Payment of Tax on selling Parents home

Greyman_2

My mother is due to go into a residential accommodation, with a Care package. Currently, she does not pay for her care package, as she is in her own home. The local council expect her to pay for the Care package and she has been advised that she must sell the house to fund the Care package.

1. I understand there may be restrictions on signing the property over to family members, under Government legislation and a tax payment is required?

2. If the house was signed over to family members and it was rented out and the funds generated paid for the Care package, can the Council object to this?

Merry Christmas and a Happy New Year to all,

BobProperty

Greyman wrote:

My mother is due to go into a residential accommodation, with a Care package. Currently, she does not pay for her care package, as she is in her own home. The local council expect her to pay for the Care package and she has been advised that she must sell the house to fund the Care package.

1. I understand there may be restrictions on signing the property over to family members, under Government legislation and a tax payment is required?

I think you are thinking of IHT, giving away assets to avoid it is subject to survival taper relief. I don't think it causes an immediate tax bill.

Greyman wrote:

2. If the house was signed over to family members and it was rented out and the funds generated paid for the Care package, can the Council object to this?

Merry Christmas and a Happy New Year to all,

It's going to have to be some house to do that. It may be possible but the "signing over to family members" looks like avoidance. Plus what guarantees will the care home have of getting the money compared with knowing it is being sold and will provide a lump sum which will last for many years.
Have you posted this in the Tax forum, too?

Greyman_2

Bob,
Thanks for the reply, the care package should be £500 per month,

All the best,

Bossyboots

Greyman wrote:

My mother is due to go into a residential accommodation, with a Care package. Currently, she does not pay for her care package, as she is in her own home. The local council expect her to pay for the Care package and she has been advised that she must sell the house to fund the Care package.

1. I understand there may be restrictions on signing the property over to family members, under Government legislation and a tax payment is required?

2. If the house was signed over to family members and it was rented out and the funds generated paid for the Care package, can the Council object to this?

Merry Christmas and a Happy New Year to all,

Quite simply, there is nothing she can do. If she signs the house over to anyone, she will be depriving herself of assets to avoid care fees and will be treated as though she still has that capital.

This is a subject that comes up time and again on these forums, usually after the elderly person has been told they need residential care. The fact is she has capital to pay for her own care and that is what should be used, rather than expecting the tax payer to pick up the bill.

seven-day-weekend

I don't see why the house can't be rented out though. Leave it in her name and with her pension and the rent from her house it should generate a large portion, if not all, of the care fees if they are £500 a month.

GhostDog_2

2. If the house was signed over to family members and it was rented out and the funds generated paid for the Care package, can the Council object to this?

Provided the care is paid for then what grounds would the Council have to object?
Presumably Mum is moving to sheltered accommodation with a package of care provided by a care agency?

Residential care homes in this area would usually cost upwards of £350 per week. :eek:
Nursing home fees start at £650 per week. :eek:

I work in this field and always struggle to justify people using their savings to fund their care when the identical care their less than careful neighbours receives costs them nothing. :rolleyes: What incentive is there to save for one's old age? The only benefit that having savings allows is that it "opens more doors" and can give a wider choice of where you may wish to live and be cared for.:A

pennylane99

how much rent would the house generate though.....

care homes fees here start at around £400 per week

pennylane99

some info...

Your home, your assets, and your care home fees...

http://www.direct.gov.uk/HomeAndCommunity/SocialHousing/CareHomes/CareHomesArticles/fs/en?CONTENT_ID=10031523&chk=W2hEIM

seven-day-weekend

Greyman wrote:

My mother is due to go into a residential accommodation, with a Care package. Currently, she does not pay for her care package, as she is in her own home. The local council expect her to pay for the Care package and she has been advised that she must sell the house to fund the Care package.

1. I understand there may be restrictions on signing the property over to family members, under Government legislation and a tax payment is required?

2. If the house was signed over to family members and it was rented out and the funds generated paid for the Care package, can the Council object to this?

Merry Christmas and a Happy New Year to all,

She doesn't have to sell her house if the income for the fees can be generated in another way (e.g. renting it out, paid out of capital, using an insurance policy, or a combination of things).

Even if it can't, she can't be forced to sell her house, although Social Services will put a charge on it and reclaim the money owing when she dies.

She should not have been told that this was the only option. It isn't.

brummybloke

Bossyboots wrote:

The fact is she has capital to pay for her own care and that is what should be used, rather than expecting the tax payer to pick up the bill.

without wishing to take this off topic, why on earth would tax payers mind an old person who has obviously worked all their lives to be able to afford their own place, the care they need in illness?

i do however mind when someone has not contributed and gets this treatment for free.

good luck OP, why doesnt she try and get a load of credit cards and blow them all to the max on gifts for the family in the form of bonds or something? then when the house is to be sold, the family will get some kind of inheritence ( if that is what the poorly family member was wishing).

Gorgeous_George

If the family wish to avoid paying care home fees (and thereby protect their inheritance) perhaps they ought to let mum live with them in her old age.

However, I find it odd that criminals (including people like Jeffery Archer) get free food and accommodation while our elderly people have to sell their homes.

That said, the taxpayer would be indirectly funding the inheritance of the family members.

It is a difficult subject. The taxpayer cannot afford the answer people want to hear and the other answer causing distress. My vote would be that large hospitals should be provided to house elderly people in care. The cost per person could then be calculated and anyone who goes private could have this as a form of benefit. Obviously, without knowing the numbers it is impossible to know if this is workable.



GG