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It said on the News this morning that such loans must be in writing.
I can see that it makes common sense to put it in writing - for example if one party dies or divorces or in the event of a dispute, etc. but why is it compulsory?
Are there tax implications? I suppose it might be regarded by the IR as a life time gift?
I can see that it makes common sense to put it in writing - for example if one party dies or divorces or in the event of a dispute, etc. but why is it compulsory?
Are there tax implications? I suppose it might be regarded by the IR as a life time gift?
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In reply to Trangia:
Do you have a link maybe. "must" is a strong word, I would have thought that maybe for "loans"above £3000 for the reasons you allude to, that IR night take an interest.
Do you have a link maybe. "must" is a strong word, I would have thought that maybe for "loans"above £3000 for the reasons you allude to, that IR night take an interest.
In reply to Trangia:
In ways I can see that having the loan defined on paper could help with things like any benefit entitlement.
I was unemployed for a few months recently and despite owing a load of cash to my parents I technically own my house and this had an impact on my benefit entitlement.
In ways I can see that having the loan defined on paper could help with things like any benefit entitlement.
I was unemployed for a few months recently and despite owing a load of cash to my parents I technically own my house and this had an impact on my benefit entitlement.
In reply to Trangia:
There's no law I'm aware of that says any loan between two individuals must be in writing but one or other party may find it advantageous to do so (or not). The existence of documentation might be useful to HMRC to prove a payment from parent to child was not a Potentially Exempt Transaction but I'm buggered if I can work out how HMRC would get hold of that document from the bedroom drawer it's hidden in!!
When I lent my brother a substantial sum we documented it as a way of preventing potential family dispute and this would seem to be the main common-sense reason.
There's no law I'm aware of that says any loan between two individuals must be in writing but one or other party may find it advantageous to do so (or not). The existence of documentation might be useful to HMRC to prove a payment from parent to child was not a Potentially Exempt Transaction but I'm buggered if I can work out how HMRC would get hold of that document from the bedroom drawer it's hidden in!!
When I lent my brother a substantial sum we documented it as a way of preventing potential family dispute and this would seem to be the main common-sense reason.
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In reply to Trangia:
My parents very kindly helped me out with the deposit on my flat. They were required by my mortgage company to put it in writing that the money was a gift and it didn't have to be repaid.
My parents very kindly helped me out with the deposit on my flat. They were required by my mortgage company to put it in writing that the money was a gift and it didn't have to be repaid.
In reply to Trangia:
Whilst it sounds entirely sensible to document such transfers to prevent family feuds, you just know that is not the reason. There is the inheritance tax 7 year limit on gifts. I expect they want a bigger slice of that pie.
"... with research from Legal & General finding that parents will lend an estimated £5bn this year to help their children get on the ladder.
This £5bn figure equates to deposits for more than 300,000 mortgages, which will be used to purchase homes worth approximately £77bn – and means that the Bank of Mum & Dad will become the equivalent of a top-10 mortgage lender, and will be involved in 25% of all UK property transactions that take place this year."
http://moneyfacts.co.uk/news/mortgages/the-bank-of-mum--dad-lends-5bn-each-...
I bet someone has seen that £77Bn number and thought 'oh, we can cash in on some of that'.
Whilst it sounds entirely sensible to document such transfers to prevent family feuds, you just know that is not the reason. There is the inheritance tax 7 year limit on gifts. I expect they want a bigger slice of that pie.
"... with research from Legal & General finding that parents will lend an estimated £5bn this year to help their children get on the ladder.
This £5bn figure equates to deposits for more than 300,000 mortgages, which will be used to purchase homes worth approximately £77bn – and means that the Bank of Mum & Dad will become the equivalent of a top-10 mortgage lender, and will be involved in 25% of all UK property transactions that take place this year."
http://moneyfacts.co.uk/news/mortgages/the-bank-of-mum--dad-lends-5bn-each-...
I bet someone has seen that £77Bn number and thought 'oh, we can cash in on some of that'.
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In reply to dread-i:
But, as I wrote above, how does HMRC gain knowledge of the documentation? Without the document, that loan will be explained as a gift on death of parent(s) and subject to IHT taper relief, so where does HMRC find the proof?
> Whilst it sounds entirely sensible to document such transfers to prevent family feuds, you just know that is not the reason. There is the inheritance tax 7 year limit on gifts. I expect they want a bigger slice of that pie.
