Renting to pay Care Home fees

mar<

I beg your pardon Fire Fox. That hasn't been on my mind for quite a long time.

What are your thoughts on the other course of action then... renting instead of selling?

Fire_Fox

mar< wrote: »

I beg your pardon Fire Fox. That hasn't been on my mind for quite a long time.

What are your thoughts on the other course of action then... renting instead of selling?

I think you need to ask yourself what your motives are, how does your mum benefit from that course of action? What happens if tenants wreck the property or don't pay their rent? What are the tax implications?

mar<

Hopefully she'd be able to pay for the care of her choice longer, rather than the state taking everything regardless of it being prudent or not. Of course I'd like to protect my inheritance - but it appears I had none, and my Mums' years of prudence were hugely misguided. By law that is all stolen by the state now.

Rosebud24

foreign_correspondent wrote: »

Hi,
I am wondering the same thing - it looks like my gran may soon have to go into residential care, and we are wondering whether it wold be be possible to rent her house out, rather than sell it, to go towards the fees...

any advice appreciated!

Foreign Correspondent, if your gran's capital (other than her house) is less than £23,000, there is another option (if her council offers it) of paying a contribution toward her care each month based on her income and deferring the rest of the cost until either the house is sold or your gran passes away. Also, the value of her house would be disregarded for the first 12 weeks of her being on the residential home. The relevant piece of legislation is the Charging for Residential Accomodation Guide.

If your gran's non-house capital is above £23,000, then renting is, in my opinion, a good option if you don't want to see her capital eaten away by care home fees. Just be aware that you will have to make sure some capital is accessible in the event of not having tenants for a period (or having tenants that do not pay their rent! :mad:).

Best wishes with your gran's care arrangements, I know it can be a very difficult time.

Fire_Fox

mar< wrote: »

Hopefully she'd be able to pay for the care of her choice longer, rather than the state taking everything regardless of it being prudent or not. Of course I'd like to protect my inheritance - but it appears I had none, and my Mums' years of prudence were hugely misguided. By law that is all stolen by the state now.

The state are not necessarily going to take everything, you don't just hand over the keys and bank statements in the first week! The interest on a sum of £350K is pretty substantial, plus the two pensions you mention coming in. Presumably your mum saved for a rainy day, and this is a rainy day.

BitterAndTwisted

mar< wrote: »

Hopefully she'd be able to pay for the care of her choice longer, rather than the state taking everything regardless of it being prudent or not. Of course I'd like to protect my inheritance - but it appears I had none, and my Mums' years of prudence were hugely misguided. By law that is all stolen by the state now.

Stolen by the State? That's yours and my taxes, matey. Care needs to be provided and by someone and those who have the means to pay for it should do so. Look into the difference between health-care and personal-care and you should see what it means and what is intended. Your inheritance is more important than the well-being of your own mother? Who would want such a thing? Shame on you! Have you seen the state of State-run nursing-homes? I wouldn't want to board a dog in some of them

Fire_Fox

mar< wrote: »

Hopefully she'd be able to pay for the care of her choice longer, rather than the state taking everything regardless of it being prudent or not. Of course I'd like to protect my inheritance - but it appears I had none, and my Mums' years of prudence were hugely misguided. By law that is all stolen by the state now.

The state are not necessarily going to take everything, you don't just hand over the keys and bank statements in the first week! The interest on a sum of £350K is pretty substantial, plus the two pensions you mention coming in. Presumably your mum saved for a rainy day, and this is a rainy day. The system is much the same for anyone wishing to claim a means-tested benefit, for most it's not more than £16K in savings or assets (other than your own home) without being expected to care for yourself. Bear in mind it isn't the state you are expecting to pay for your wealthy mother's care, it's the taxpayer.

Your mum can make some tax-free gifts to family members each year, it's worth looking on the inland revenue site for details if this is an avenue your mum would like to explore. My parents, who are in their sixties, paid the deposit on my brother's flat using this.

jennifernil

This is indeed a thorny problem.

My Mother had 3 brothers, 2 of whom earned big money, but were big spenders and never had any savings. Lived in a council house all their lives. Took lots of foreign holidays, always had the latest gadgets, etc.

By comparison, my parents were cautious, saved, bought their own house, started their own business, invested in pensions, rarely had holidays, and even when they sold their business were heavily taxed (this was early 70s).

Because my parents had saved, had they needed any state care they would have had to pay, but my uncles who had earned well but spent it all would not have had to.

How can this be right or fair?

mar<

BitterAndTwisted wrote: »

Stolen by the State? That's yours and my taxes, matey. Care needs to be provided and by someone and those who have the means to pay for it should do so. Look into the difference between health-care and personal-care and you should see what it means and what is intended. Your inheritance is more important than the well-being of your own mother? Who would want such a thing? Shame on you! Have you seen the state of State-run nursing-homes? I wouldn't want to board a dog in some of them

My Mum is indeed experiencing abysmal state care and I agree a dogs life would be preferable. Still, a dogs life cost upwards of £550+ a week. But there is no other option.

What is this fantasy personal care you talk of? The Bupa homes are the worst option of all... they actually locked my Mum in her room because they simply didn't have the staff to meet her needs. (Of course they didn't "lock" the door... it had a code lock which they kept secret. Officially tho' that isn't locked in).

If I wanted to keep the inheritance I could just move my Mum back into her own home.

BitterAndTwisted

If your mother has assets of £350k and the house has been valued at £130k then there is £220k's worth of assets which could cover over 7 year's-worth of care not including the income from her pensions, even disregarding any interest which might be accrued. Her house may never need to be sold and you may ultimately inherit it. Depends on how poorly she is now or may become later.

The house could be rented out but there are risks, especially for the naive or unwary. I wouldn't necessarily recommend that the rest of your mother's assets be invested in further property/s to provide enough income to cover the care-home fees unless you do a proper long-term business-plan and acquaint yourself with all of the responsibilities entailed by being a professional landlord so you know what the risks are and can take steps to avoid some of them,