Giving money

Petra this might help
The short answer is that you can give away £3K without having to pay any tax, but of course it is a bit more complicated than that, depending on your circumstances.

I don't think it would ever be illegal to give your money to anyone - but as jane says, taxwise there are limitations.

I am writing this on behalf of my SIL.
Her stepmother has gone into care. The stepmother is a lot younger than my SILs Father (he is 90)
The situation is: he has been very I'll recently and the family are concerned that he will die before her and all his money will go towards her care. I must put in here that this was never a happy marriage and there was a lot of bad feeling between the stepmother and the children.
I suggested that he give his money away to the children (and DG children)
But I have something in my head about you can only give so much a year. Or have I imagined this.

Petra that does sound a complicated and difficult situation indeed.
I'm not sure I have correctly understood the family relationships here, but why doesn't your SIL's father just make a will leaving however much money he wishes, to your SIL and her children?

In those circumstances what Jane has said most certainly applies, and your SIL should get legal advice. Any giving away of her father's money could be seen as an attempt to avoid care home fees in the future.

I think, after reading what all of you have said, that it's best to get legal advice.

I believe if you gave money away and survive for 7 years , no tax to be paid .

Thats what we hope anyway .

You are probably right to consult a solicitor though .

Yes, you're right Nonu, but it sounds as though the chances of Petra's SIL's father lasting 7 years aren't that high.

Hi

Do I understand this right. A wife is having to go into care and she is expected to last longer than the husband who is not going into care.

I do know of a case like this and the husband just willed his money ( about 90% of the total wealth to the children ) and passed away a few weeks later.

Social Services did not like it but as the money was legally his they could not do anything about it.

The children inherited the cash and left the council to pick up most of the care home bill.

Frank

A spouse's apparent assets are not automatically exclusively his (or hers) when there are such things to think about as the marital home.

Hi Absent

In my parents case the marital home was owned on a tennants in common basis.
This meant my mother and father owned separate halves.
When my mother passed away her half came to me and my father kept his half.
Happily my father never went into care but under normal circumstances the council could only use half of it towards the care fees.
As it happened my wife passed away and I went to live with my father so the council could have not taken the house to pay for any of the care fees anyway.
I do know somebody who split the house into tennants in common a week after the husband went into care as he only had physical disabilities and the wife passed away before him.
Social services did not like the situation but legally they could do nothing about it.

Frank

This happened in my own family recently. We are eternally grateful that my late FIL made the will as he did years ago.

You might be able to get the advice from the CAB. If the money is all his to give away then I don't think the social services can get their hands on it. If however he gives away more than the inheritance tax limit the beneficiaries will have to pay 40% tax on everything over and above that limit. This is assuming he doesn't live for another 7 years.

He cannot give away his house and still live in it unles she pays a market rent which would of course be taxable for the person who received it.

You can give away a total of £3000 every year without any tax issues and more if it comes out of your income and doesn't affect your standard of living. If one of your children is getting married you can give them £5000 as a one off gift.

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Why has this been added to this thread

Ha sorted, one minute there next gone.

Someone correct me by all means but I thought no relative could be held responsible for payment of someones care fees

ninathenana

You are correct that no relative could be held responsible for payment of some ones care fees.
Unfortunately I do know of a situation where a father was in hospital with dementia and lots of homes had looked at him but would not take him.
He was assessed as being entitled to full NHS funding.
Eventually one expensive home was prepared to take him and the father had been living with the daughter in a very expensive house which belonged to the daughter.
The social worker then said to the daughter that if she insisted on NHS funding it would have to go before a panel and it could take weeks to get a decision and the father would be stuck in hospital during that time.
The social worker also said the room could also be gone by the time the panel reached a decision.
The daughter refused to pay and the father was transferred to the home 4 days later.

Frank