But, as I wrote above, how does HMRC gain knowledge of the documentation? Without the document, that loan will be explained as a gift on death of parent(s) and subject to IHT taper relief, so where does HMRC find the proof?
In reply to Trangia:
I seem to be the only person in the bloody universe who has never had any family members with a pot to piss in, and so have never been able to get any financial help from them at all.
In fact, I have to send money back to my mum to help her keep the gas on.
Garrrrrr..
I seem to be the only person in the bloody universe who has never had any family members with a pot to piss in, and so have never been able to get any financial help from them at all.
In fact, I have to send money back to my mum to help her keep the gas on.
Garrrrrr..
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In reply to Trangia:
One reason might be that HMRC could treat it as income unless you can show otherwise and hit you with a big income tax bill.
One reason might be that HMRC could treat it as income unless you can show otherwise and hit you with a big income tax bill.
In reply to BnB:
>... so where does HMRC find the proof?
When they send you a tax demand for sheds loads of cash, then you panic and dig through all those old, but important bits of paper.
TBH a gift may be better than a loan, as it doesn't form part of someones estate. It may be in your interest to not look too hard for that bit of paper, in some cases.
>... so where does HMRC find the proof?
When they send you a tax demand for sheds loads of cash, then you panic and dig through all those old, but important bits of paper.
TBH a gift may be better than a loan, as it doesn't form part of someones estate. It may be in your interest to not look too hard for that bit of paper, in some cases.
In reply to BnB:
Surely the documentation is there for if it is requested rather than for them to spy, same as up to date accounts for any tax related scenario!
> But, as I wrote above, how does HMRC gain knowledge of the documentation? Without the document, that loan will be explained as a gift on death of parent(s) and subject to IHT taper relief, so where does HMRC find the proof?
Surely the documentation is there for if it is requested rather than for them to spy, same as up to date accounts for any tax related scenario!
In reply to ThunderCat:
You're not alone, my wife and I often wish we could have had help with a deposit or anything just to have made life easier at times. The flip side is that I had things growing up that I value more than money now, and everything we have we have build and earned ourselves.
I don't need to send money to my parents but worry about them in other ways, grrr.
Cheers
Toby
You're not alone, my wife and I often wish we could have had help with a deposit or anything just to have made life easier at times. The flip side is that I had things growing up that I value more than money now, and everything we have we have build and earned ourselves.
I don't need to send money to my parents but worry about them in other ways, grrr.
Cheers
Toby
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In reply to Toby_W:
I think it's given me a more sensible (and sometimes obsessive) attitude to money. I think when I first moved out and went to uni, and the got my first real job, went mental , overspent, ran up huge debts...then had that lightbulb moment and now am the sensible one.
I think I'm deemed to be 'well off' by the rest of the family (I'm not... I just save hard and try to differentiate between stuff I want and stuff I need( who tend to swarm a bit when I visit home....so I tend to keep visits quiet and just see my mum.
And I live 200 miles away from them, which helps.
> You're not alone, my wife and I often wish we could have had help with a deposit or anything just to have made life easier at times. The flip side is that I had things growing up that I value more than money now, and everything we have we have build and earned ourselves.
> I don't need to send money to my parents but worry about them in other ways, grrr.
I think it's given me a more sensible (and sometimes obsessive) attitude to money. I think when I first moved out and went to uni, and the got my first real job, went mental , overspent, ran up huge debts...then had that lightbulb moment and now am the sensible one.
I think I'm deemed to be 'well off' by the rest of the family (I'm not... I just save hard and try to differentiate between stuff I want and stuff I need( who tend to swarm a bit when I visit home....so I tend to keep visits quiet and just see my mum.
And I live 200 miles away from them, which helps.
1
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In reply to dread-i:
HMRC's knowledge of the deceased's estate relies on information provided (usually) by the offspring who are hardly likely to add the loan back into the calculation for probate.
Exactly. I can't think of many circumstances in which it would pay any party to have made the document public. I'm just wondering if a write-off of the loan at death of both parents would be a way around the IHT implications of a gift that had not had the benefit of a 7 year taper. I'm sure plenty of accountants have asked the same question.
> >... so where does HMRC find the proof?
> When they send you a tax demand for sheds loads of cash, then you panic and dig through all those old, but important bits of paper.
HMRC's knowledge of the deceased's estate relies on information provided (usually) by the offspring who are hardly likely to add the loan back into the calculation for probate.
