give it away over the next 30 years starting now.

The difference is though if you have your own money you can choose where to have your care and it is likely to be far better than social care provided by the state.

MrsSkylerWhite · 05/04/2023 11:11

No, none of my business. Rather they spent it on themselves.

Zipps · 05/04/2023 11:25

WhatATimeToBeAlive · 05/04/2023 11:08

The difference is though if you have your own money you can choose where to have your care and it is likely to be far better than social care provided by the state.

I'll just take the risk that I'll be a zombie/ vegetable and won't really care rather than miss out on all the holidays and fun in the hopefully many years before.

CaptionChaos · 05/04/2023 11:32

But in the rush to 'spend, spend, spend' there has to be a comfortable level that enough money in the bank guarantees. You might not want to be on luxury cruises at 85 (although my mum's dream is to die onboard) but not being worried about the heating, the price going up on a cup of tea in a cafe, the freedom to afford a taxi when you cat face public transport.
I think that level of comfort is below the iht threshold but having no money is really stressful.

Changeau · 05/04/2023 11:36

CaptionChaos · 05/04/2023 11:32

But in the rush to 'spend, spend, spend' there has to be a comfortable level that enough money in the bank guarantees. You might not want to be on luxury cruises at 85 (although my mum's dream is to die onboard) but not being worried about the heating, the price going up on a cup of tea in a cafe, the freedom to afford a taxi when you cat face public transport.
I think that level of comfort is below the iht threshold but having no money is really stressful.

A lot of 80+ have a very generous state pension. My MIL gets some of my fils so is getting over 300 a week and has no mortgage or rental costs. I keep encouraging her to spend as much as she can!

messybutfun · 05/04/2023 12:12

@Twiglets1 15 years ago you said your father transferred ownership to you. I do remember all the dodgy loan back schemes and the whole variety of stuff that was on offer to ‘legally’ get around inheritance tax while still living in the property. It became such an issue that new rules were introduced that were very clear that if you still benefit from the asset, its transfer will fail for IHT purposes potentially landing you with the double whammy of IHT and capital gains tax.

TAPER RELIEF IS NOT AVAlLBLE on any gifts up to the nil rate band allowance of £325,000. Those gifts will take up proportional allowance for the full 7 years and then fall outside the estate. It will be the recipient who will need to pay the tax.

It is not right wing to not want to pay tax on death. My money has been taxed (heavily) already before it was paid to me. Most people will try not to be taxed twice on their earnings, especially at 40%.

Soontobe60 · 05/04/2023 12:15

Twiglets1 · 04/04/2023 10:43

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 helped my children when they needed it - house deposit, wedding bills, childcare. By the time I die, which could be another 20+ years, they wont need the same financial support. They dont need to worry about saving up for a house deposit now.

Soontobe60 · 05/04/2023 12:17

Changeau · 05/04/2023 11:36

A lot of 80+ have a very generous state pension. My MIL gets some of my fils so is getting over 300 a week and has no mortgage or rental costs. I keep encouraging her to spend as much as she can!

State pension is nowhere near this much.

Soontobe60 · 05/04/2023 12:25

Zipps · 05/04/2023 11:25

I'll just take the risk that I'll be a zombie/ vegetable and won't really care rather than miss out on all the holidays and fun in the hopefully many years before.

The implication that everyone who is in a care home is a ‘zombie / vegetable’ is both ignorant and disgusting.

Twiglets1 · 05/04/2023 13:14

messybutfun · 05/04/2023 12:12

@Twiglets1 15 years ago you said your father transferred ownership to you. I do remember all the dodgy loan back schemes and the whole variety of stuff that was on offer to ‘legally’ get around inheritance tax while still living in the property. It became such an issue that new rules were introduced that were very clear that if you still benefit from the asset, its transfer will fail for IHT purposes potentially landing you with the double whammy of IHT and capital gains tax.

TAPER RELIEF IS NOT AVAlLBLE on any gifts up to the nil rate band allowance of £325,000. Those gifts will take up proportional allowance for the full 7 years and then fall outside the estate. It will be the recipient who will need to pay the tax.

It is not right wing to not want to pay tax on death. My money has been taxed (heavily) already before it was paid to me. Most people will try not to be taxed twice on their earnings, especially at 40%.

Please don’t spend any more time trying to analyse my/my father’s situation or his ITP. I can assure you it has been looked at carefully by tax lawyers who specialise in this area. I’m not prepared to go into details on Mumsnet, so you have no idea about the complexities of our case.
As I keep saying, there are general rules that people can read about on websites like Money Saving Expert but it is best to get professional advice if in any doubt. My last comment on this matter as it is not helpful to the OP to focus on me not her.

Twiglets1 · 05/04/2023 13:16

Soontobe60 · 05/04/2023 12:25

The implication that everyone who is in a care home is a ‘zombie / vegetable’ is both ignorant and disgusting.

That’s why it’s a risk, because it doesn’t happen to everyone.

messybutfun · 05/04/2023 13:22

I am a specialist professional.

Whilst I addressed you in my reply, it really was to everyone to explain that there is no magic wand to give away assets and still hold on to them.

But I agree, if you are the King or Queen (or a politician or one of their sponsors for that matter) you will get special treatment. Everyone else, not so much.

Twiglets1 · 05/04/2023 13:51

messybutfun · 05/04/2023 13:22

I am a specialist professional.

Whilst I addressed you in my reply, it really was to everyone to explain that there is no magic wand to give away assets and still hold on to them.

