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 agree, so we need to find better ways of ensuring that the ultra-rich contribute their fair share, both through inheritance tax but also through other taxes while they are alive. That doesn't let the rest of us off the hook though. We should each contribute according to our means.

There's a difference between using widely available and known about provisions to encourage people to build up relatively modest amounts of savings and to save for their own retirement and anything where you need specialist advice to learn about it, set it up and run it and are not using it for intended purposes, eg buying farms to avoid IHT rather than primarily for the business of farming. Or in this case so that the money is disregarded when being assessed for income related benefits.

Ah, so some tax avoidance is OK and some is not. Thought so! I really don’t see any difference between a parent saving into a trust for a disabled child to ensure that they have a secure future and someone saving into a pension so they have a secure retirement.

The difference is that the pension is taxed on the way out and its recipient isn’t entitled to benefits - other than the state pension to which they’ve also contributed.

What rubbish - you take advantage of your personal allowance - you don’t say oh I don’t want that. You also have saved in tax by paying into a pension.

Frankly the whole point of vulnerable trusts is to help severely disabled people. I suggest that you go and mix with them and speak to then.

At present there are some in absolute despair on supported living thinking that their lives are not worth living.

Yes I will use any legitimate and government accepted way to support my son like any normal parent - it’s what it is there for.

As my son was under suicide watch (indeed more recently he was sent home from life skills because he wanted to die) I will do anything for him and frankly having to hear him say he wishes he was dead and what is the point of his life as he’s rubbish is a bit heart breaking.

The purpose of a vulnerable trust is to allow a severely disabled person to have some money not taken by universal credit and social care.

What other purpose is there.

Also because the person can’t actually handle money and has lot and lots of expenses more than most people eg needs trustees etc.

The purpose of farm land relief was to support farmers not tv personalities. I use what the Government explicitly allow.

For what it’s worth also if you have an accident and someone pays you compensation that is also shielded from a universal credit and social care claw back. Eg compensation for an RTA.

There are numerous exceptions to a universal credit claw back: In fact there are pages of them.

I start work in 2 weeks time after 21 years. It can be done. My son now has social care so I have more freedom.

There are numerous exceptions to a universal credit claw back: In fact there are pages of them.

That doesn’t make it right. Maybe if we didn’t have those we wouldn’t have 30% of children in the UK living in poverty.

Clearly I’m not ignoring everyone
But LOTS of PP have said "get financial advice" and you haven't acknowledged that. So you are ignoring us!

You haven't mentioned whole of life insurance, which is not "escaping" IHT but ensuring that there are funds to pay it without cashing in the estate. You only seem to be interested in sneering at and talking down to people who are trying to be helpful; if you think you know better than everyone, then you may as well have not posted.

Well assuming that severely disabled people are otherwise only on pip and universal credit it lifts a few marginally above poverty.

On your argument all severely disabled people should remain in poverty.

I have a choice to leave money to my non disabled kids or to leave some into a vulnerable persons trust. Either way my son will get universal credit and pip. He has significant needs. He will just have to rely on his siblings to help him out from time to time.

For a farmer a large amount of the value is tied up in farm equipment, stock and farm buildings which are essential to run the farm. If you have to pay IHT on all of that the farm becomes unviable and will likely have to be sold probably to investors not farmers and then it will become unproductive. Goodbye to locally grown crops and locally reared meat..

On your argument all severely disabled people should remain in poverty.

I didn’t say anything of the kind and there’s no logic to that conclusion. What I am saying is that nobody in possession of or with access to a six figure sum should be eligible for state benefits. And nothing you say will change my mind.

Agreed.

There is absolutely no way that anyone should be claiming means tested benefits, when they have funds to support themselves available. Disabled or otherwise.

Spend the money available first, then claim benefits if/when needed.

It sounds to me like OP’s complaint is that she’s not quite rich enough, which I’m sure is a real hardship.

No one should be bickering about how much IHT people should be paying. Instead, everyone should be getting together to campaign to scrap it all together because it's nothing short of robbery by the government. I'll never be subject to it unless I win the lottery, but I feel for those that will.

I’m happy for my estate to be liable for it. A share of a tax free windfall of £500k or a million should be enough for anyone.

💐 horrible isn't it

Your post is tone deaf. I have a disabled stepdaughter who lives with us. We are comfortable but at present very unlikely pay IHT. She will inherit our house and a bit of money.