> TBH a gift may be better than a loan, as it doesn't form part of someones estate. It may be in your interest to not look too hard for that bit of paper, in some cases.
Exactly. I can't think of many circumstances in which it would pay any party to have made the document public. I'm just wondering if a write-off of the loan at death of both parents would be a way around the IHT implications of a gift that had not had the benefit of a 7 year taper. I'm sure plenty of accountants have asked the same question.
In reply to Trangia:
Asside from HMRC's interest, formal paperwork may protect both parties involved with a private cash loan.
If party A makes a cash loan to party B, and B dies before repaying the loan, A is very unlikely to get the money back from B's estate without formal proof that the loan exists.
If A dies then there could be inheritance tax implications for B.
Asside from HMRC's interest, formal paperwork may protect both parties involved with a private cash loan.
If party A makes a cash loan to party B, and B dies before repaying the loan, A is very unlikely to get the money back from B's estate without formal proof that the loan exists.
If A dies then there could be inheritance tax implications for B.
In reply to ThunderCat:
And this is where the whole system gets unfair, when achieving something relatively basic is reliant on your parents being minted.
But saying this, why should someone's parents have to give their cash to the kids even if they are wealthy enough to do so?
I was lucky enough to be able to borrow money from parents but I'd rather it if I didn't have to as this would effectively make my earnings/savings worth more in real terms.
> I seem to be the only person in the bloody universe who has never had any family members with a pot to piss in,
And this is where the whole system gets unfair, when achieving something relatively basic is reliant on your parents being minted.
But saying this, why should someone's parents have to give their cash to the kids even if they are wealthy enough to do so?
I was lucky enough to be able to borrow money from parents but I'd rather it if I didn't have to as this would effectively make my earnings/savings worth more in real terms.
In reply to Trangia:
One point that is totally overlooked in all this is that this is a single generation phenomenon based on an affluent postwar generation who enjoyed free education, high employment ratios, good pensions and affordable houses. All this money flooding down from this generation in the main part just keeps the next generation afloat. I doubt very much that the receiving generation will be able to support their kids in the same way.
One point that is totally overlooked in all this is that this is a single generation phenomenon based on an affluent postwar generation who enjoyed free education, high employment ratios, good pensions and affordable houses. All this money flooding down from this generation in the main part just keeps the next generation afloat. I doubt very much that the receiving generation will be able to support their kids in the same way.
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In reply to DerwentDiluted:
Im hoping that the 'receiving' generation doesn't have an kids herself and supports me in my old age...
> One point that is totally overlooked in all this is that this is a single generation phenomenon based on an affluent postwar generation who enjoyed free education, high employment ratios, good pensions and affordable houses. All this money flooding down from this generation in the main part just keeps the next generation afloat. I doubt very much that the receiving generation will be able to support their kids in the same way.
Im hoping that the 'receiving' generation doesn't have an kids herself and supports me in my old age...
2
In reply to DerwentDiluted:
Another way of looking at it is that inheritance wealth gets locked into less useful parts of the economy in terms of economic growth potential. Also the very rich families tend to get richer the rich hold steady and those without wealthy parents get more and more left behind.
I'd add that my experience is that many middlingly-wealthy, middle class folk say they are completely against tax avoidance and evasion until asked about how it applies to what they have done with helping out their kids buying houses etc. Its hard to blame them though when most of their wealth may well end up paying for their care in later life. The super rich that I know do things properly in law, with trusts etc, that retain as much tax advantage as possible. I think we desperately need to sort out the linked care cost and inheritance issues across the board to make things fairer... as a for instance, the cap on care costs that this government promised on its manifesto (and we know how important such promises are to the government in the JD dispute) have failed to materialise. Currently the poor seemed locked out, the middle classes hammered by care costs and the super rich are laughing all the way to the offshore bank. Such situations are simply not politically stable.
Another way of looking at it is that inheritance wealth gets locked into less useful parts of the economy in terms of economic growth potential. Also the very rich families tend to get richer the rich hold steady and those without wealthy parents get more and more left behind.
