To think that parents cannot leave money to severely disabled offspring free of IHT

[Noras]

Frankly I have been quite upset about farmers kicking up a fuss about IHT when they can transfer 3 million pounds of wealth IHT free and after that it only costs 20% which can be paid over a decade interest free.

As a parent of a disabled adult child I can only transfer one million pounds like anyone else and any unpaid IHT has to be paid over 10 years with 7% interest due.

We have other kids and can’t exclude them from our wills so that eats into the IHT allowance.

My son will struggle to work in any form of paid job.

I was discussing his placement in supported living with a social worker yesterday as a pretty likely destination

His life will inevitably be one of benefits eg universal credit and PIP

We have left % more to him due to his profound needs.

Our combined estate will face IHT charges especially with the fiscal drag.

So through no fault of my son he will live in relative poverty except for what is left after IHT into a vulnerable persons trust.

My son is used to nicer things eg holidays/ clothes etc and has some awareness of his current nicer life style even if he is not that driven by material things.

We would have to deprive ourselves of a decent retirement to ensure he is decently provided for,

I am heart broken to have given birth to someone who will live in relative poverty assuming he has a long life and the monies inherited have to cover say 45/50 years.

I am not the only parent waking up at 3am in fear of their kid’s future it’s a well known thing about parents of kids with disability.

AIBU to think that the Government should allow an IHT allowance for dependants who are classed as high needs eg PIP high or mid levels eg not really able to live independently etc? I can’t believe that they make no allowance in IHT terms for the disabled. As it is his care and needs have been an additional expense to us throughout his life eg 1:1 swimming lessons ,Ed Psych reports, SALT, private OT , personal trainers etc. This always exceeds disability benefits.

I would talk to a financial advisor. They might have a way around this by putting money in a trust.

No one who inherits 'only' a million pounds is in relative poverty.

A financial adviser/planner will help you/him use that money to provide him with a very decent income for life. Even sticking it in an instant access account will generate £40-50k before tax but obviously investments will likely perform better over time and keep up better with inflation.

Plus as a severely disabled person he is entitled to non means tested benefits. The tax and benefits system is not there to provide people with the means to afford 'nicer things' whatever their needs. YABU.

I have this worry too. My mid twenties son is in a residential care home which is dire (another story) and his situation is not going to alter. He has multiple and complex disabilities. When I visit him, I feel terrible leaving him in this so called “care” home.
He has enough awareness of being left, like a five year old. I feel I have failed him massively and no matter what I do as in challenging Social Services and the Care home itself, I don’t get anywhere.

I was advised not to leave him anything (not that I have much).

So much I could add it but it would be outing. I feel torn up inside thinking about his future once I am dead.

Why will it be £1m mot £500k

If you leave him money, he won't be able to claim universal credit- think that stops if you have savings of £16,000.

A million without having inheritance tax? That's very generous!

I thought it kicked in at 40% above about £350k for non farmers?

How are farming and disabled adults connected. Farming is vital for the entire nation, its been written about enough on recent months for you to be educated about why this is the case.

Your adult child's personal situation is not. Why will paying tax leave your adult child in relative poverty?

Pretty sure this is a fabricated thead. Tax plan like everyone else.

You have a combined one million allowance re the main house.

However clearly my son won’t inherit one million as he is not an only child and I’m not going to cut out of the will the other kids.

£300,000 over 50 years of life even if added to benefits is not a great life. A lot of the benefits would have to fund actual costs of disability eg PA expenses, taxis, additional laundry, additional breakages etc.

I’m real thanks and my son has complex needs and will most likely not be able to work unless he found an extraordinarily benign employer .

Clearly I do tax plan but there is no specific tax planning for this situation as there is no additional allowances. If your kids are not disabled there isn’t the desperate need or feeling that you have to provide for them. Normally you would expect them to get jobs etc. When your kids is disabled they are at the mercy of the State through no fault of their own,

Farming might be vital but according to the NFU itself most farms are worth below 3 million so those farmers will not be affected.

As a caring society do we think it right that if you have the misfortune to be born disabled there is little state help to assist parents to provide for their offspring via tax allowances thus the likelihood is that their kid will have a life of relative poverty.

We do accept that the disabled person is blameless and did not cause their poverty?

You won’t get much support on mumsnet. Reality is, most people cannot relate to anything you are saying. They think everyone should go to work and pay their way. They will have no understanding what you have sacrificed with a severely disabled child.

You need to get proper financial advice to set up a trust for your son. Your other children can still inherit as expected.

As a PP said, your son will not get means tested benefits if he has any savings over £16,000. Things like laundry he should not be paying for himself. Our son’s package (LA initially, now NHS CHC funded), covers his laundry costs. Accommodation will be paid so it should just be incidentals he’s paying for. A trust would allow funds to be taken for holidays etc.

I wish you luck. The thought of not being around for my son will clearly put me into an early grave. We can only do our best whilst we are here and hope we’ve planned well enough for their future.

Before people write a response just for a moment imagine that the only future for your adult child is a lifetime on benefits.

Your child might have worked their hardest at school and even got decent qualifications. They might be even happy to work hard outside school. They are depressed and at times suicidal because they know they have few life chances no matter how hard they work. If they get any form of employment it would have to be heavily scaffolded and supported.

