Apparently IHT on may not be too bad?

nigelbb

zagfles said:

Sarahspangles said:

ali_bear said:

Obviously if you're a farmer then even paying half the IHT everyone else pays is the end of the world. 

Farmageddon!

Don't panic, who needs farmers anyway, if farmers' offspring have to sell up because they can't afford the IHT on their inherited farm, we can just import everything we need from "the breadbasket of Europe". Oh, hang on...

If farmers' offspring have to sell up because they can't afford the IHT on their inherited farm the farmland doesn't disappear. It will be bought & farmed by someone else & probably more efficiently too.

Pat38493

Sea_Shell said:

bjorn_toby_wilde said:

The other big danger of not downsizing when you can is “if not now, when?”

I’ve seen with my parents and also the neighbours living either side of me, the downside of staying too long in a house that’s too big. As you age they become far too much to manage.

Paying for a cleaner or gardener would be an option, and using up some of your cash to make life easier reduces the IHT burden, but actually finding reliable people can be very difficult.

Personally, the main factor in being able to downsize to somewhere suitable, is if you can find detached.   

Many of us have made it to the 3/4 bed detached, and like not having direct neighbours, and want to keep it that way.    
Finding smaller properties that are the "same" just smaller is very difficult. 

Also, if you want to move to a nicer area (quieter etc), then the move will likely be sideways, financially, and so not actually release much in the way of capital, especially after fees. 

  

Hmmm - we have been looking at downsize houses on and off in the last 6 months, and we made a conscious decision not to rule out a house just because it was not detached.  We have looked at a few houses that were not.  We ruled them out, but not specifically because they were not detached.

Obviously the preference is for detached, all other things equal but we haven't completely ruled it out.  

Cobbler_tone

artyboy said:

Cobbler_tone said:

artyboy said:

RogerPensionGuy said:

zagfles said:

Albermarle said:

poseidon1 said:

RogerPensionGuy said:

bjorn_toby_wilde said:

ader42 said:

LHW99 said:

The probelsm is many farmers live on the farm, and even when the children take over most of the heavy work, they will still be helping out at busy times. They will often have nowhere but the farmhouse to live, so if they try to pass it on earlier, unless they have enough income to pay a commercial rent to the children, it will become a gift with reservation.

It is however quite straightforward to split a farm house from the fields, sheds etc. into a separate land registry title and hence a separate “property”.

They can keep the house and gift the rest. 

I know someone who did just this very thing a couple of years ago very easily and cheaply.

I suspect the reason farmers don’t pass on their “wealth” before they die is the same as other persons; self-interest in being a matriarch / patriarch and perhaps fear of needing to fund care. I’m sure we all know single elderly people rattling around in big houses, I do. Old people need to start passing their wealth down the line before they retire imho. better that than giving it to HMRC. 

We’re a couple doing exactly that. Rattling around in a big house. Our close friends are doing exactly the same.

The problem we face is a lack of anything desirable or aspirational to move into.  I can’t help thinking this is a failure of local (and national) planning. In this country we are beholden to less than 10 development companies who build identikit houses on tightly packed estates with insufficient parking or green space. I would love to move out of my house, but can’t find anything I would want to move into.

My elderly parents want to move back into the town from a nearby village but they need a small bungalow. Of the nearly 1500 new builds near us they haven’t built a single bungalow. The council tried to push the developers to include some on the last new build but in vain.

I nearly choked on my cornflakes when I saw the current government characterise the planning system as being blocked by NIMBYs. Nothing could be further from the truth. From what I’ve seen locally the developers decide what and where they want to build and dare the planning department to stop them. If blocked they appeal to the planning inspectorate who overrule the decision.

Yes indeed planning has been so inadequate on so many fronts. 

Many couples or singles living in big houses due to so may dynamics, many young people living and renting 3 people in a 3 bed flat or somtines 4, 5 or 6 in a 3 bed flat. 

There's no quick fix unfortunately, house ownership mobility in the UK is just so problematic, hassle and extremely costly, it's a crazy situation, but I expect it to get worse. 

There is also an intractable  mindset issue.

A friend of mine just hitting 70 says he would have happily decamped from  their 4 bed house  (owned over 40 years) to something smaller in the shires and free up spendable capital as a bonus. His wife will have none of it. Determined to stay in the locality where her longstanding friendship group reside, and retain the excess bedrooms for the rare occasions grown up sons return for short visits.