I'd add that my experience is that many middlingly-wealthy, middle class folk say they are completely against tax avoidance and evasion until asked about how it applies to what they have done with helping out their kids buying houses etc. Its hard to blame them though when most of their wealth may well end up paying for their care in later life. The super rich that I know do things properly in law, with trusts etc, that retain as much tax advantage as possible. I think we desperately need to sort out the linked care cost and inheritance issues across the board to make things fairer... as a for instance, the cap on care costs that this government promised on its manifesto (and we know how important such promises are to the government in the JD dispute) have failed to materialise. Currently the poor seemed locked out, the middle classes hammered by care costs and the super rich are laughing all the way to the offshore bank. Such situations are simply not politically stable.
Post edited at 15:20
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In reply to Offwidth:
That's a better way of articulating my point, I think in 30 yrs time there will have been a fundamental shift in the socio-economic landscape in the UK. And I can't see it being pretty. Never going to workers, overworkers, and the super rich. Keith Joseph's 'trickle down' theory looks a lot like 'hoover up' to me.
> Currently the poor seemed locked out, the middle classes hammered by care costs and the super rich are laughing all the way to the offshore bank. Such situations are simply not politically stable.
That's a better way of articulating my point, I think in 30 yrs time there will have been a fundamental shift in the socio-economic landscape in the UK. And I can't see it being pretty. Never going to workers, overworkers, and the super rich. Keith Joseph's 'trickle down' theory looks a lot like 'hoover up' to me.
3
In reply to DerwentDiluted:
But that was going to happen anyway, with increased globalisation. Living standards are equalising in the world - quite rightly so - but the effect of that on the West will be a reduction in standards.
But that was going to happen anyway, with increased globalisation. Living standards are equalising in the world - quite rightly so - but the effect of that on the West will be a reduction in standards.
1
In reply to ThunderCat:
Does it make you feel any better to know that my Dad has more than enough properties and 'pots' of his own but still didn't give me any financial help? Not that I would have asked or accepted, but not everyone who's parents have money actually spend any of it.
> I seem to be the only person in the bloody universe who has never had any family members with a pot to piss in, and so have never been able to get any financial help from them at all.
> In fact, I have to send money back to my mum to help her keep the gas on.
> Garrrrrr..
Does it make you feel any better to know that my Dad has more than enough properties and 'pots' of his own but still didn't give me any financial help? Not that I would have asked or accepted, but not everyone who's parents have money actually spend any of it.
In reply to ThunderCat:
You and me, Thundercat, you and me. On both counts [the second in spades]. For both Mrs Abseil and me pooooor self, oh well, mustn't grumble.... Grrrrrrrrrrrr.
> I seem to be the only person in the bloody universe who has never ..... been able to get any financial help from them at all.
> In fact, I have to send money back to my mum to help her keep the gas on.
You and me, Thundercat, you and me. On both counts [the second in spades]. For both Mrs Abseil and me pooooor self, oh well, mustn't grumble.... Grrrrrrrrrrrr.
In reply to Trangia:
I would have though inheritance tax would be the main consideration. Most parents assisting their children to purchase a first home are likely to be between 50 and 60, I suspect they are planning to live at least another seven years.
I would have though inheritance tax would be the main consideration. Most parents assisting their children to purchase a first home are likely to be between 50 and 60, I suspect they are planning to live at least another seven years.
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In reply to stubbed:
I just posted that me and Mrs Abseil are and were in the same boat as Thundercat, so thanks a lot for posting. I don't know what to say... but your post is broadening my mind a bit.
> Does it make you feel any better to know that my Dad has more than enough properties and 'pots' of his own but still didn't give me any financial help? Not that I would have asked or accepted, but not everyone who's parents have money actually spend any of it.
I just posted that me and Mrs Abseil are and were in the same boat as Thundercat, so thanks a lot for posting. I don't know what to say... but your post is broadening my mind a bit.
In reply to stubbed:
Doesn't make me feel any better or worse if I'm honest.
I don't think there's anything wrong with helping your kids out at all - if that's how my post came across then that's not how it was intended. I just seem to work with and know a load of people who either had help with a deposit, are set to inherit a chunk of cash or property, live at a reduced rates at parent's second properties, blah blah blah...and I sometimes thinl 'Christ, that would be nice'
I even used to work with a bloke in his mid 40's who had a fairly 'relaxed' attitude to work, savings, security, etc, lived with his elderly parents and was fairly up front in admitting that he was just waiting for them to die so that him and his brother could inherit the house and sell it. Nice.
But we've helped our daughter our with deposits in the past, helped her out with wedding costs, etc, and know that when we pop our clogs she'll be the sole beneficiary of anything we leave behind.
