Family home dilemma

Unfortunately you have fallen foul of the "depravation of an asset rule" in paying for care. Your DF just gave his property away for no reason other than he wanted to. Yes the value will be taken into account for care and he will be treated as self-funding. There is still provision for a 12 disregard to allow your DF to ensure he is okay in a care setting. But he is still self funding due to the amount of capital you mentioned. No way out afraid.

By the way, there is no such legal 7 year rule. It's the reasoning behind the transfer if an asset. Your local authority should be able to give you info on how they apply the legislation. Some are more lenient than others.

The 7 year rule is only to do with inheritance tax, And nothing to do with getting rid of assets to avoid care he me fees.

Before being critical, please remember that whether a person has 'paid their dues or not' is irrelevant if they are afflicted by any other disease, disability or illness. Their medical and care costs will be funded by the NHS unless they choose to go private.

Only the various types of Dementia are treated differently (perhaps because there is no cure or effective treatment) leaving the patient or their close family to pay for any help e.g. personal care, respite for the main carer, even end of life care and all the things they can no longer do themselves from shopping, cooking and cleaning, to minor repairs, gardening, transport, window cleaning. The only alternative is for one family member to give up the rest of their own life to provide unpaid 24/7 care.

shortlegs - why not read the thread instead of being unpleasant? I am well aware that a solicitor can help me. Forums are there for a reason and if I choose to ask a question or two that I'd like opinions on, I will.

Perhaps a forum isn't for you as you fail to understand this.

I may be cynical but I can see no reason for your father signing the house over to you other than to avoid inheritance tax or the payment of care fees.
I am not hard hearted but I do not see why wealthy people should get away keeping their assets when my parents who worked hard and saved for their retirement have had to pay for their care leaving nothing over.

The 7 year rule applies to IHT (Inheritance Tax) nothing to do with whether the house may have to sold if Dad has to go into a Care Home. Speak to your Solicitor, Local Authorities can claim against the house if they suspect it was gifted to avoid paying fees.

My Step-F left myself & DD a quarter share each in their property, Mum stills lives there. Step-F died 20 years ago so I doubt Local Authority can claim against our share but can claim against Mum's half share

G23 I’m actually a huge critic of the current system which I think is morally quite unjustifiable and so agree with what you say. Successive governments have shied away from reform and in this vacuum have emerged all sorts of schemes to try ( often unsuccessfully) to subvert the current system. That’s what I’m critical of - that some people play the system and that houses are often the vehicle they try and use.

The current system is a lottery with no fair principles underpinning it. One family will inherit eg a house because they were lucky enough to have parents who never required to go into care - another family could see much of their inheritance go in care fees. As you imply, if ones parents had cancer, the inheritance wouldn’t go on paying for the medical treatment. So we come back to the big question - how do we fund social care? The unfair lottery of the current system? Or through some form of hypothecated tax?
But in the meantime (and I speak as someone whose DH lost most of his inheritance to care hone fees) I won’t do anything to try and reduce our liability as that just shifts the problem onto others.

Granny23, there are a lot of people on this thread who may think it even worse if the cash-strapped NHS pays for peoples care, than if the State pays. Frankly even if you have dementia which my husband had and are quite badly affected so that you cannot be left alone because you will set the house on fire, injure yourself, try to kill somebody etc. you should still not have to pay for your final care, after subsidising a lot of freeloaders and crooks all your life through your taxes. Dementia is a terrible thing and it cost me many tears while I looked after my husband. It is not just misplacing your keys. My husband shouted at me in public places, including in a restaurant, and accused me of trying to poison him. He swore at me, which was completely alien to him. He tried to get out of the house at midnight, saying he wanted to go home. He attempted to strangle me. He could not recognise me nor his own children. Dementia is almost the worse thing you can get. The poor man was blind too. He refused to eat while in care and lost a huge amount of weight.
So don't think dementia is less important than any other illness. It would be a good thing if you could all remember that.

You will also have to consider that if you do not self-fund you will probably have much less choice and your father may not be able to get a place in the care home you prefer. Local Authority funding is often less than the cost of many care home - especially if you have set your heart on a particular, nice care home.

Funding was one of the questions asked by the care home we chose assessed my mother. In 2015 the care home charged £950 per week but the maximum local authority funding was only £630 - so they only accepted self funders.

Look up the case of Pamela Coughlan and see the video and the advice from the Law Society.

