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    • Hutch100uk
    • By Hutch100uk 8th Jan 18, 10:20 AM
    • 327Posts
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    Hutch100uk
    Deprivation of assets
    • #1
    • 8th Jan 18, 10:20 AM
    Deprivation of assets 8th Jan 18 at 10:20 AM
    Apologies if this is the wrong section for this.

    My parents would like to put their house in my name (and my siblings) in order to protect their assets from being used should they go into a care home.

    They have taken legal advice but I'm not convinced its the right advice.

    I keep reading about 'deprivation of assets' and would be interested to know how likely this is. In some articles I read that the local authority would be likely to seize the asset anyway if they thought it had been done deliberately. Other articles say that if its done while they are still in perfect health with no immediate need for care, it should be fine.

    I'm not 100% sure they should go ahead as I understand there will be tax implications if I was to purchase another home (I rent at the moment). This all seems like a minefield.

    Any advice?
Page 1
    • Silvertabby
    • By Silvertabby 8th Jan 18, 10:42 AM
    • 2,130 Posts
    • 2,849 Thanks
    Silvertabby
    • #2
    • 8th Jan 18, 10:42 AM
    • #2
    • 8th Jan 18, 10:42 AM
    Deprivation of assets and care home fees apart, what would happen if you or one of your siblings divorced - and the house had to be sold in order to liquidate the marital assets?

    A minefield indeed.

    Plus, you do realise what you are asking - you want me to pay for your parent's care homes instead of using their own money?
    • Hutch100uk
    • By Hutch100uk 8th Jan 18, 10:54 AM
    • 327 Posts
    • 79 Thanks
    Hutch100uk
    • #3
    • 8th Jan 18, 10:54 AM
    • #3
    • 8th Jan 18, 10:54 AM
    Deprivation of assets and care home fees apart, what would happen if you or one of your siblings divorced - and the house had to be sold in order to liquidate the marital assets?

    A minefield indeed.

    Plus, you do realise what you are asking - you want me to pay for your parent's care homes instead of using their own money?
    Originally posted by Silvertabby
    I'm not married so that's not an issue. My sibling is though and that has already been raised.

    Yes that is exactly what I mean. But then I would also be paying for their care (as a tax payer) and they were also tax payers!
    • HappyHarry
    • By HappyHarry 8th Jan 18, 10:55 AM
    • 515 Posts
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    HappyHarry
    • #4
    • 8th Jan 18, 10:55 AM
    • #4
    • 8th Jan 18, 10:55 AM
    I think your parents would be unwise to take such an action.

    You could ask your parent's local authority about how they would view this scenario. That should give you a clearer idea than you would get anywhere else.

    You could also try asking a solicitor to guarantee they will make good any future care fees that the local authority claim under such circumstances. I suspect you won't get far though.

    Though there are many articles claiming that a local authority could not claim deprivation of assets if the parents were in good health when the property was given away, all of them come with very, very large caveats. Mainly saying that such courses of action are untested in law.

    Other concerns:
    (i) It does not help with IHT planning.
    (ii) You and your siblings may face a CGT liability when your parent's house is eventually sold.
    (iii) If any of you or your siblings get divorced, a share of your parent's house will form part of the marital assets.
    (iv) If any of you or your siblings hit financial difficulties, your parents house will be counted as an asset.
    (v) You may need to pay stamp duty when you acquire your parent's home.
    (vi) As you will own a property, you will suffer the enhanced rate of stamp duty should you ever purchase your own home.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • adam81
    • By adam81 8th Jan 18, 11:11 AM
    • 229 Posts
    • 59 Thanks
    adam81
    • #5
    • 8th Jan 18, 11:11 AM
    • #5
    • 8th Jan 18, 11:11 AM
    (ii) You and your siblings may face a CGT liability when your parent's house is eventually sold.
    Originally posted by HappyHarry
    Just on this point, my parents have a house they are looking to leave in their will. If left to the children would CGT still be due? Currently they have a large amount of CGT in the property which is why they are holding on to it.

    Is it the same if they left it to grandchildren?
    • Browntoa
    • By Browntoa 8th Jan 18, 11:14 AM
    • 32,252 Posts
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    Browntoa
    • #6
    • 8th Jan 18, 11:14 AM
    • #6
    • 8th Jan 18, 11:14 AM
    If the property is in both names then they have 2 lots of CGT allowance

    But back to the original question , it's definitely deprivation of assets , no limit on how far back that a council can claim
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • dunstonh
    • By dunstonh 8th Jan 18, 11:18 AM
    • 90,437 Posts
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    dunstonh
    • #7
    • 8th Jan 18, 11:18 AM
    • #7
    • 8th Jan 18, 11:18 AM
    If it a transaction is done for a justifiable reason and at the time their health suggests no reason why they would need care, then it is not a problem. However, if it is done with the intention to qualify under a means test then it can be included as a deprivation of assets.

    It has to be a happy coincidence. For example, if the transaction was justified under tax planning. Then that would be fine. So, unless there is a justifiable alternative reason for doing the transaction, it will be at risk of deprivation of assets.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • HappyHarry
    • By HappyHarry 8th Jan 18, 11:21 AM
    • 515 Posts
    • 774 Thanks
    HappyHarry
    • #8
    • 8th Jan 18, 11:21 AM
    • #8
    • 8th Jan 18, 11:21 AM
    Just on this point, my parents have a house they are looking to leave in their will. If left to the children would CGT still be due? Currently they have a large amount of CGT in the property which is why they are holding on to it.

