discretionary trust

[Watersk]

I will be leaving my house to my son who is autistic and has a learning disability. If it is left in a trust will he have to pay inheritance tax?

[SpeedyH]

If you are leaving it in a trust, the trustees will be the owners not your son so he won't be liable. However, trust tax is complicated and you will need official financial advice on this. If you leave it in a discretionary trust and the trustees rent it to your son, he might be able to claim housing benefit/element to pay the rent which could be put towards maintenance. I recommend you get professional advice

[Nick_b4]

It depends on the value of your house and whole estate. If you are doing this in your will, (upon your passing) From what I understand, as we are in the same position..

If you leave a house to a 'normal' discretionary trust then your estate won't benefit from the nil rate residence band, currently 175k. So you would pay iht on your estates total value over 325k.

If you left your house to a disabled person's trust which can be a type of discretionary trust then you would benefit from the nil rate band on the property so should be able to pass on 500k without any inheritance tax.

Best talk to a solicitor.

[Nick_b4 in reply to Nick_b4]

I'd add.Upon his passing if the house is in a discretionary trust then it wouldn't be counted as his asset for iht.

If it was in a disabled person's discretionary trust then it would be considered part of his estate for iht.

But yes best talk to a solicitor with knowledge of different types of trusts.

[Mencap-Wills-Trusts Expert]

Good morning Watersk

We do not discuss IHT in a lot of detail as it can become very complex, and usually it's a detailed conversation that needs to happen between you and your solicitor. Generally, as the trustees will technically own the property, because they manage everything in the trust, they would be the ones liable for IHT.

Thanks.