I feel a little sorry for him since from my single carefree perspective , he seems to be a hostage to his spouse's wants and desires in terms of where and how they live. 

Outside of this example, I professionally encountered many widows who could not see the benefit of downsizing from large family homes they could no longer really manage, but resisted any exhortation by their children to sell up and downsize, more often than not on entirely sentimental grounds.

Would like to think this sentimentality of the boomer generation in such matters will be slowly replaced by a more analytical sense of realism by the generations that follow, but I wouldn't bet on it.

It maybe sounds a bit pathetic to someone single, but there is a lot of mileage in the phrase ' Happy Wife, Happy Life '

If your friend forced a move ( if possible) and it did not work out, then he would not be having a very happy old age.

It sounds pathetic to someone married  There's the possibility of compromise eg stay local so still in contact with friends but move to somewhere smaller, and get a sofabed for visitors. 

I know a few people, couples who downsized locally making life much much more relaxed, more time with local friends and the community, plus lots more ability to travel, holidays, see people, see family all over the place and few months overseas during the UK winter is a real nice break.

However, I know couples who get their pension TFLS and move house locally to get another bedroom they don't need to keep up with the Jones. 

It takes all sorts. 

Eh what? That's just flipping nuts. 

We are 'nuts'. No kids but definitely upsizing from a 3 bed detached. Nothing to do with the Jones', just because we can and would like a big kitchen/diner and walk-in wardrobe. You are only here once, so my view is enjoy what you can and afford. The fun (quite difficult) part is finding the best location and been enjoying scouting the country at weekends. We are edging towards Norfolk but I also like Dorset and some of Shropshire. Not looking at this as a forever home and could well move to something compact as we get older. I'd agree that it is not the best logic for an old couple to be rattling around a mansion and the challenges that brings.
Property is still a decent investment.  

Oh I agree with the investment argument. And for the length of time you are in a fit state to entertain in a good size kitchen diner, then definitely go for it.

i guess I just see the situation around where I live - lots of big detached houses and old people that have lived in them for half a century or more, gradually letting them slide into disrepair. Then they are shipped off to the care/funeral home, the house goes on the market, and we all get an eyeful of the avocado bathroom suites, the kitchens with a twin tub in it, the ancient divan bedroom sets, and the ducks on the living room wall.

The estate agents have a sliding scale of terminology, going from "would benefit from some cosmetic refreshing" all the way up to "in need of complete modernisation" - the latter features more than the former.

Hopefully I never get to a point where my house ends up like that, but it's clearly an easy trap to fall into!

Haven't ruled out a barn conversion, although harder to search for. Not opposed to a single storey dwelling. There won't be an avocado bathroom suite in sight. You almost know what you are going to see based on the age and location of the property! 
I'll be into putting my own stamp on something (kitchen/bathroom, decor etc) but not a major do'er upper.

Albermarle

Triumph13 said:

I would rather skip the bungalow and go straight to the retirement apartment in our local town. Being in walking / mobility scooter range of all facilities, plus the organised social events, appeals much more than the isolation of a suburban bungalow.

I can see your logic, but probably worth pointing out that these are often not cheap and can be financially a very poor investment, especially if you buy them new.
Relative has bought a new 2 bed apartment in a nice part of Birmingham. About 85 M2 Not strictly a retirement apartment, but similar. Some central amenities. Very good quality finish. Half a Million+ service charges. 

At least if it ever needs to be sold, it is not restricted to  '55 and over', which should help.

Sea_Shell

artyboy said:

Cobbler_tone said:

artyboy said:

RogerPensionGuy said:

zagfles said:

Albermarle said:

poseidon1 said:

RogerPensionGuy said:

bjorn_toby_wilde said:

ader42 said:

LHW99 said:

The probelsm is many farmers live on the farm, and even when the children take over most of the heavy work, they will still be helping out at busy times. They will often have nowhere but the farmhouse to live, so if they try to pass it on earlier, unless they have enough income to pay a commercial rent to the children, it will become a gift with reservation.

It is however quite straightforward to split a farm house from the fields, sheds etc. into a separate land registry title and hence a separate “property”.

They can keep the house and gift the rest. 

I know someone who did just this very thing a couple of years ago very easily and cheaply.

