Gifts to Grandchildren

kathrynwilkes

I believe a grandparent can gift their grandchildren however much they like. If the money is given to the grandchildren would it show up for means testing. i.e. will the state help to pay for nursing home?

kathrynwilkes

I have just read this would be "deprivation of assets" which is illegal. I am not wanting to do anything illegal. Is there anything legal I can do?

RayWolfe

It's not illegal to give the money away ... you would just not get any money from the state or local authority to pay for your care, should you need it. You have the correct term; deprivation of assets.
Your executors may also have problems with Inheritance Tax should you die within 7 years of the gift.

sloughflint

RayWolfe wrote: »

Your executors may also have problems with Inheritance Tax should you die within 7 years of the gift.

That sounds a bit dramatic.
Gifts within 7 years of death would just need to be listed. IHT may not be due depending on estate size.
Some gifts are exempt from IHT:http://www.hmrc.gov.uk/cto/glossary.htm#Exemptgifts

kathrynwilkes

Thanks for all the information. Please can you help me with the following: as a Grandparent I may give any amount I like to my grandchildren (subject to IHT), but I may not cause "deprivation of assets". I wish to pay my grandchildrens' school fees and this could drain my funds while I am still needing to live at the Nursing Home. Should this arise, would the Local Authority then pay for the Nursing Home? Thanks in advance.

RayWolfe

I shouldn't think so.
Why, if you need or may need care, would you want to give all your money away so that you receive lesser care? You presumably saved for a rainy day ... the rain has arrived!
... and, of course, why should the rest of us pay for your care if you have your own resources? I understand that you want to look after your family, but should my tax-paying, 92 year old MiL with very little income, pay for your gandchildren's privileged education?

margaretclare

kathrynwilkes wrote: »

I have just read this would be "deprivation of assets" which is illegal. I am not wanting to do anything illegal. Is there anything legal I can do?

What have you got in mind?

I understand that you want to give money to your grandchildren. Fine, understandable, perfectly reasonable, and if I decided to give money to the GC then I would do so, although school fees have never been a possibility. If I really did want to give to the GC I would do so and it would be a cold day in hell before anyone succeeded in preventing me from doing what I liked with my own money.

However, that's not really what you're asking, is it? You mention 'while I am needing to live at the nursing home'. Can one ask - do you live in a NH now, or when are you planning to go and live in one? If this is a definite plan of yours, not just a vague possibility somewhere on the horizon, then may I ask who do you imagine will/should pay for this 'lifestyle choice' of yours?

Percybridge

kathrynwilkes, I have been looking into this area too because I have a relative in a similar position, and have taken some advice.
I think you are talking about the deprivation of assets rules rather than IHT, which I will not therefore mention as the rules are different.

If you are not in a home, you can give away as much as you like, provided it was not with the intention of avoiding care home fees, or claiming means tested state benefits. Although the LA will have to prove deprivation of assets, they have difficulty proving that this was your intention if the gap between claiming and the gift was more than 6 months.

If you are now in a home, and even if you are funding it yourself, if you are already paying the school fees, then the LA cannot claim that this was to deprive yourself of capital, and therefore will allow it under normal expenditure rules. There are similar rules if you normally gift to charity.

If you suddenly started paying the fees, whilst in a nursing home, it would be difficult to prove that you were not just paying the fees in order to make a claim.
You may be sucessful if you started paying the fees because of some unforseen circumstances in the parents income, and you helped out.

HTH

margaretclare wrote: »

may I ask who do you imagine will/should pay for this 'lifestyle choice' of yours?

I find this quite staggering, given that you, yourself are quite proud of the fact that you claim benefits to which you are not entitled, and have had to lie to get.
see this post.
http://forums.moneysavingexpert.com/showthread.html?p=10279255#post10279255

Who do you imagine pays for this?
The difference between you and the OP, is that the OP wants to be honest about it, and not tell lies.