It's just a bit of good old fashioned envy
> Does it make you feel any better to know that my Dad has more than enough properties and 'pots' of his own but still didn't give me any financial help? Not that I would have asked or accepted, but not everyone who's parents have money actually spend any of it.
Doesn't make me feel any better or worse if I'm honest.
I don't think there's anything wrong with helping your kids out at all - if that's how my post came across then that's not how it was intended. I just seem to work with and know a load of people who either had help with a deposit, are set to inherit a chunk of cash or property, live at a reduced rates at parent's second properties, blah blah blah...and I sometimes thinl 'Christ, that would be nice'
I even used to work with a bloke in his mid 40's who had a fairly 'relaxed' attitude to work, savings, security, etc, lived with his elderly parents and was fairly up front in admitting that he was just waiting for them to die so that him and his brother could inherit the house and sell it. Nice.
But we've helped our daughter our with deposits in the past, helped her out with wedding costs, etc, and know that when we pop our clogs she'll be the sole beneficiary of anything we leave behind.
It's just a bit of good old fashioned envy
Post edited at 17:06
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In reply to abseil:
It's good to grumble now and again....
> You and me, Thundercat, you and me. On both counts [the second in spades]. For both Mrs Abseil and me pooooor self, oh well, mustn't grumble.... Grrrrrrrrrrrr.
It's good to grumble now and again....
1
In reply to ThunderCat:
Green-faced smiley very appropriate, then...
> It's just a bit of good old fashioned envy
Green-faced smiley very appropriate, then...
In reply to ThunderCat:
Too right. I enjoyed it. In fact I think I'll have another good grumble about something else in a minute......
> It's good to grumble now and again....
Too right. I enjoyed it. In fact I think I'll have another good grumble about something else in a minute......
In reply to ThunderCat:
>
I am with you all of my mates who have purchased houses have had significant help from parents for deposits etc. My family has f all money so no help for me but that doesn't bother me, and I think fair play to my mates and their families. I am firmly in the camp of if a parent wants to spend their own money on helping their kids then that is exactly what they should do. If I have kids that is what I will do. I would also abolish inheritance tax!
> Doesn't make me feel any better or worse if I'm honest.
> I don't think there's anything wrong with helping your kids out at all - if that's how my post came across then that's not how it was intended. I just seem to work with and know a load of people who either had help with a deposit, are set to inherit a chunk of cash or property, live at a reduced rates at parent's second properties, blah blah blah...and I sometimes thinl 'Christ, that would be nice'
>
I am with you all of my mates who have purchased houses have had significant help from parents for deposits etc. My family has f all money so no help for me but that doesn't bother me, and I think fair play to my mates and their families. I am firmly in the camp of if a parent wants to spend their own money on helping their kids then that is exactly what they should do. If I have kids that is what I will do. I would also abolish inheritance tax!
Post edited at 21:19
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In reply to BnB:
Strangely enough I've just done exactly that. Declared loans and gifts that HMRC would probably never have found out about otherwise. Mainly because it's the right thing to do, but with a nod to the possible prison sentence if caught out.
> HMRC's knowledge of the deceased's estate relies on information provided (usually) by the offspring who are hardly likely to add the loan back into the calculation for probate.
Strangely enough I've just done exactly that. Declared loans and gifts that HMRC would probably never have found out about otherwise. Mainly because it's the right thing to do, but with a nod to the possible prison sentence if caught out.
1
In reply to ThunderCat:
Well I got a several hundred off my dad about 17 years ago when my partner and I arrived broke in Ireland after bailing out of a failed attempt to make a living in London. We needed the money for a rental deposit and first months rent up front. Aside from that, nothing. I wouldn't ask unless it was dire, like facing homelessness.
However years later, my partner received her late mother's inheritance and with that, we could put down a deposit on a place and get a mortgage. Without that we could not afford where we are now.
Well I got a several hundred off my dad about 17 years ago when my partner and I arrived broke in Ireland after bailing out of a failed attempt to make a living in London. We needed the money for a rental deposit and first months rent up front. Aside from that, nothing. I wouldn't ask unless it was dire, like facing homelessness.
However years later, my partner received her late mother's inheritance and with that, we could put down a deposit on a place and get a mortgage. Without that we could not afford where we are now.
In reply to ThunderCat:
We're twins. You should have known that I do exactly that. And pay my sister's bills too.