I suspect the reason farmers don’t pass on their “wealth” before they die is the same as other persons; self-interest in being a matriarch / patriarch and perhaps fear of needing to fund care. I’m sure we all know single elderly people rattling around in big houses, I do. Old people need to start passing their wealth down the line before they retire imho. better that than giving it to HMRC. 

We’re a couple doing exactly that. Rattling around in a big house. Our close friends are doing exactly the same.

The problem we face is a lack of anything desirable or aspirational to move into.  I can’t help thinking this is a failure of local (and national) planning. In this country we are beholden to less than 10 development companies who build identikit houses on tightly packed estates with insufficient parking or green space. I would love to move out of my house, but can’t find anything I would want to move into.

My elderly parents want to move back into the town from a nearby village but they need a small bungalow. Of the nearly 1500 new builds near us they haven’t built a single bungalow. The council tried to push the developers to include some on the last new build but in vain.

I nearly choked on my cornflakes when I saw the current government characterise the planning system as being blocked by NIMBYs. Nothing could be further from the truth. From what I’ve seen locally the developers decide what and where they want to build and dare the planning department to stop them. If blocked they appeal to the planning inspectorate who overrule the decision.

Yes indeed planning has been so inadequate on so many fronts. 

Many couples or singles living in big houses due to so may dynamics, many young people living and renting 3 people in a 3 bed flat or somtines 4, 5 or 6 in a 3 bed flat. 

There's no quick fix unfortunately, house ownership mobility in the UK is just so problematic, hassle and extremely costly, it's a crazy situation, but I expect it to get worse. 

There is also an intractable  mindset issue.

A friend of mine just hitting 70 says he would have happily decamped from  their 4 bed house  (owned over 40 years) to something smaller in the shires and free up spendable capital as a bonus. His wife will have none of it. Determined to stay in the locality where her longstanding friendship group reside, and retain the excess bedrooms for the rare occasions grown up sons return for short visits.

I feel a little sorry for him since from my single carefree perspective , he seems to be a hostage to his spouse's wants and desires in terms of where and how they live. 

Outside of this example, I professionally encountered many widows who could not see the benefit of downsizing from large family homes they could no longer really manage, but resisted any exhortation by their children to sell up and downsize, more often than not on entirely sentimental grounds.

Would like to think this sentimentality of the boomer generation in such matters will be slowly replaced by a more analytical sense of realism by the generations that follow, but I wouldn't bet on it.

It maybe sounds a bit pathetic to someone single, but there is a lot of mileage in the phrase ' Happy Wife, Happy Life '

If your friend forced a move ( if possible) and it did not work out, then he would not be having a very happy old age.

It sounds pathetic to someone married  There's the possibility of compromise eg stay local so still in contact with friends but move to somewhere smaller, and get a sofabed for visitors. 

I know a few people, couples who downsized locally making life much much more relaxed, more time with local friends and the community, plus lots more ability to travel, holidays, see people, see family all over the place and few months overseas during the UK winter is a real nice break.

However, I know couples who get their pension TFLS and move house locally to get another bedroom they don't need to keep up with the Jones. 

It takes all sorts. 

Eh what? That's just flipping nuts. 

We are 'nuts'. No kids but definitely upsizing from a 3 bed detached. Nothing to do with the Jones', just because we can and would like a big kitchen/diner and walk-in wardrobe. You are only here once, so my view is enjoy what you can and afford. The fun (quite difficult) part is finding the best location and been enjoying scouting the country at weekends. We are edging towards Norfolk but I also like Dorset and some of Shropshire. Not looking at this as a forever home and could well move to something compact as we get older. I'd agree that it is not the best logic for an old couple to be rattling around a mansion and the challenges that brings.
Property is still a decent investment.  

Oh I agree with the investment argument. And for the length of time you are in a fit state to entertain in a good size kitchen diner, then definitely go for it.

i guess I just see the situation around where I live - lots of big detached houses and old people that have lived in them for half a century or more, gradually letting them slide into disrepair. Then they are shipped off to the care/funeral home, the house goes on the market, and we all get an eyeful of the avocado bathroom suites, the kitchens with a twin tub in it, the ancient divan bedroom sets, and the ducks on the living room wall.

The estate agents have a sliding scale of terminology, going from "would benefit from some cosmetic refreshing" all the way up to "in need of complete modernisation" - the latter features more than the former.