Yes she will have a lower standard living, but she won't have to pay rent or a mortgage and her trust will be managed by a relative from each side of the family.

She will be fine. And she won't be on any more benefits than she currently gets.

You are conflating a reduced living standard to being on benefits which is not the same. Maybe he'll have to share a pool with others, or go on holiday to a less luxurious resort.

It's called life.

Be grateful that your son has been able to enjoy such things and isn't in a position of poverty and never will be. Plenty of disabled kids will end up being warehoused in care homes. Thank goodness mine and yours won't be because we have assets.

Seriously why should you pay less tax just because your kid is disabled? Your kid is not a reason to excuse your contribution to the rest of society.

I don’t have anything useful to add but I just felt sad reading some of these posts. I hope that you manage to speak to a financial advisor who can come up with an amazing plan for you and you come away feeling a whole load better. I’m a disabled adult, but a pretty independent one. And I thank God for that. Or there would go, I - and people have very little compassion sometimes.
Sending you a hug. Though it may be useless… and a wish for some wonderful advice. Sorry it wasn’t from me. Take care xx

You need specialist advice from a lawyer with expertise in this area + around social services means testing which can be more complicated to plan for than IHT.

Possible options:

• Leave nothing to your disabled child - leave their share outright to someone you trust to use it for them.
• Disabled Person's Trust (relies on ongoing receipt of PIP so riskier than in the past)
• Lifetime gifts - a house / flat if he can live alone with visiting support. (A property you're living in is normally excluded as an asset for means testing)
• Other chunky gifts that can make sense because they can't be taken away would be things like lifetime membership of places / organisations he's interested in - the National Trust is an obvious one if he's into places like that but there may well be others more suited to his interests.
• Plan to avoid social services involvement (not in a refusal to deal with them way) in order to avoid their means testing - how independent can he be? Can he manage with support from family / friends/ privately funded personal assistants? There's a level of disability where this isn't viable but if it is it's worth looking at, for greater control over any paid staff.

Lots of posters have no empathy and not a fucking clue how hard it is to have a severely disabled child.

I have one myself and I will be leaving the money in a vulnerable trust or leave it to my other child who is NT to help her brother out personally.

He will be getting everything he’s entitled too without everything I leave him being taken into account.

He can’t change being disabled and fuck anyone that thinks he should live below the breadline because he can’t work.

Do I think the money raised by removing the exemption for farmers should be used to fund yet another exemption? Absolutely not.
My heart goes out to you OP, it sounds like a crappy situation, but you paying less tax at the end isn't the solution, it just creates another inequality. What about those who die with dependents under 18? Or caring for elderly relatives? Should they be exempt?

I think what needs to be taken into consideration without being morbid is when you and your husband are likely to pass away. I seriously doubt if you pass at 80 for example your son is 30 - this needing to live on this for 50 years.

i don’t know exactly but let’s say you both pass by 80 and had your son at 30, it would then be 25-30 years for your son.

i think you need to see a financial advisor, consider how you can will (which you can at least 7 years before you pass) your son money before and speak to your adult children about how they can support and help.

Comparing to farmers was wrong and gets no sympathy from me. You also don’t know the full facts of the farming situation as you have omitted they will also have to pay capital gains tax taking them to the 40% threshold. I’m not a farmer but this isn’t about farmers it about those who invest in land to avoid paying tax. And while we are here, Dyson bought £450 million in land BUT invested £150millon and his profits on that land are about £5 million or less than 1%.

its very difficult for you to consider but I wouldn’t blame another group and feel that your fears can be allayed by good financial planning and support.

Taxation is essential for us to have health, defense, social services, education etc, etc, etc. Someone (or should I say nearly everyone) has to pay tax and better it be taken from unearned wealth than the average earner struggling to manage. Of course there has to be IHT and I’d prefer more people to have to pay it. This is diverging from the disability post I know. I understand Mencap give advice regarding financial planning for the disabled.

Just scrap inheritance tax, it’s a greedy unwarranted demand from the state who have already taxed hard earned income at 20-40 percent and discourages self reliance. Perhaps the lazy and feckless should have their benefits stopped and be encouraged to get a job. Rant over , but every thing we do is taxed excessively and still the government want more to piss up the wall

How does it discourage self reliance when not one living person has ever paid it?