A very long, despairing post

RAS

Gingernutty wrote: »

Brother 1 has had the genius idea that we can pay the Inheritance Tax in instalments with a 3% interest rate by keeping the flat let AND keep the properties.

Today, Brother 2 has emailed with the reminder that Capital Gains Tax is due on any rental income that we receive from the flat.

I think your family need to stop coding messages and start speaking the truth.

It also appears that you know a lot about your brothers' finances but they are ignorant of your parlous situation? or do they just not care?
Brother 1 has been free-loading for years and expects

Message from brother 1 - I have been free-loading for years. You two both have houses, so I want to free-load for the rest of my life.

Message from brother 2 - Excuse me but we need CASH to pay the taxes and debts and your proposal has serious tax implications for all of us.

Gingernutty wrings hands.

Brother 2 needs your support and you are not providing it.

Add to that the seriously mangled and complicated finances which mean that one person's money has been used to fund another person's costs and it is a right mess.

Gingernutty

RAS wrote: »

I think your family need to stop coding messages and start speaking the truth.

Done. I've written a big long email about my situation, the latest developments and what I want to do about the situation to Brother 1, cc'd Brother 2 and now I've thrown the grenade I'm waiting for it to go off.

Thanks for all your replies

Gingernutty

:(:(:(

And we're off.

The reply from Brother 1 was, as I suspected it would be, a variety of bluster and emotional blackmail

Ranging from "this time in five years, we'll be rich" sort of thing to "Dad never wanted the children to go homeless" - I think that one was bullet point number 5.

Brother 2 surprised me by waking up and agreeing with me - it fact he even came up with a cute little compromise..:) - sell the house first, pay off the debts and fees, split the residue and Brother 1 can move back into the flat and work to build up a good deposit.

However, it's Brother 1 that has to shift, and I've finally worked out what I think is driving him.

A close family friend of Dad's generation lost her husband and had to pay Inheritance Tax so she had to sell property to pay the money. When she sold it, she got smacked for 40% capital gains tax.

Coming from a benighted family who all have cancer or have been bereaved she's effectively a professional mourner. Permanently in black, wailing at the injustice of it all and never failing to tell anyone who'll listen about her blighted life.

When she tells us she's been visiting our parents, she actually means she's visited their grave as she does the daily (yes, daily) rounds in two neighbouring graveyards all the while making sure everyone knows about all the hard work she does at the respective graves.

Imagine that, now, in a tick Mammy Brown voice.

With tears in her eyes, she'll tell you, me, the gatepost and the wall about how they got so much money out of one poor widow. And she's disabled. And she's got children. Who've been bereaved. Or who've got cancer. Or who have been bereaved and who have got cancer. Oy vey.

That was then and this is now. I don't think Brother 1 realises that a lot can change in 4 years.

Capital Gains currently stands at 18% and there is no taper relief either - so hanging on to the properties for the next five years will be of no benefit at all.

I've sent an email explaining that to Brothers 1 and 2 with links to HMRC, tax calculator websites and Wiki and I'm just waiting now.

Bogof_Babe

I didn't think you had to pay IHT on the death of a spouse or civil partner. Certainly not having to sell the marital home due to IHT being demanded.

Would be interested in clarification on that if anyone knows.

Gingernutty

He died without a will, I'm still not entirely sure what property was sold and I'm not at all sure they were 'properly married' or not, IYSWIM

jayII

I didn't think you had to pay capital gains on your main home either!

To the OP: why don't you just tell brother two that you don't agree with brother one moving into the flat as you need your inheritance to save your own home!

There is no guarantee that brother one will actually work and save a deposit, he hasn't done so in the last 20 years so what makes brother two think he will start to now? It seems rather foolish to go down that route, to be honest!

Gingernutty

jayII wrote: »

There is no guarantee that brother one will actually work and save a deposit, he hasn't done so in the last 20 years so what makes brother two think he will start to now? It seems rather foolish to go down that route, to be honest!

TBH, Brother 1 and I have had this email flurry before - around the time our Mother died - that was 10 years ago!

Brother 2 has sometimes said to me that he thought Brother 1 must have savings somewhere. After all he's living rent free and I'd stop him there and say, don't believe it.

If we sell the house, then all three of us will have our names put on the deeds to the flat - Brother 1 ain't getting away with that too easily.

However, Brother 1 is convinced that he's saving us money and we have to try and tell him that no - we're not paying 40% tax on the entire estate and capital gains is at 18% and and and and etc....

meritaten

I dont get you at all gingernutty - you are prepared to live in penury to ensure that Bro1 lives like a prince. Make him comply with the terms of the will - he will have to anyway!

Gingernutty

meritaten wrote: »

I dont get you at all gingernutty - you are prepared to live in penury to ensure that Bro1 lives like a prince. Make him comply with the terms of the will - he will have to anyway!

*Big sigh*

Brother 1 hasn't a clue. He won't be told. He has to find out for himself before he comes around to an idea.

The fact that we are repeating a conversation that occurred 10 years ago has not dawned on him nor has the impending tax deadlines - as far as he's concerned there's always room for negotiation, wriggling and bit of ducking and diving.

He's about to find out there isn't.

The solicitor has asked for £13k up front for this 'instalments plan' idea and there's only £5k in the pot. Brother 1 has worked out that we all need to put in more money and I've just told him in the last email that I can't.

The £5k won't even pay the solicitors fees so far........

burnoutbabe

why can't the solicitor draft something to show how everyone will benefit from splitting per the will, and what the tax consequences could be.

Then do an example of the alternative to show no benefit in doing it that way.