Gifting assets wrt old people going into care homes
09 February 2007, 07:05 PM
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Gifting assets wrt old people going into care homes
We have an elderly relative who is going to have to face going into care at some point in the future.
Now in term of Inheritance tax there is no issue as the entirety of her estate is well within all limits. Being the naive, but sweet old lady that she is, she thought that this meant that there would be no problem.
Wrong, as she has capital, the moment she goes into a home, she will have to pay £450 PER WEEK for her care. These payments will continue till she has no savings, and then they will make her sell her house. The payments will continue until she has almost no savings left at all.
Now this lady has worked the whole of her life, and would like to be able to gift her property to a loved one. How much of the property can she gift, and how long does she have to wait after gifting it before going into care?
I have heard rumours that the gift must be made 7 years before going into care. I have also heard rumours that if she gifts the entirety of the house to someone, but continues to live there without paying rent, then the gift is classified as being null and void.
So much for having an IHT allowance, at this rate there will be nothing left by the time she gets there
Now in term of Inheritance tax there is no issue as the entirety of her estate is well within all limits. Being the naive, but sweet old lady that she is, she thought that this meant that there would be no problem.
Wrong, as she has capital, the moment she goes into a home, she will have to pay £450 PER WEEK for her care. These payments will continue till she has no savings, and then they will make her sell her house. The payments will continue until she has almost no savings left at all.
Now this lady has worked the whole of her life, and would like to be able to gift her property to a loved one. How much of the property can she gift, and how long does she have to wait after gifting it before going into care?
I have heard rumours that the gift must be made 7 years before going into care. I have also heard rumours that if she gifts the entirety of the house to someone, but continues to live there without paying rent, then the gift is classified as being null and void.
So much for having an IHT allowance, at this rate there will be nothing left by the time she gets there
09 February 2007, 07:12 PM
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The system stinks. But listen to all the posters who say speak to an IFA who works in this field.
The Age Concern website also has some excellent advice in areas like this and they know what they are talking about. dl
The Age Concern website also has some excellent advice in areas like this and they know what they are talking about. dl
09 February 2007, 07:20 PM
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09 February 2007, 07:20 PM
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There are also other options to investigate. My dear old mum bought a lifetime care plan which cost £60k but guaranteed decent care (circa £3000 per month ) for life. But she had to sell her house but it left her some cash. Obviously depends on age and health. But please be careful who you talk to - even IFAs.
) for life. But she had to sell her house but it left her some cash. Obviously depends on age and health. But please be careful who you talk to - even IFAs.
09 February 2007, 07:24 PM
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Yes, its a minefield of ideas out there 
Not been able to find anything about the rules of gifting assets on Age Concern site just yet....
(and whats wrong with £3k per month, that's quite a bit surely?)
Not been able to find anything about the rules of gifting assets on Age Concern site just yet....
(and whats wrong with £3k per month, that's quite a bit surely?)
Last edited by Luminous; 09 February 2007 at 07:26 PM.
09 February 2007, 07:29 PM
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)Transfer of assets and paying for care in a care home - FS40
I was just wincing at the cost of care generally. d
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09 February 2007, 09:32 PM
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it is true and being managment within a care home ... i can safely say the lady will have to pay for her care... BUT once her home is sold and she gets down to 20k she will get the majority of her fee's paid for her by the goverment....and the 20k can just sit in her bank account .. she will then also get money each week ( pocket money ) i think its around 18.00 a week ...
unfortunatly we have the goverment to blame for this sh*t which i must say makes me sick to think they work all their lifes and save for them to have to sell their property to pay to be cared for ...
unfortunatly we have the goverment to blame for this sh*t which i must say makes me sick to think they work all their lifes and save for them to have to sell their property to pay to be cared for ...
09 February 2007, 11:20 PM
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having a look around it does appear that there are a few measures that can be taken, but its one of those things where you need to act in advance
Let's hope we've not left it too late
Let's hope we've not left it too late
10 February 2007, 01:36 AM
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Luminous - The 7 year stuff and gift with reservation only apply to IHT. She should sell her house to you/loved one at the going rate and then gift all her savings away. This wont escape IHT liability for 7 years, but the care trusts will basically give her a 2 page form to fill out asking where the money went. If she says that she paid 20k for her unemployed nephews wedding, they can hardly ask for the money back. Also, gifts from income do not fall within IHT or PCT liability, so if she sells all her assets, she could use them to generate a short term income, which she could gift away, avoiding IHT or home fees. On the other hand, if she manages to avoid paying £450.00 per week, then someone else has to pay it. That someone is Mr Taxpayer. Why would I want to pay to keep your granny in a home?
(I think they should change the law on this one.... if you ever need to go into a home, your life will be so pointless that you should be shot instead - I visit an elderly relative in a home about three times a week - All she does is eat and fart........... hmmmmmmm, couple of beers into the equation and it doesn't sound that bad
)
(I think they should change the law on this one.... if you ever need to go into a home, your life will be so pointless that you should be shot instead - I visit an elderly relative in a home about three times a week - All she does is eat and fart........... hmmmmmmm, couple of beers into the equation and it doesn't sound that bad
)
10 February 2007, 02:01 AM
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