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.

If their children are also farmers why don't they transfer some of the business to them before they die? As long as they live more than seven years after this no inheritance tax will be due on that.

@Noras then you are not in a position to significantly enhance your son's lifestyle above and beyond benefits.

If you haven't pension planned well, then you need to forget keeping your family house in the longer term and liquidate some assets.

How much professional advice have you actually taken?

True. My mum owns a small bungalow outright and her income isn't large but she is not in poverty. She's not disabled, and doesn't need care, though. Care is expensive.

Also the problem with flats is service charges. Lets hope that the government actually sorts out the problem of leasehold, they announced something yesterday.

Focus on this thoughtful answer and get some financial advice.

Everyone thinks they are worthy of avoiding a tax that is trying to be fair. A lot of people in this country live in relative poverty even people who work. Your son will have had a lot of money out of the ‘ state system’ over the years even if you have supplemented it.

But surely the state will be paying for your son if you're not funding him beyond 18 and want him to have benefits rather than family money?

I may have missed the point then, but why do you want the state to fund him and him to inherit tax free? It sounds like you're very wealthy so maybe I've misunderstood, I didn't think the very wealthy needed benefits.

With respect OP you have come here with a very complex situation few people would have experience of. This is definitely one for professional advice rather than random opinions from strangers around the globe.

Seek financial advice particular to your case.
You should adjust your affairs to minimise tax for your son.
Could you buy a small farm?

Your disabled son, along with the rest of Britain will be better off eating locally grown, nutrient rich food grown with uncontaminated water. He will benefit with many rolling acres left for farming and sustainable habitats for native creatures. He will breathe fresher air. Being able to grow the nation's food is important.

is he owned a house he would have to pay social care or it would be charged against the house.

£300,000 would not buy anything in our city.

This. I won’t be able to leave my disabled adult child anything because I don’t have a penny, I’ve spent most my adult life caring for her alone and not being able to work. She’s never been abroad or had extravagant things so I guess she knows no different? 🙄. She will need care for the rest of her life and will need a residential placement soon, she’s disabled so her life’s never going to be brilliant or extravagant, she will claim benefits for the rest of her life and live on the bare minimum but she won’t go without and has never really gone without…she just doesn’t have extravagant things, but neither does a large percentage of society.

Don't fall into the government's trap of trying to pit one group against each other. IHT is an insidious tax regardless of who it's levied on. They want you to vilify the farmers (who incidentally are critical to our infrastructure) so that you don't stop and think too hard about why the government is stopping you from passing on your post tax income to your own family once you die...

Thanks for the facetious message.

You paint an idyllic picture!

I counter with mega farms, sewage run off, mass pig farming, factory chicken production and not forgetting slave seasonal worker labour and abuse.

Farmers are not all saints lovingly talking to their animals in rolling hills and free air - you have obviously not lived near a pig farm.

£500k in a stocks and shares ISA, will be worth 950k after just 10 years, with modest returns.

Start putting £9k per year into all junior ISA for each child now. It limits the IHT & will grow significantly for them.

I assume the OP isn't aware that most parents of disabled children have nowhere near that amount to potentially leave their children? And some have nothing at all.

Yes. These farmers are really getting on my nerves. Always wanting more and to be treated as a special case. Well they're not.

I think if a disabled “child” is living in the parent’s house when the parents die, the “child” can stay on living in that house.

And millions of people in this country are living in poverty, especially people with disabilities, through no fault of their own.

This is excellent advice. OP, see a financial advisor. And connecting farming to your situation is a non sequitur.

You can give away money you might need if you can have complete trust in your children.

You could, say, put 20k per year per child from now in an ISA in their name. And you could say to them that although it’s in their name and the objective is for them to inherit it when you die, that you would like them not to touch it until then, because it could be needed for your retirement/old age.

I do very much sympathise with your situation, however yabu to compare it to farmers and consider it unfair. You have justified the farmer situation by saying that “most won’t be affected”. Labour justify most of their tax raids in this way. Private school VAT is justified as “most won’t be affected”. I could say that the IHT on your assets and the deprivation of inheritance for your vulnerable child also could be described as “most people won’t be affected”. That’s the trouble with the “most won’t be affected” - everyone thinks it’s ok/nobody cares until they find themselves in the affected minority. I haven’t found myself in an affected minority yet - but I do still think that the policies re farmers are very dangerously wrong for our country. I mean how would it go if I said that racism against black people is not worth tackling because only 4% of our population is black and so “most aren’t affected”. It’s an absolutely terrible justification.

People are naive to think that farmers are loaded and can shell out for IHT. I have to say that if I was a farmer with a £5m farm that I just inherited, I would quit farming, sell the farm to property developers or something like that, pay the IHT and go and live a nice life in Monaco - leaving the UK and it’s food insecurity.

@Noras Is there any way you can give him as much as support as possible and find ways he can understand so he can live independently one day.
there was an autistic child who learned to speak by pointing at letters

OP YANBU to worry about your Ds in the long term, and from what I understand from friends in a similar position it is the workings of the benefits system that makes it hard.

It is such a worry, not being able to feel secure about the future of our children who will not be able to secure their own futures.

YABU to conflate farmers and children with disabilities. All sectors of the community have different challenges and need different solutions.

YABU also to expect nuanced empathetic replies in AIBU. In MN at the moment, because everyone being squeezed, is full of people carping on about what someone else gets or wants. Whether it be a refusal to understand that not all pensioners are wealthy and running a household alone on basic state pension is very hard, to being snarky about the amount you will be able to leave your children compared to them, to people not understanding the economics of farming. Under pressure everyone turns against others under pressure.

There will be people on the SEN boards who understand your issues and will have taken financial planning steps.

I've also thought this about young dependent children who are orphaned. They haven't yet had the benefit of their parents paying for their home, education, food, clothes, toys, holidays etc so should be able to inherit more tax free than a 50 year old from their 80 year old parents. There is also the argument that they will need more in care, such as nannies, or counselling, than the average child. I believe some countries, like Spain, decide the inheritance tax based on the needs of the recipient rather than a blanket rule for those who have died...and it makes a lot more sense to me.

What is your point?

It’s not by choice that he is disabled?

People who are very low paid get UC but at lease have some agency re their lives outcomes.

I feel strongly about this and if I did not have my disabled son I would have ‘fostered’ an older teen. It’s all heartbreaking.

Don't waste your time posting on MN. You need a good IFA/accountant/lawyer.