> I seem to be the only person in the bloody universe who has never had any family members with a pot to piss in, and so have never been able to get any financial help from them at all.
> In fact, I have to send money back to my mum to help her keep the gas on.
We're twins. You should have known that I do exactly that. And pay my sister's bills too.
In reply to ThunderCat:
My parents could have helped me, certainly. But, instead, I saved for 16 years, and then bought my house outright. If I'd been sensible, I would have bought much earlier, with a mortgage, which I would have paid back very quickly, and had a bigger, nicer house, and benefitted from the growth in property values. In 1993, I looked at houses, and saw a nice one to £133k, with six bedrooms, etc. Or a nice 2 bed detatched with garage for £80k. When I finally bought in 2002, a 2 bed semi was £166k. Hindsight is great.
My parents could have helped me, certainly. But, instead, I saved for 16 years, and then bought my house outright. If I'd been sensible, I would have bought much earlier, with a mortgage, which I would have paid back very quickly, and had a bigger, nicer house, and benefitted from the growth in property values. In 1993, I looked at houses, and saw a nice one to £133k, with six bedrooms, etc. Or a nice 2 bed detatched with garage for £80k. When I finally bought in 2002, a 2 bed semi was £166k. Hindsight is great.
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In reply to Trangia:
What is the bank of mum and dad? They spend their money and have a laugh and I earn my money and spend it how I choose. I wouldn't want it any other way
What is the bank of mum and dad? They spend their money and have a laugh and I earn my money and spend it how I choose. I wouldn't want it any other way
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In reply to Big Ger:
It's increasingly spooky mate. I'm going to have a word with mumsy
> We're twins. You should have known that I do exactly that. And pay my sister's bills too.
It's increasingly spooky mate. I'm going to have a word with mumsy
In reply to ThunderCat:
also, not everyone who's parents have money get to inherit it either. My Dad tells me he's leaving everything to his much younger wife (not my Mum) who will leave it to her own children. Ok, whatever, at least I don't need to worry about inheritance tax!
It's his money, he can do what he likes with it...
also, not everyone who's parents have money get to inherit it either. My Dad tells me he's leaving everything to his much younger wife (not my Mum) who will leave it to her own children. Ok, whatever, at least I don't need to worry about inheritance tax!
It's his money, he can do what he likes with it...
Post edited at 09:29
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In reply to Trangia:
Mines a bit of an unusual one with regards to the bank of mum and dad.
My Dad has 8 or 9 properties yet hasn't given me anything towards a deposit, I did get a small inheritance when I was 18 but a good chunk of that was spent on my degree (no uni debt). So I brought my first house when I was 28, the deposit and refurbishment costs being funded by my savings and whatever else I had left, I'm now (at 31) looking at purchasing a second one.
My girlfriend however has less well off but a far more generous account at the mum and dad bank. They paid all here uni fee's and last year brought our house outright for us so. So we live up in the lakes and I rent my house(s) out. The house is fully in my girlfriends name (as it should be) but not having any mortgage / rent to pay is an obvious advantage.
Although I'll eventually inherit / take over half of my dads little empire he has given me very little direct finical support in life, maybe it's because he was self made he expects me to be as well, I don't know. I guess it depends on how you view wealth and success, if you view it in isolated lumps, limited to a single person in a single lifetime or if you view it across a family line over multiple generations of which I just do my part to further it's advancement.
For me, I take the latter view, wealth is immortal by nature, it's not limited to a human lifespan and so naturally lends its self to the multi-generational model. If you think about it, even a family on a modest income can over their lives accumulate a fair amount of capital, which can then be passed on and further built on. Once it gets to the point where it's large enough to provide a homes and a sustainable income for the family line then baring any major collapse your family can live in comfort almost indefinitely, what can you buy better than that?
Mines a bit of an unusual one with regards to the bank of mum and dad.
My Dad has 8 or 9 properties yet hasn't given me anything towards a deposit, I did get a small inheritance when I was 18 but a good chunk of that was spent on my degree (no uni debt). So I brought my first house when I was 28, the deposit and refurbishment costs being funded by my savings and whatever else I had left, I'm now (at 31) looking at purchasing a second one.
My girlfriend however has less well off but a far more generous account at the mum and dad bank. They paid all here uni fee's and last year brought our house outright for us so. So we live up in the lakes and I rent my house(s) out. The house is fully in my girlfriends name (as it should be) but not having any mortgage / rent to pay is an obvious advantage.
