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.

The alternative to inheritance tax is not automatically taxing people more - weirdly enough that is always how it works in the Uk practically and how people think but by no means the only alternative. To say it’s one or another is not accurate at all. As mentioned before there are other countries such as Portugal and Canada for example where the rate of tax for working people is not higher than the Uk - but it’s actually lower. So abolishing one doesn’t mean the other has to increase. You might think it’s “unearned wealth” but that only applies to property whilst the inheritance tax applies to everything cash included. So according to your argument the tax should only work on the “extra” that the house is worth now versus how much they paid for it. And not on cash left - but it doesn’t. So that part of inheritance is in fact taxed twice. You also talk about the advantage that the “baby boomers” had regarding buying house - which I agree - but the tax doesn’t affect them it affects the next generation that already have is much tougher: so the windfall of the property would either benefit the next generation and address that imbalance. So not sure how the inheritance tax addresses that unfairness. I agree that services need to be paid for but not this way they need to do an overhaul of the benefit system, they need to think on passing some of the cost to the people that use the services. There are another areas that can be tweaked. Whilst I think the NHS is amazing the reality is it can not go on as is we have an ageing population and 20 million more people than there was had when it was created. Continuing to increase taxes for people isn’t going to cut it and it’s not a long term solution.

So what would be in your budget?

The alternative to inheritance tax is not automatically taxing people more - weirdly enough that is always how it works in the Uk

I stopped reading there 🙄

Not surprised - 🤣 I’m going to take a wild guess and say you’ve never lived outside the Uk so obviously can’t possibly imagine how. Other countries do it and have a lower rate of tax. Look it up

It doesn’t take a mathematician to realise that when you remove one revenue source it will leave a deficit. That deficit has to come from somewhere. It won’t be unicorn poo balancing the books.

Income tax is at the highest it has ever been since the 1970s when people were leaving the country on their droves.

Capital gains tax is higher than since the 1970s as there is no allowance made for inflation or indexation relief.

Inheritance tax was bringing in virtually nothing and not is what about several billion due to fiscal drag on £350,000 being unaltered. People are selling off their parents main home to pay it ( or using really expensive all life insurance that you are forced to pay until death to lose all the premiums so end up wishing to die earlier).

For higher tax payers they are paying more than on places like France and getting poorer services eg health care and pensions ( which are linked to earnings in France and also are on household income not individual).

We are going under unless we get productivity up.

Frankly they need to get people back working eg like me and I’m happy to do that but ironically it will cost the state more for DS social care. There is no net gain.

So what can be done? So when the farmers protest who do they want to take away from. And yes even the cost of sheltered accommodation has increased above the rise in benefits which are linked to CPI not RPI index whereas pensions are shielded due to triple lock. So even the disabled are worse off. So who has to pay?

Kindly show me where I said that we should abolish inheritance tax and leave it at that. I don’t think I did so. I even pointed to other countries that have and managed to make it work. Can’t comment on unicorn poo on what it can or can’t do as I’m unfamiliar.

We have left the uk for this reason. Had enough. And we have quite a few friends who are either doing the same or considering it. A couple friends of ours are going to America in February next year (they lived there before came back to the uk as they missed their family) but they are worse off. We have some friends in Dubai since April, Canada in January and Australia in May. As I said I don’t have all the answers but we do agree that something has to change. That there are better ways. I also think that the keep calm and carry on mentality whilst is really something to admire in emergency situations isn’t always the best when change is required

Just because you don't agree doesn't mean it's not right. I would like to see a smaller state with copay e.g you have a child in school add 2% to your tax bracket per child, income protection being the normal not benefits, on benefits get out and clean the streets (we litter pick our village the council doesn't).

You said abolishing one tax doesn’t lead to more tax in another area - but the fact remains that will equal a deficit which will need to be recovered elsewhere.

I think you'd need to leave it in a "trust" for him. - speak to a financial planner/solicitor x

No I said that abolishing inheritance tax doesn’t automatically lead to income tax being increased - that’s a choice the government would make. There are others. Such as an overhaul of the NHS and the benefit system - in my opinion neither should go on as they are as it’s not sustainable

I like this idea. So sort of you pay for what you have in a way. I think that makes sense. It’s fair as you take responsibility for your own.

I think you need speak to someone qualified to advise you on the best way to set up your son's inheritance, eg to put the money in trust for him as that won't count as 'his savings', meaning he'll be entitled to full benefits and thus will have the best of both worlds - full government support plus a trust fund he can use for extras - care or holidays or whatever he needs.

Yes so he has to access drips and no more than say £4000 at a time etc

@Noras The estimated income from the inheritance tax change is approximately 500million per year

We are currently giving over 535million to develop agriculture in other countries. The largest amount going to Brazil which is the 11th largest economy in the world.

So on the one hand out government is destroying British agriculture whist giving handouts to foreign agriculture.

So NONE of the income from this policy change is going into the Uk economy!!!

Which proves how few farms will be affected. It’s going to tax the megafarms or very large farms with turnover in excess of £250,000 to unlimited.

"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."

I think there's a way of carrying forward/protecting main residence relief if you downsize - from a radio piece I heard a week or so ago.
If your so concerned about not paying IHT on your millions, pay for a financial advisor.

So below is from the times highlighting the affect on a medium sized family sized farm that will likely be forced to shut down. Income average is £123,000 - although some years much lower - which is wages for 3 people and what is required for reinvestment in the farm.

hardly a mega farm…

@Noras it really doesn't! If anything it proves the exact opposite!
If for every million pounds over threshold it's £200k in tax.
So for easy numbers to 'only' have 500 farms affected that would mean that the average value of those farms was at least 8 million.

There is a heck of a lot of farms which would be valued between 3 and 8 million! I'd go as far as to say that the majority of farms would fall into that bracket.

So no not small numbers at all!

• majority of small farms

That also assumes you actually get the value of the crop in the ground too.

What you get for your harvest isn't determined until it's harvested and back dry in the shed.

You have a bad harvest and suddenly you have a huge cash flow issue to buy new seed. Tractor repairs can cost tens of thousands of pounds.