OK, Kittylester, Anja and other hardhearted souls, I think you may have to wait until somebody you love has to go into care and the boot will be on the other foot

Good heavens Annaram how on Earth can you assume that kittylester and anja are in any way hard hearted or have not been in that position?
I do not presume to know anybody’s personal details in RL but I do know that kittylester has considerable experience with Alzheimer’s and other firms of dementia, training carers and advising on the legal and financial implications.
OP asked for advice and they among others have given it. The “deprivation of assets” ruling is extremely relevant and if it comes to being assessed for residential care, *plum cushion*’s father (or her brother and herself) may well find that they will be paying for his care.
If we could all sign our houses over to our children to avoid care home fees this would be a loophole which everybody would take advantage of.
You yourself would be liable for CGT if your brother bought your share as it is presumably not your principal home.
By all means ask for opinions but the bottom line is that you need to be in possessioof the facts.
Do consult a solicitor.

Cold good post. Also some card homes because what the la will pay is so low actually use a form of cross- subsidy from the self funding residents - this isn’t formally acknowledged but it is accepted it happens. So not only are self funders paying for themselves but subsidising the la funded residents - or rather subsiding tax and council tax payers some of whom will be much better off than they ( the self pay residents) are.

Well if you can understand my last post I’m well impressed - it seemed clear when I wrote it

Reading through all the posts on this thread I'm afraid I don't have anything useful to add in the way of practical advice (I was "lucky" enough to have both my lovely mother and dad die without needing to go into care) however I would like to offer support and warmest feelings to all of those who have suffered in this way. Dementia is indeed a terrible thing, as Annaram1 says, and I do hope the OP's father can stay in his home, with the support of carers coming in to help him, for as long as possible. The suggestion of renting out the house, should the necessity of a care home arise, is also a good one.
Meanwhile unhelpful and hurtful posts should not be appearing here ... Good luck Plumcushion!

^ I read an article once which said that, unlike HMRC, there is no limit to how far back councils can go to see if assets have been disposed of to avoid payment of car3e costs.^
humpty and of course, HMRC can go back to see if the family were trying to avoid IHT, if applicable. It is usually six but that is not the limit of time.

Granny23 Sun 17-Feb-19 14:04:40

I was pondering this earlier and wondered why dementia is treated so differently to some other illnesses Granny23. You have made the point well.

I’m sure it’s 7 for IHT - but it’s on a sliding scale between 3-7 years so the nearer you get to the 7 years between giving away and death, the smaller the tax paid( if of course any has to be ). It goes from 40% if less than 3 years to only 8% between 6-7 years

Thanks Maw. And, I echo your advice to consult a solicitor.

Annaram1, my mother went into a care home when her dementia meant that she could no longer live at home. When she died her assets had been depleted to £25,000 after having had a good family home and savings.

I fail to see why she should have been able to pass on any of her money to my brothers and I while expecting anyone who paid tax to pay for her to live in a nursing home.

Maryeliza is right about the inheritance tax
www.gov.uk/inheritance-tax/gifts

So is * Maw* about the Capital Gains Tax

Proper legal advice is certainly needed.

If someone has a very large house with land such as the OP's father, I do fail to see why other taxpayers should be expected to fund care for that person - unless it is medical or nursing care in which case that part should be covered.

A relative was in hospital after a nasty fall, had an operation and it was decided by the consultant that she was not fit to be sent home straight away so she was sent to a home (which happened to be a home for dementia patients). She was assured that as this was ongoing nursing care she would not have to fund this herself - but she got a very large bill from the Council for four weeks' stay which she paid.

kitty why do you thing it’s fair to have taxpayer funded medical care but not social care? I am genuinely puzzled by this as it’s not like choosing to spend your money on expensive holidays or cars. Residential care is ipso facto a necessity that people don’t have a choice about and so I see it as someone we should share out the cost of between us and hope we are lucky enough never to need it.

Same question really Jal the person with the large house and garden is entitled to free health care why is that fair then? If we have a fair system of taxation, then those with more would pay more in. And I think there’s also an issue to be discussed about other forms of taxation such as wealth tax, land tax etc. Also why are houses free from CGT? There must be a fairer way than the current system which is anyway failing badly and in no way fit for purpose

The house you live in, your principal private residence, is not subject to CGT. Other properties you own are deemed investments, so are subject to CGT when sold.

Yes sorry meant the houses we live in being free from CGT