    Is it the same if they left it to grandchildren?
    Originally posted by adam81
    The CGT built up by your parents will be extinguished on their deaths. Instead, IHT is applied.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • Mojisola
    • By Mojisola 8th Jan 18, 11:24 AM
    • 28,752 Posts
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    Mojisola
    • #9
    • 8th Jan 18, 11:24 AM
    • #9
    • 8th Jan 18, 11:24 AM
    My parents would like to put their house in my name (and my siblings) in order to protect their assets from being used should they go into a care home.
    Originally posted by Hutch100uk
    Only a small percentage of people end up in care homes.

    The average stay is only a couple of years.

    While one spouse continues to live in the house, its value is not included in the financial assessment.

    If your parents own their home as 'tenants in common', they can leave their share to the children rather than the spouse (with the usual lifetime conditions, etc). That will preserve half of the value of the property.

    If your parents do need care and are relying on the council to pay for it, they may not like the places they are put.

    I would love to leave our children some money but I'm not going to do it in a way that might mean my last few years are spent in a miserable, poorly-financed care home.
    • Browntoa
    • By Browntoa 8th Jan 18, 11:25 AM
    • 32,252 Posts
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    Browntoa
    Personally I'd be happy that my parents were in a safe comfortable environment in their old age , my mum has sold her property and is self funding sheltered accommodation near me

    You do realise the vast majority of people don't need care at all
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • Browntoa
    • By Browntoa 8th Jan 18, 12:39 PM
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    Browntoa
    Think they didn't like the answers ?
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • Hutch100uk
    • By Hutch100uk 8th Jan 18, 12:50 PM
    • 327 Posts
    • 79 Thanks
    Hutch100uk
    Think they didn't like the answers ?
    Originally posted by Browntoa
    Pardon - bit confused by that?
    • Hutch100uk
    • By Hutch100uk 8th Jan 18, 12:51 PM
    • 327 Posts
    • 79 Thanks
    Hutch100uk
    Personally I'd be happy that my parents were in a safe comfortable environment in their old age , my mum has sold her property and is self funding sheltered accommodation near me

    You do realise the vast majority of people don't need care at all
    Originally posted by Browntoa
    Can I just point something out. My Mum is insisting on this. I don't personally think its a great idea, given the research I've done.

    You're making out I'm the one forcing them to do it to get my hands on their house. I couldn't care less about that. In fact, my parents were a bit miffed when I suggested it wasn't worth the hassle.
    • Browntoa
    • By Browntoa 8th Jan 18, 12:52 PM
    • 32,252 Posts
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    Browntoa
    Sorry , we have had similar posts in the past where the OP didn't like the replies

    Apologies if that's not true
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • Hutch100uk
    • By Hutch100uk 8th Jan 18, 12:54 PM
    • 327 Posts
    • 79 Thanks
    Hutch100uk
    Sorry , we have had similar posts in the past where the OP didn't like the replies

    Apologies if that's not true
    Originally posted by Browntoa
    No its fine. I 'm sure it does happen. My sibling and I were very hesitant about it and my parents got a bit annoyed with us. I'm not convinced their solicitor is giving them good advice and want to be able to show them the facts.

    I have an appointment to get some legal advice on this on Thursday.
    • Browntoa
    • By Browntoa 8th Jan 18, 12:56 PM
    • 32,252 Posts
    • 37,956 Thanks
    Browntoa
    There's trust's that can be used but they need expert setting up and can still fall foul of deprivation
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • Mojisola
    • By Mojisola 8th Jan 18, 12:57 PM
    • 28,752 Posts
    • 73,444 Thanks
    Mojisola
    Can I just point something out. My Mum is insisting on this. I don't personally think its a great idea, given the research I've done.
    Originally posted by Hutch100uk
    If you don't sign the paperwork, it can't happen.

    Would it help if you pointed out to her the problems that this may cause you and your sibling - CGT, no access to means tested benefits if you became ill or unemployed, stamp duty, divorce financial settlements, etc.
    • Hutch100uk
    • By Hutch100uk 8th Jan 18, 1:02 PM
    • 327 Posts
    • 79 Thanks
    Hutch100uk
    If you don't sign the paperwork, it can't happen.

    Would it help if you pointed out to her the problems that this may cause you and your sibling - CGT, no access to means tested benefits if you became ill or unemployed, stamp duty, divorce financial settlements, etc.
    Originally posted by Mojisola
    Yes we've already pointed these things out. They are aware of the stamp duty and divorce settlements but not necessarily the other things. I will go through all this with my solicitor and hopefully he will be able to detail it all to show its not worth doing.

    I don't want to refuse if they are insistent and fall out about it, but I'm genuinely not keen on the idea. Don't think my sibling is either. Hopefully they will see sense.
    • Browntoa
    • By Browntoa 8th Jan 18, 1:05 PM
    • 32,252 Posts
    • 37,956 Thanks
    Browntoa
    Tell them basically that they could land you all with a mass of tax and care debts to deal with afterwards
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • le loup
    • By le loup 8th Jan 18, 1:14 PM
    • 3,696 Posts
    • 3,651 Thanks
    le loup
    ......... and they will have to pay you rent.
    ......... and you will have to pay tax on it.
    ......... and their motives are a disgrace.
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