Although I'll eventually inherit / take over half of my dads little empire he has given me very little direct finical support in life, maybe it's because he was self made he expects me to be as well, I don't know. I guess it depends on how you view wealth and success, if you view it in isolated lumps, limited to a single person in a single lifetime or if you view it across a family line over multiple generations of which I just do my part to further it's advancement.
For me, I take the latter view, wealth is immortal by nature, it's not limited to a human lifespan and so naturally lends its self to the multi-generational model. If you think about it, even a family on a modest income can over their lives accumulate a fair amount of capital, which can then be passed on and further built on. Once it gets to the point where it's large enough to provide a homes and a sustainable income for the family line then baring any major collapse your family can live in comfort almost indefinitely, what can you buy better than that?
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In reply to Lord_ash2000:
The downside to intergenerational model? Large families.
My dad was one of 11 and my mum similar (I have lost count of my aunts & uncles). These both being good Irish Catholic families, with the bulk of their kids born between the 1930s-50s. The wealth (not much left after the raising of their families) of their parents being diluted over one generation.
The downside to intergenerational model? Large families.
My dad was one of 11 and my mum similar (I have lost count of my aunts & uncles). These both being good Irish Catholic families, with the bulk of their kids born between the 1930s-50s. The wealth (not much left after the raising of their families) of their parents being diluted over one generation.
In reply to Trangia:
Earth to Trangia.... "What planet are you on?"
Of course there are tax implications.
> Are there tax implications? I suppose it might be regarded by the IR as a life time gift?
Earth to Trangia.... "What planet are you on?"
Of course there are tax implications.
1
In reply to ThunderCat:
Ditto.
> I seem to be the only person in the bloody universe who has never had any family members with a pot to piss in, and so have never been able to get any financial help from them at all.
> In fact, I have to send money back to my mum to help her keep the gas on.
> Garrrrrr..
Ditto.
In reply to Trangia:
Not seen this but I know if someone gifts a significant amount of money and then with X yrs needs care, they are financially assessed as if they still had the money they gifted.
I suspect the government would prefer loans written down as where money is given and will come back it effects assessment of the lender and borrowers wealth - this is something folk like to be able to see.
Not seen this but I know if someone gifts a significant amount of money and then with X yrs needs care, they are financially assessed as if they still had the money they gifted.
I suspect the government would prefer loans written down as where money is given and will come back it effects assessment of the lender and borrowers wealth - this is something folk like to be able to see.
In reply to Flinticus:
Very True, if you want to keep building it up over the generations you must limit to 2 children and hope they partner up with a family of similar wealth. If you need to concentrate it again then just have the one child.
Very True, if you want to keep building it up over the generations you must limit to 2 children and hope they partner up with a family of similar wealth. If you need to concentrate it again then just have the one child.
In reply to flopsicle:
if you attempt to get round the care financial assessment by suddenly gifting assets elsewhere then the care system will rightly go after you.. but if the gifts are a few years before the care financial assessment then you are ok.
if you attempt to get round the care financial assessment by suddenly gifting assets elsewhere then the care system will rightly go after you.. but if the gifts are a few years before the care financial assessment then you are ok.
In reply to Lord_ash2000:
My wife's parents helped her with the deposit on her house.
they struck a deal that any increase in equity, then her parents got a suitable prorata share.
They made a nice return on their investment.
So that is what we will do with our children. it will help them and we will also may make a return on the investment. seems a sensible compromise.
My wife's parents helped her with the deposit on her house.
they struck a deal that any increase in equity, then her parents got a suitable prorata share.
They made a nice return on their investment.
So that is what we will do with our children. it will help them and we will also may make a return on the investment. seems a sensible compromise.
In reply to neilh:
Agreed, but even many years prior, I should think they would like to know if the 'gift' was actually a loan.
Edited to add - Not all gifts are done to circumvent care fees. Elderly parents still try to 'help' offspring financially and don't always know that the time they will need care is near enough to matter. There are also a significant number of 80 somethings who don't know how care charging works (believe it or not!).
Agreed, but even many years prior, I should think they would like to know if the 'gift' was actually a loan.
Edited to add - Not all gifts are done to circumvent care fees. Elderly parents still try to 'help' offspring financially and don't always know that the time they will need care is near enough to matter. There are also a significant number of 80 somethings who don't know how care charging works (believe it or not!).
Post edited at 11:29
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