Their brain is wired such that they talk to themselves or have mad moments of agitation etc. They might struggle to do simple tasks like cleaning or have muscle weakness so can’t do labouring jobs. Frankly using a microwave might be hazardous for them. They leave a mess of broken things.

If my child had zero insight it would be better but my son has insight, He’s scared of rougher areas and walking in city centres etc. Poverty will be hard for him.

£335,000 over say 50 years is not going to provide much additional support allowing for inflation. Allowing only a 1% drawdown ( it has to last 50 years) that’s an additional 3350 above universal credit rate per annum. The PIP in reality should cover the additional costs of disability.

Well, just like everyone you can gift your children money before you die and that will not be counted toward the IHT calculations unless within the last 7 years of your life (and there's a sliding scale so something gifted 6 years before death is taxed less than something gifted 1 year before death). So you can downsize to a property worth £350K (e.g. a larger than average house) without losing your IHT £1M limit and start gifting now. Of course it depends how big your estate is whether that is an option and as usual those who are just over the IHT limits have fewer options than those who are far over.

Speak to a IFA and start planning now. And start writing to your MP and talking to disabled charities and campaigning for a change in the law. It's surely to the governments advantage if wealthy parents can leave enough to a disabled child to pay for them for the rest of their life.

I am in this actual situation. My close family member lives in an assisted living where there are 24hr staff, his flat is self contained. Parents died young so preparations were not in place. He inherited less than 100,000, it was gone in 3 years due to rent and care costs. He is young and will live a long time.

You can’t claim housing benefit if you have over 24,000. The rent for these places is so expensive that you need the to be able to claim housing benefit. You can’t get full UC if you have over 6000. He is better off actually having just under 6000 and in his bank. I am in charge of finances and this is what I do. He can’t loses housing benefit because rent is over 800 a week paid through the LA from the benefit.

When die I will not be leaving money directly to my family member but will leave it to a trusted younger family to pay for his holidays. If you are leaving a lot of money you need to go down the route of a discretionary trust.

But farmers are not transferring one million pounds to their children when they die they are transferring a business and a home in many cases that the children have been living and working in since birth. It’s only money if they sell it, when it attract capital gains tax.
Farmers don’t have 40% of the value of their farm sat in the bank. When a farmer dies his family may have to sell their home and lively hood to pay the IHT your family will only gain.
When you die your assets are realised and turned into cash, HMRC take their pound of flesh and the rest is paid into the bank accounts of whoever you leave it to.
Your son will not have to find the money to pay IHT as the tax is paid before he recieves his inheritance.

This. Guessing you’re in UK? (I don’t understand what you’re talking about)

Anyway, if it’s a democratic country would your time be better spent trying to get support from politicians, rather than MN?

You can give regular payments (from your incone) which are not subject to the 7 year rule so you can do it until the day you die (if it’s been established as a regular payment which supports the recipient) and it wouldn’t be subject to IHT. There’s a lot you can do to plan for this. Have you taken advice?

There have been many many threads…. The 3 million is only a specific use case. Farms are asset rich, cash poor. The need to asset to live. I feel for anyone with a disabled child but this doesn’t compare. Go talk to you mp about YOUR situation instead of adding more farmer hate in a topic you don’t fully understand.

This post has got nothing whatsoever to do with the farmers issue. Manipulative claptrap.

I’m so over the ignorance! Edit as I was reffing to this baiting post, not you

Yes that concept of downsizing is part of my thinking.

However then you will loose the main residence relief which increases the allowance to 1 million for a couple to include the additional £150,000 main property relief. Also you have the cost of stamp duty. Moreover, in my city there is nothing available with more than one bedroom at £350,000 so that’s not really an option. a lock up single garage would sell for £100,000!

Also when making in vitro gifts they would have to be into the vulnerable persons trust and you have additional admin charges and also tax filing issues. You would need trustees happy to do that admin.

Howevef if you don’t divest assets quick enough there is the worry of care home fees and in home care costs etc diminishing the estate.

Sorry it’s relevant.

More tax free inheritance for farmers equals more tax on other peoples estate. IHT is expected to raise x amount seemingly or no allowances to pass on income to severely disabled children free of tax.

Years ago gifts into trust for disabled kids could have been made free of IHT and also CGT without having to live 7 years. There were far generous tax allowances but that was taken away.

It would be much cheaper for the government to allow families with severely disabled children to set up some sort of vehicle exempt of tax to ensure they are provided for rather than to pay out for care home fees for life which could be in the millions (e.g £40k per year over a 60 year life span).

You should try living on Carers Allowance £81 pw.

Perhaps I want my son to live in my home where he is familiar and in a location he knows. Perhaps that might be better for him than institutional care and moreover saves the state housing benefit. My son has lived in our current house since a baby,

Moreover you show a huge ignorance about IHT. iHT is paid before ownership passes on assets not sold. Often estates have to borrow at high interest rates to clear the IHT and then have a quick sell of assets to pay off the debt.

Farmers would not know that as they never pay IHT and never have to face the exorbitant rate of interest of the Inland Revenue. My son could be living in our home and have it sold from under him .

IHT is largely avoidable with proper tax planning. Get a good qualified accountant or tax advisor.