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.

Removing a tax only lowers tax income in one sense.
What its does in the long term is increase wealth and encourages wealthier people to stay or even move to your country.
Guernsey has a one off income tax of 20% for everyone with a £13k allowance.

There is no increase for those who earn more thus people do not find themselves on the margins of a higher tax rate and worse off.

They also have no capital gains tax and no inheritance tax.

Sorry I haven't read the thread so sorry if this has been covered already, but you need to set up a trust for his inheritance. He can then ask the trustees for money for eg a holiday. But he mustn't inherit directly or it will affect his benefits, and he will have to self fund until the money runs out. Contact Mencap for a copy of their wills and trusts pack.

Thank you and I have done that. I remain worried as I suspect that the criteria for the trust will be amended as will pip etc so I’m going to have to keep monitoring the situation as I get older.

I wish that o could just give it all to a sibling of his bit then it puts a lot of faith not only in them but all’s their spouses etc.

Guernsey does not have the same outgoings as the UK eg in defence or social care spending and no NHS

I don’t see how that’s relevant to my post highlighting the long term effects of removing certain taxes.

Well it is relevant, as it’s a different system, one to encourage the wealthy to reside there, thereby increasing the tax burden on each resident and making more revenue amongst a lower population.

The UK has less wealth spread between more people and has difference services to fund (health and social care not least). So it’s a comparison of apples and oranges. The two taxation policies have different goals.

The point is
If a country makes itself more desirable for the wealthy to reside in then they stay, pay more in taxes ( as high earners don’t receive benefits ) and overall benefit the system. Thus there is more in the pot to support lower earners and infrastructure.

But the residents of Guernsey are not supported in the same way. So the lower earners are hit harder. I understand your point but Guernsey is not a good example.

They are supported with a very similar benefits system to the UK and since 2003 a health insurance system too.
The support actually far exceeds the UK with all elderly care funded through their health system, no one has to sell their home to pay that.
The difference is it’s a wealthier country overall because wealthier people live and pay their taxes there. In some cases because wealth has been passed on, grown and people are encouraged through an equal tax system to climb the ladder without losing out once you pass a certain tax bracket.

I have a daughter with a mld so I do understand. I wouldn't worry too much about the future. You can't control it. You might have to go into a home and sell up and there might be nothing to leave anyway. My daughter doesn't particularly need money anyway. Her sister, who needs to buy a place with her boyfriend in sw London, does!