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.

Very sensible posts.

I am truly staggered at the lack of human fucking empathy on this thread. Staggered.

Farms are asset rich, cash poor. The need to asset to live.

Disabled* *children, who will hopefully turn into adults, need the means to live too.

The farming is a separate issue and obv needs addressing, the OP will probably regret referencing them as there is a lot of emotion attached to this topic, which many ppl quite rightly feel strongly about.

But just take the farming element out of her post for a moment.

This lady has come on here to ask advice for her extremely sensitive situation and apart from a couple of posts from ppl in similar circumstances, or with close family members in similar circumstances. the level of hostility and condescension on here is unreal. I had to stop reading them bc it was just upsetting and awful.

These posters lack any scrap of understanding or sympathy for what this OP’s life is like (probably bc they’ve written her off as rich - so zero sympathy deserved in any circumstance) and are making light of the fact she is concerned - things like ‘with this figure in the bank, why are you worried?’ ‘Ppl who claim benefits can’t expect nicer things’, etc. and there are many more.

I’m disgusted. This isn’t a woman trying to fuck the system, she is looking for support. The vast number of these posters don’t have children with disabilities. Their outlook is unfortunately common in our society. Why should you be given special treatment? Fundamentally it boils down to: Me and my children aren’t getting any benefits, why are you getting money or expecting what we’re not?

This isn’t a dig at the poster I’m quoting particularly as she had the grace to tack on that she feels for the parent of any disabled child. The thing is that’s lip service isn’t it. To say you don’t would make you scum. You can’t say you dislike ppl with disabilities - especially children. Thats not nice is it. And worse, other nice, normal ppl wouldn’t think you were very nice. I have encountered so many ppl that are the stereotypical cliche of nice, middle-class, church-going, environmental-campaigning nice ppl. When they’re not really very nice at all regarding this topic. But it’s not a class thing as hard-working salt of the earths can also resent ppl claiming benefits for ‘so-called’ disabilities when they have to go out to work long hours themsleves and aren’t living in the lap of luxury, neither are their kids. It seems to be centred on money. Perhaps survival. I resent you for having what we don’t - hate the rich, hate ppl on benefits, even if you do technically deserve it bc your life is challenging in ways mine isn’t and never will be (but I don’t like to/ can’t be bothered to think about that aspect). And I still resent you, as at the end of the day why should your child get it and not mine?

My rant is over, I’ll no doubt get shit for it, I don’t care. Before you angrily click away at me put yourselves in this lady’s shoes for 60 seconds imagining what she has, is and will be going through. I’m not talking about the daily slog of parenting with a lazy-arsed husband, being a single parent or anything like that, I’m talking about being the mother of a child who struggles daily and probably will for the rest of their life. The emotional impact of this alone is unimaginable to ppl who aren’t in this situation. You will never understand but try to.

My heart breaks for you OP, and everyone else in similar situations. I wish you and your families all the luck and good will in the world and I hope you get all the support you need and deserve to ensure your children are looked after and are happy 💐

Depending on having a trusted family member perhaps siblings? You could give money to them on understanding they pay for the nicer things etc. tbh everything will be burned through by care costs in just a few years otherwise. You could transfer early and it’d be exempt for IHT inn7 years.

Not without risk if they die it’d be part of thier estate, or made bankrupt or be greedy.

It’s so much more complicated than that - it affects who can live there and how you can draw profit. As farmers are saying, their best option for their children in many cases is to die before April.

It is two years before this becomes law and I have been advised that Labour have a great deal of work to do to make this viable. In the meantime financial bods and tax lawyers will be working on workarounds so there will be plenty of advice on this.

Yes, take specific advice from an experienced financial planner.
For example. It could be a scheme that you have not thought of .. brain storming ...Could you gift your son the minimum in his own name that doesn't affect his receiving of benefits and leave the rest of your estate in a farm owned by your other children.
Have the farming children spend some profits to gift special treats and extras to their brother.

Haven't read the whole thread, but OP, did no-one ever advise you about life insurance written into trust? A whole of life policy generates a sum which - if written into trust - sits outside the estate, and is therefore not liable for IHT. This sum is then available to pay any IHT liability.

I don't know how much it would cost you to set this up now, but it might be worth investigating. DH and I did this, because (London prices) we had two properties which took us over the limit, and didn't want to leave children in a situation, when financially vulnerable, where they would have to sell fast to meet a tax bill.

It seems a neat solution: HMRC gets revenue, children get to keep the estate without having to flog it off at fire-sale prices to meet a bill. DH and I don't want to avoid tax - we're pro-tax, 'cos we like schools and roads and hospitals and defence and stuff! - but we want to be able to plan it over a lifetime and not have it land out of the sky on our beneficiaries after we're gone.

The policy was something like £12 a month when we took it out, it's now £28 a month. It ratchets up each year, as does the sum it generates.

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.

We believe that sooner or later NHS CHC funding will be abolished by the Tories or Labour (= Tory Lite), because they want to privatise the NHS. No private provider(s) will want to take on the open cheque that is NHS CHC funding. The government would see putting all those people, funded by NHS CHC funding back onto Local Authorities to fund, as a stream lining of two parallel systems anyway.

Local authorities have realised supported living saves them money, because the service users bears the accommodation costs (funded by benefits or rather central government) instead of the Local Authority. My Local Authority is pursuing that policy - they are not commissioning any new care homes, and are moving service users from care homes, especially the out of county ones into supported living in county.

Nobody can be complacent that a disabled DC of working age in a care home, will be able to live there for the rest of their life, especially after the parents have died - who would be there to fight the Local Authority on this; and would they have the time and energy?

