gifting allowance?

Moggies11

My father is in a care home in Scotland. He is "self-funding", that is, he pays all his carehome fees from his savings (house sale!) We have heard that it is possible for him to "gift" £3000 to each of his children & £1500 to each grandchild, each year, which would obviously reduce his capital, without the authorities being able to question this. Does anyone know if this is the case?
Don't want to do anything dodgy, just want to know if this is correct!
Thanks!

Mumstheword

Hi and welcome! There is an amount that your dad can give to each child (maybe grandchild too) each year which is permissible without inheritance tax liability - you need to google the issue, unless someone can give you a link on here. You could probably find the links on the gov.uk website.

Other gifts, I think, operate on a sliding scale. I 'think' that to avoid inheritance tax he needs to survive a gift by 7 years, but there's a sliding scale up to the 7 years.

But I think you're more interested in making sure you dont break any rules by him disposing of his assets to avoid care home costs, which I know nothing about sorry!

Hopefully you'll get an answer on here. We, collectively, are a pretty knowledgeable lot! You could also look at the articles written on this subject, from the site's home page.

Moggies11

Mumstheword wrote: »

But I think you're more interested in making sure you dont break any rules by him disposing of his assets to avoid care home costs, which I know nothing about sorry!

Hopefully you'll get an answer on here. We, collectively, are a pretty knowledgeable lot! You could also look at the articles written on this subject, from the site's home page.

Thanks for replying! That's it exactly, we're not in the realms of inheritance tax, we just want to know his yearly "allowances" I suppose!

Violetta_2

Info here as mumstheword rightly said http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/PlanningYourPersonalFinances/DG_10013916
it all seems to apply to taxation though, not sure if there are rules around it being some sort of disposal of asset's or not. (not sure that's the right term either)
ETA- deprivation of capital is the term I was thinking of. some info (though not sure it answer's your question) here

jackieglasgow

Is your father paying all of his fees himself, or is he claiming the first £227 from the Social Work department, as he is entitled to under the law? Some people do not claim their allowance for one reason or another, so firstly, please make sure this has been done for him.

Mojisola

Moggies11 wrote: »

My father is in a care home in Scotland. He is "self-funding", that is, he pays all his carehome fees from his savings (house sale!) We have heard that it is possible for him to "gift" £3000 to each of his children & £1500 to each grandchild, each year, which would obviously reduce his capital, without the authorities being able to question this. Does anyone know if this is the case?
Don't want to do anything dodgy, just want to know if this is correct!
Thanks!

I'm sure that it's a total of £3000 a year but this is just to keep the gifts exempt from IHT.

I think this would definitely come into the "deprivation of capital" rules unless he had been doing this as a regular thing for some years.

Moggies11

Thanks everyone for all your suggestions - it's a bit of a minefield isn't it?! You'd think it would be clearer in "the rules".
Can't be the first person who wants to know the correct answer!!