Hopefully I never get to a point where my house ends up like that, but it's clearly an easy trap to fall into!

Older generations didn't tend to change stuff for the sake of it, although there are fewer of that age group around, as time goes by.

If it still functions it may not be updated purely for "fashion" reasons.  As long as it's sound, safe and livable.  So not in "disrepair", just dated.

May as well let any buyer make their own choices on decor and fixtures and fittings.  The price should reflect that.

Some people want to move into a "perfect" (bland) house, so brand new may suit them better.

zagfles

nigelbb said:

zagfles said:

Sarahspangles said:

ali_bear said:

Obviously if you're a farmer then even paying half the IHT everyone else pays is the end of the world. 

Farmageddon!

Don't panic, who needs farmers anyway, if farmers' offspring have to sell up because they can't afford the IHT on their inherited farm, we can just import everything we need from "the breadbasket of Europe". Oh, hang on...

If farmers' offspring have to sell up because they can't afford the IHT on their inherited farm the farmland doesn't disappear. It will be bought & farmed by someone else & probably more efficiently too.

Yeah I'm sure loads of today's kids without farming in their blood dream of being a farmer when they grow up. The farms could be sold and used for other purposes like a golf course etc or could just be left to nature, as quite a lot of fields round here seem to be.

Like all the stately homes which descendants were forced to sell to pay IHT or other "death duties", and no-one wanted them so they ended up in the hands of the National Trust. Of course it doesn't really matter with too much with stately homes as they don't produce the food we need...

Moonwolf

Albermarle said:

Triumph13 said:

I would rather skip the bungalow and go straight to the retirement apartment in our local town. Being in walking / mobility scooter range of all facilities, plus the organised social events, appeals much more than the isolation of a suburban bungalow.

I can see your logic, but probably worth pointing out that these are often not cheap and can be financially a very poor investment, especially if you buy them new.
Relative has bought a new 2 bed apartment in a nice part of Birmingham. About 85 M2 Not strictly a retirement apartment, but similar. Some central amenities. Very good quality finish. Half a Million+ service charges. 

At least if it ever needs to be sold, it is not restricted to  '55 and over', which should help.

Although it is money I have saved for my retirement, if it provides care and security I want then why should I be unhappy if when I die there is less of it than a relative hoped.

Likewise, I have responsibilities for a 92 year old relative.  At the moment he is happy in his own home but if some form of more supervised care is required I'm quite happy to put everything of his into an immediate needs annuity to ensure security.  Lots of people would say that is a terrible idea as there won't be anything left then but I think my priorities should be his care security and comfort.

MallyGirl

bjorn_toby_wilde said:

The other big danger of not downsizing when you can is “if not now, when?”

I’ve seen with my parents and also the neighbours living either side of me, the downside of staying too long in a house that’s too big. As you age they become far too much to manage.

Paying for a cleaner or gardener would be an option, and using up some of your cash to make life easier reduces the IHT burden, but actually finding reliable people can be very difficult.

This is the territory I am entering with Mum and Stepdad. The house is too big for them - the bills are astronomical. It is too complicated for her if he (6 yrs older and less healthy) passes first. She is developing dementia so even the basic appliances are starting to be challenging - the full house wet ufh system is a nightmare she simply couldn't manage if it played up, which it does every time they have a power cut. It is in the middle of nowhere on such a steep drive that they use the car to get the bins down to the lane for collection.
A while back they did go and look at a retirement 'village' somewhere in Wiltshire but it was an apartment, was too small and didn't have its own garden. Something like this may need to be revisited as a concept as their health declines further.

RogerPensionGuy

One big issue some people have with downsizing is often just loosing one bedroom with all the costs actually releases no equity cash for other stuff and possibly has a cost to downsizing.

Just maybe planning rules will change a lot and we may get lots more smaller properties being built as a % that may allow people to buy and keep the builders making good profits. 

The builders are happy building small places and the government can do more help to buy crazy schemes keeping even small properties prices higher that they should be. 

It will be interesting to see how many houses actually get built in the next 4 years. 

RogerPensionGuy

A link below of interest for this thread. 

***

https://www.theguardian.com/money/2025/jan/13/pension-annuities-are-back-in-vogue-heres-how-to-get-the-best-value