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Dont want to loose a property i own to pay for care home.
siemli
Posts: 8 Forumite
in Cutting tax
Can you please help.
I had an oppotunity about 9 years ago to purchase the council flat my nan lives in.
She has lived there 60 years and was entitled to max discount.
I purchased the property and we had a deed of trust made to protect us both which read "all finance to purchase this property has been paid for by my grandson .... he owns the property. I ... however will live in the property as long as i so wish and after my leaving/death the property is passed to my grandson....
Her will reads the same that i own the flat but we left the deeds in her name so i could "Inherit" the property.
Unfortunately my nan has now had to go into a home as she is unable to walk by herself althought she is mentally ok.
Could i loose the house to the government to pay for her care.
I paid for the house in full and have no loan or morgage outstanding on it.
How should i safe guard myself.
I obviously would like to avoid capital gains tax if possible hence "Inherritance".
The flat is worth around £120k
Many thanks,
S
I had an oppotunity about 9 years ago to purchase the council flat my nan lives in.
She has lived there 60 years and was entitled to max discount.
I purchased the property and we had a deed of trust made to protect us both which read "all finance to purchase this property has been paid for by my grandson .... he owns the property. I ... however will live in the property as long as i so wish and after my leaving/death the property is passed to my grandson....
Her will reads the same that i own the flat but we left the deeds in her name so i could "Inherit" the property.
Unfortunately my nan has now had to go into a home as she is unable to walk by herself althought she is mentally ok.
Could i loose the house to the government to pay for her care.
I paid for the house in full and have no loan or morgage outstanding on it.
How should i safe guard myself.
I obviously would like to avoid capital gains tax if possible hence "Inherritance".
The flat is worth around £120k
Many thanks,
S
0
Comments
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There's conflicting 'evidence' here.
You bought the flat, it's yours. Therefore CGT will be assessed when you sell it.
The deeds (by which I assume you mean Land Registry entries) are in your nan's name. That's legal evidence that it's hers, so it counts in her assets when assessing care fees.
Don't think you can have it both ways. Indeed there's a distinct danger you may get it neither.0 -
Could i loose the house to the government to pay for her care.
Based on how you have written the post then the answer is yes. It looks like a classic case of deprivation of assets.
If she had paid a full market rent for the last 9 years and the property was in your name then you would have got away with it.Indeed there's a distinct danger you may get it neither.
As does so often happen when people try this sort of thing and get it wrong. They end up being hit for far more than doing nothing.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Could you try to claim back the amount of capital you originally put into the purchase of the house (what was this by the way).
If the property is in your nan's name it is her asset. However, maybe you could be entitled to the money you 'lent' her for the purchase of the property.
I assume the deeds had to be in her name as only she was eligilbe for the ridiculous discounts offered under right to buy. This seems fair. Otherwise everyone would go around offering to buy people's council houses and getting discounted property - effectively to the cost of the public purse.Those who will not reason, are bigots, those who cannot, are fools, and those who dare not, are slaves. - Lord Byron0 -
There will be no IHT as its way below the threshold so no worries there.
Also there will be no capital gains either until it is sold.
Furthermore, your nan may be the official owner according to the land registry but the deed of trust will legally over ride this. Therefore she will be acting as a trustee only, and you own the property.
Many councils care terms have a set amount of time they can go back and still include gifted assets in to the means testing, I would be amazed if they can go back 9 years. Furthermore, if you paid for the house, it was never really gifted to you anyway.
Ignore the talk about market rent, that is a red herring and only applies to gifts of assets. As you paid for the house it is never a gift.
If in doubt go see your solicitor, otherwise get hold of the councils care home rules and find out how they will calculate your Nans total assets which they will include in the means testing to calculate her potential care costs.0 -
Interesting post about modern morality.
I do want to buy a house from taxpayers at a massive discount.
I don't want to pay care home fees although I have assets.
I don't want to pay Inheritance Tax.
I don't want to pay Capital Gains Tax.
I do want all the facilities that these taxes pay for.
And, actually, I would prefer my Nan to have to spend the rest of her days in the cheapest Council care possible even though she could have better by supplementing from her assets, in order to protect her loving grandson's "inheritance".
Maybe I'm getting too old and curmudgeonly for this lark!0 -
Interesting post about modern morality.
I do want to buy a house from taxpayers at a massive discount.
I don't want to pay care home fees although I have assets.
I don't want to pay Inheritance Tax.
I don't want to pay Capital Gains Tax.
I do want all the facilities that these taxes pay for.
And, actually, I would prefer my Nan to have to spend the rest of her days in the cheapest Council care possible even though she could have better by supplementing from her assets, in order to protect her loving grandson's "inheritance".
Maybe I'm getting too old and curmudgeonly for this lark!
Easy to preach over the internet isn't it when there's no way of assessing what you would do in the same situation.0 -
Is Granny moving to Scotland an option?
The inequalities btwn the 2 countries are grossly unfair. :mad:Value-for-money-for-me-puhleeze!
"No man is worth, crawling on the earth"- adapted from Bob Crewe and Bob Gaudio
Hope is not a strategy
...A child is for life, not just 18 years....Don't get me started on the NHS, because you won't win...I love chaz-ing!0 -
VfM4meplse wrote: »Is Granny moving to Scotland an option?
If you are talking about so-called free care for the elderly in Scotland that won't stop the house being taken either.
It's only free personal and nursing care, so a maximum of £216pw, £149 of that is personal care. I believe in England the NHS fund [STRIKE]personal[/STRIKE] nursing care if required.
Also it's only if you are assessed as needing them. All other care costs have to be met by the individual.
http://www.scotland.gov.uk/Topics/Health/care/17655/FAQsThe inequalities btwn the 2 countries are grossly unfair. :mad:
Before getting mad you should look further into what is provided.0 -
I believe in England the NHS fund personal care if required.
Incorrect, the NHS in England funds those with health needs only.Value-for-money-for-me-puhleeze!
"No man is worth, crawling on the earth"- adapted from Bob Crewe and Bob Gaudio
Hope is not a strategy...A child is for life, not just 18 years....Don't get me started on the NHS, because you won't win...I love chaz-ing!0 -
VfM4meplse wrote: »Incorrect, the NHS in England funds those with health needs only.
Sorry that was my mistake - I meant to write nursing care.0
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