But I agree, if you are the King or Queen (or a politician or one of their sponsors for that matter) you will get special treatment. Everyone else, not so much.

You might be a specialist professional but you don’t know my situation or my fathers so 🤷🏼‍♀️

Zipps · 05/04/2023 13:58

Soontobe60 · 05/04/2023 12:25

The implication that everyone who is in a care home is a ‘zombie / vegetable’ is both ignorant and disgusting.

I was talking about me I never mentioned everyone or anyone else so calm down.
Just like I am intent on spending my own money no one else's. So why would anyone else be so bothered if I run out of money?
So many people on MN who think they are in charge of other people's lives. Get your own.

massivenamechnage · 05/04/2023 14:26

SheilaFentiman · 05/04/2023 07:52

Whilst there are care costs not linked to care homes, only 15% of the population over 85 is in a care home. There will still be lots of people who die without significant care costs.

That is a misleading figure
well off people stay in their own homes £3k a week

i know at least 4 people doing this at the moment- 2for more than 5 years

Changeau · 05/04/2023 14:42

It will be the recipient who will need to pay the tax

The estate pays.

SirTarquin · 05/04/2023 16:53

@Zipps
think it's a ridiculous idea that we should all save our money in case we need care when we are over 85. We'll be spending every penny by then and have already treated/helped our dc and gc. What happens if we're penniless and need care? Oh yes the same as what happens to everyone else who has never bothered saving or investing let alone work. We're actually planning now in our mid 50's to gradually spend it and give it away over the next 30 years starting now.

As @WhatATimeToBeAlive says: The difference is though if you have your own money you can choose where to have your care and it is likely to be far better than social care provided by the state

@Zipps I would seriously caution you against this attitude. It maybe that you've had no experience of it with elderly grandparents/aunts/uncles/parents as you are too young.

However, if you have ever had any dealings with care through social services, you would realise the huge difference between being able to pay for and choose your own care.

It isn't (as you so charmingly put it) just about being a ‘zombie / vegetable’, but basic things like mobility. Having money makes it possible to choose where you live, whether you stay in your own home, whether you can afford to pay for stair lifts/adaptations etc.

You could be perfectly fine mentally but need physical care such as catherterisation or other medical procedures, people to cook for you,help you into bed and so on. Things that could be manageable in your own home but that become costly to manage if you are dealing with one person but much cheaper if you have a load of people together in a care home.

Social care provision provided through social services/care companies is mostly poor because there is a staffing crisis and the roles are very poorly paid. You can be lucky and find one or two good people, but you are far more likely to get a better standard (as well as continuity of care personnel) if you can afford to pay for it yourself and employ people directly.

I know of someone who had fallen in his home, his government funded carer called the ambulance and the companythat employed the carer insisted they leave because an ambulance had been called and they had the next shift to go to. He was left on his own on the floor with the front door unlocked so the ambulance could get in if he arrived. If you are paying someone directly, that wouldn't happen. He wasn't a zombie/vegetable (your words) but couldn't afford to pay for someone himself so just gets base level one visit a day. a

Money means you have control over your care and your standard of living that you totally lose if you are at the behest of public funding.

SheilaFentiman · 05/04/2023 17:08

massivenamechnage · 05/04/2023 14:26

That is a misleading figure
well off people stay in their own homes £3k a week

i know at least 4 people doing this at the moment- 2for more than 5 years

It’s the official number.

as I noted, there are care costs that happen outside of a home (my mum
spends about £13k pa on this) but they are a lot less than care home costs. Obviously the value of an estate will reduce a lot quicker with the latter.

Zipps · 05/04/2023 17:36

SirTarquin sock puppet?
No I'm retiring early but thanks for your fake concern and as I stated before I'll take the risk. My money my right to spend the lot thank you. Now don't bother with another well meaning response 🙄 because I am hiding this thread.

Chippy1234 · 05/04/2023 18:17

Zips. You are being very foolish with that attitude. You never think that you will get old. My DM never did. She always thought she would be as she was. She now has some memory loss, mobility but still wants to be independent. She luckily had her house which we have sold to fund a retiement complex. Have you seen the state of social services and what they can provide? The care homes where people freely walk into each other's rooms because there arent enough staff to monitor what is going on.

Or maybe you expect any children you have to 'help' you. Certainly the Elderly parents thread is fully of children often in their 60's trying to help stubborn parents who rely on them more and more.

It will happen to us all. Money will help you to have choices.

messybutfun · 05/04/2023 18:27

Changeau · 05/04/2023 14:42

It will be the recipient who will need to pay the tax

The estate pays.

😂But all the assets have been gifted, the house will need to be sold to pay back the equity release loan, there’s not enough money left in the estate to make payments.

SirTarquin · 05/04/2023 23:05

SirTarquin sock puppet?
No I'm retiring early but thanks for your fake concern and as I stated before I'll take the risk. My money my right to spend the lot thank you. Now don't bother with another well meaning response 🙄 because I am hiding this thread.

Can anyone explain to me what this post to me is about please? I understand what a sock puppet is but I don't understand why this poster has suggested this of me.

Does she think that I am the same person as the OP or as @WhatATimeToBeAlive or someone else? I'm not but I don't get why I would be accused of being a sock puppet?

This is a very odd response. There was no 'fake concern'. What is it to me if a stranger fucks up their life? It was just advice based on life experience in the spirit of discussion on a communal message board

What on earth was this about? what a totally weird reply. Touched a nerve their I think...

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