We also believe care homes will close, with the budget changes to NMW and NI employers. Maybe not this year, but further down the line, when their reserves have been drained, from having to spend say an extra £1,000,000 Pa, which is unfunded. I can’t see how Local Authorities or NHS CHC funding would be able to fully fund the increase in fees, when the social care uplift is £600 million for everybody and this measure alone will cost £800 million?

I imagine most people have seen disabled people on the news, saying they can’t afford to pay for the electricity for vital equipment or they have to choose between food and heating in the winter? PIP does not cover all the increased costs, associated with disability, so the disabled as a group, are even more impoverished than the “average” person on benefits?

Why do some posters consider they are so hard done to, and OP is wrong to want to lift her DC out of dire poverty, and him have enough money to get out and do the activities, everyone else takes for granted? PP may be married, have a job, have children, have a home (whether it’s owned or rented), can go out the house whenever they want - go shopping, see family and friends, have a drink….Yet they are jealous of disabled people, who will never have that?

My disabled DD would like nothing more than to have a normal life - a boyfriend, a job, children and her own home; and she cries to me regularly that she’ll never have any of it. Her idea of the finer things in life, at the moment is to go for a KFC!

Unless you die at 35, he's unlikely to outlive you by 50 years.
As pp said, benefits are not there to provide the 'nicer things' in life; they are for essentials.

OP have a look at this. It's best set up via a knowledgeable financial advisor.

https://octopusinvestments.com/our-products/business-relief/octopus-inheritance-tax-service/

I would normally think this was unethical as it is essentially a tax get-out. But in your situation I think it is fair enough.

I have great sympathy for her situation but she actually didn’t come to ask for advice. As she has said she has taken professional advice on wills and financial planning.

Getting rid of family farms, which is what IHT on farmland will cause in a couple of generations will mean the productive countryside will be ALL mega farms, most likely owned by overseas investors and the mega rich. Carbon tax and green washing industrial pollution tree planting schemes.
Food will rocket in price.
The Farmhouses and 20 acres will be bought by the wealthy as holiday homes.
Food security is a massive concern in these turbulent times.

I understand your desire to leave your kids your assets though OP - we have an only child for that reason, that I know if we die they will be okay financially. I don’t believe anyone should pay inheritance tax.

It is relevant. I agree.

It is relevant because it it more important to feed the nation than it is for your son to live in the comfort he has become accustomed to. There are many disabled children living in residential care that have nothing at all. They manage just fine.

I don’t agree with inheritance tax full stop. It penalises those that have worked hard to pass something on to their children. However in a choice between taxing you and a farmer it will be you I’m afraid.

OP we have the same dilemma and I agree - do get some advice though as if you leave him a cash sum it might impact his entitlement to benefits and would be an administrative nightmare if that was the case and you weren’t around to sort it.

My adult cousin has autism, his meltdowns alone mean he will never be able work, or advocate for himself. His parents worry constantly about his future. People who don't know anyone in this situation perhaps don't understand the stress it causes, or see the toll it takes on the parents. However, the main issue here is that disabled adults shouldn't have to rely on an inheritance to have their needs met.

Where do you think IHT goes? You’ve advised your son will need care and benefits for the rest of his life. The taxpayer will pay for this (rightly). It’s great tax can pay for this.

I’m sorry for the situation your son is in, but it’s not at all comparable to farming. The farm inheritance is a business - they are taxing the inheritance of fields and barns, not of £3 million cash. It’s more akin to taxing the clothes he’s wearing than the cash in your bank.

You need to talk to a financial advisor asap and see if you can get a trust set up for your son. I know the tax is painful, but if you’re in the position to leave him £1million then he is significantly better off than many people in his situation.

My DH’s disabled DC can’t get himself dressed or wipe his own arse. He has absolutely zero prospects of ever being employed - he can’t even be in the house unattended let alone have meaningful employment.

I appreciate the difficultly OP.

Everything that @Sceptical123 wrote above.

Appalling insensitivity on this thread. How dare the OP have a bit of money AND a disabled child?

My disabled DS will never work either. DH and I are trying to provide him with a small buy-to-let business so that he can have an income and some independence. State provision for his disability has been woeful, so we fear him being dependent on it. The OP is absolutely reasonable.

Sorry OP I have read your subsequent posts and realise you are pretty well versed on the topic of trusts.

I can see that you are in a very difficult situation. A relative of mine is in a similar one as regards finding care for a disabled child after they die. I have no idea about their financial situation.
I know nothing about the law but think you should take legal advice, specifically from a law firm who understands the law surrounding disabilities and making provision in this specific case. I assume that these exist.
Good luck.

@WeWillGetThereInTheEnd

What will happen to the DC who are completely incapable of caring for themselves? Are you saying the threshold will just change as they can’t close ALL care homes, surely?

Could you buy your son a home just now so he is familiar with it ? Then when your no longer here he can inherit as much as is allowed to live off along with pip . I appreciate its not the lifestyle hes maybe used to but it might be a bit better than living on just pip / universal credit alone when the money runs out ? Im sure a financial advisor can help .
However i agree with you , ultimately what you want to do is leave provision for your son's care which means he isn't having to rely on benefits ( which in turn benefits the state ?)
However i also think that no disabled person should have to live in poverty ,as a society we should ensure benefits are enough to have a nice life as their circumstances are not their fault .

I agree with that, I have known people who have done something like that to protect a disabled child.

Op, don't feel upset about the farmers, making comparisons does not help. Quetion Time was very good last night, this being a major topic of discussion. Many farmers are asset rich and cash poor.

Stop having a go at farmers, many smaller farms will be caught up in this and worrying about it. You don’t understand it. The money in smaller farms is in land, buildings, machinery which are all needed to farm. I hope you can get some specialist tax advice to help your situation.