will the government help itself to nearly all your savings?

EdInvestor

An immediate needs annuity can be used to cover this cost without involving the council at all. Elderly homeowners cvan often cover much of the cost themselves from savings.

caveat_emptor

dunstonh wrote:

My understanding is that the property is held tenants in common and on death of first spouse their half of the property is placed in trust with the surviving partner being allowed to remain in the property. Apparantly a council cannot force sale of the house to pay for care home charges when the property is not owned outright and is part in trust. Three councils (all central London) have attempted to go to court on this but have failed. So, this prevents the property being used to care home fees.
As I said,the specifics are done by the solicitors. So a solicitor would be in a better position to answer that with the exact terminology and process.

It's a discretionary trust and one of the few that Gordon Brown hasn't put a stop to.....yet. Ownership of the house is divided between husband and wife.
On death of the first spouse his/her part plus assets pass to the trust which protects the beneficiaries of the trust from inheritance tax that would otherwise be payable on death of the surviving spouse.

Debt_Free_Chick

jem16 wrote:

Another view;

You work all your life and you pay tax. You try to save/invest for your retirememnt, often with difficulty as you probably have a large mortgage and family commitments and your savings/investments get taxed. You get your pension that you saved hard for and it gets taxed. You're unlucky enough to need care and all your savings pays for your care and then your house gets used. If you're lucky enough not to need care, you get hit with IHT because of the high value of houses and the low IHT threshold.

Meanwhile those who chose not to save etc get everything paid for, at least in part from all my taxes.

Where is the incentive to save and work?

It's getting off topic, but if I don't reply it's look like I don't have a view ....


But life's like that -= but that doesn't detract from the notion that those who can pay, should pay. There will always be those that can't, for a number of different reason - some more genuine than others. What do you propose happens to those that can't pay?

It's worth noting that those your taxes also go towards keeping criminals, paedophiles, terrorists etc in prison - but what choice is there?

Good luck if you can find a loophole, but you're just increasing the problem for the next generation. By handing your house down to your kids, you're also handing them higher taxes to pay for elderly care - for YOU and all others who do the same.

Milarky

EdInvestor wrote:

An immediate needs annuity can be used to cover this cost without involving the council at all. Elderly homeowners can often cover much of the cost themselves from savings.

So they roll their savings up and this covers part/all of the fees? Meanwhile, does the vesting of the savings constitute a 'deprivation of capital'? If it did not then you would get access to means-tested help (I don't know, does it get around the rules?) if less than £10K(?) of savings then remained. This is of course another level of complexity and does take us miles and miles further away from the 'free at the point of use' principle of the 'welfare state' (c.1948)

In an ideal world (which this isn't) the gov't would have used the 60 years since the creation of the welfare state to progressively balance these costs with the appropriate 'taxes' on consumption on similar 'pay-as-you-earn' principles. That's why income tax is 'fair'. That is why (I suggest) IHT and other 'lumpy' taxes are deeply unpopular. The council tax is another instance of a poorly designed tax (with little of no link to income) which shows in its unpopularity. Why the gov't never seems to have the time to sit down an 'do' sensible reforms - rather than spend that time on unbidden projects of dubious value - like PPI or health service/eductaion/prisons - escapes me ('masochism stategy'?) escapes me.

In the absence of the state 'stepping up to the plate' and reforming taxes as suggested individuals have to make their own arrangements. That's not how it should be - but it may well be the way it will remain for some time!

EdInvestor

Milarky wrote:

In the absence of the state 'stepping up to the plate' and reforming taxes as suggested individuals have to make their own arrangements. That's not how it should be - but it may well be the way it will remain for some time!

It seems to me the cponcept of the NHS exists so as to prevent people's lives from being blighted by the expense of medical care for serious illness, which can strike anyone at random anywhere.

But we are all going to die sometime, and it's more likely than not that we're going to live long enough to need some paid-for care on top of attendance allowance and whatever families can provide.Shouldn't people who can, pay towards this? It's hardly an unexpected expense.

nearlyrich

I can understand the concept of if you save up you have to pay if you don't the government pays but when you have money you have choices..I choose to save into a pension scheme etc knowing I won't get much from the state even though I pay a lot of tax and insurance each month.

The IHT and care home fees argument gets mixed up and whilst I agree it can seem unfair I also don't see why I should benefit from someone dying and leaving me a house which they probably paid for in the era of tax relief on mortgages whilst tax payers money paid for their care fees. (not that my parents have anything to leave me )

I am a great believer in looking after myself and taking responsibility for my life and finances

cheerfulcat

dunstonh wrote:

My understanding is that the property is held tenants in common and on death of first spouse their half of the property is placed in trust with the surviving partner being allowed to remain in the property. Apparantly a council cannot force sale of the house to pay for care home charges when the property is not owned outright and is part in trust. Three councils (all central London) have attempted to go to court on this but have failed. So, this prevents the property being used to care home fees.

AFAIK the process you are thinking of only applies to IHT planning, not care home fees. In any case if it is occupied by a spouse or partner, a close relative under 16 or over 60, or a close relative who is disabled, the house will not be considered for assessment anyway. More here.

In general, I take issue with the idea that " the government " ( that is, the hard-pressed taxpayer ) should fund care home fees so that someone can leave an inheritance to his or her children. If the children are that concerned they can jolly well look after their parents themselves.

jem16

Debt_Free_Chick wrote:

................ What do you propose happens to those that can't pay?

For those that can't pay, I'm all for them getting the help they need.

Dora_the_Explorer_5

Those who have assets which can be used to pay for their care should use them. Otherwise millionaires would have their care fees paid by the gov and where's the justice or sense in that?

CIS

If you look at from the point of view of 'Ive paid all my taxes', remember that most people would be in the red on tax paid after 1 reasonable visit to the hospital.

If you can afford to pay then you should.