My mum wants to sign her flat to sister

GavB79

There is a similar question in today's Mail (shudder). A mother going into care and her son wanting to stay in her house. The answer given was that if a relative is over 60 they can stay in the house of the person going into care, and the home is not counted as an asset when doing an assessment.
So if the sister is over 60, the flat can stay in the mother's name with the sister living in it, without it being counted for fees. There is no need to sign it over.
HTH

noelphobic

GavB79 wrote: »

So if the sister is over 60, the flat can stay in the mother's name with the sister living in it, without it being counted for fees. There is no need to sign it over.
HTH

I am not sure that would apply if the sister had only just moved in - it would be more likely to apply if the sister had lived there for some time, or had always lived with the mother.

The home is also disregarded if the relative living there is disabled, even if they are under the age of 60.

Hermanmunster_2

Yorkie1 wrote: »

There is confusion between two separate issues here.

Inheritance tax - property given away is treated after death as still remaining in the person's estate for IHT purposes, although there is a sliding scale regarding how much tax is charged until 7 years after the gift has passed, at which point the gift can no longer form part of the estate.

Deprivation of capital - where the state looks at how much money / assets a person requiring care has, in order to determine whether they are able to fund their own care. Any property given away is treated as being part of those assets, and as previously stated there is no time limit for that.

Does this effectively mean you cannot give a substantial sum away to your son or daughter at any time as it could be construed that you where depriving yourself of your assets?

Hermanmunster_2

If the relative living with you is over 60 and the house is not counted as an asset does it have a charge placed against it similar to the charge put on a husband or wife’s asset should one go into care whereby the house value of the property is not realized until both parties die?

noelphobic

Hermanmunster wrote: »

If the relative living with you is over 60 and the house is not counted as an asset does it have a charge placed against it similar to the charge put on a husband or wife’s asset should one go into care whereby the house value of the property is not realized until both parties die?

a charge would not be placed on a property where a spouse is living. The only way the value of the house could be used to pay for care costs if a spouse lived there would be if the spouse died while their partner was in care and the person in care inherited all (or possibly part) of the house. If the person in care died first then there would not be a charge on the house and the spouse left in the house could do with it as they wished.

If another relative over 60 lived there and died before the person in care then the value of it would be counted as an asset I would imagine. If the person in care died first then it would be ignored.

A charge is usually only placed on a property if the person going into care is the sole owner. In cases where the property is part owned by another party (not a spouse) then it is more problematic, as the argument is usually that you can't sell part of a house.

I am not a lawyer and this is complicated so I can cope with constructive criticism if I have worded anything badly or got anything totally wrong btw!

noelphobic

Hermanmunster wrote: »

Does this effectively mean you cannot give a substantial sum away to your son or daughter at any time as it could be construed that you where depriving yourself of your assets?

it's a bit of a grey area, to say the least! If you gave a child or children a large amount of money when you were in your 40s or 50s and in good health then it would be unlikely to cause any problems re deprivation of assets, although if you were unfortunate enough to die within 7 years and the amount was large enough then inheritance tax could be payable. However, if you were in poor health and/or elderly (arguably) then it could be seen as deprivation of assets. It hinges on whether you could reasonably have been expected to know that you would need to go into care and had given your assets away deliberately in order to avoid paying for that care.