giving money to family

st

my dad 84 in hospital and my mother alzhimers also in hospital at 85.
my dad wants to transfer his savings over to my sister,brother and myself .
He rents his home and has below the inheritance tax level.

Can he transfer his savings to us without any tax effects-problems etc

or are there limits?

margaretclare

What amounts of money are we talking here?

How is he going to transfer his savings to 3 of you, and how is he going to do it from his hospital bed?

Margaret

st

we are not sure how much but at least 100,000 as far as transfer my sisiter can do also we have probate too.
As far as after hospital he will probably now have to go into a care home.

seven-day-weekend

If he transfers the money to you and then is liable for care home fees, it will still be classed as his money.

exil

Often wonder how that works. If your parents give you the money , and you spend it, (or indeed if they spend it themselves) it's difficult to see how the authorities can sue you or the parents for the fees. Being deemed to have the money doesn't mean you actually have any - blood from a stone. Anyone ever actually had this happen to them?

missile

I wonder how they would find out, if he gives away the money and closes bank account?

Not sure if they can get at the money if he puts it in a trust fund to benefit you on his death.

st

thats my view if transfers money as gift to the us 3 and nephew then closes account what can authorities do as money gone.

martinpike

Unless it's all done via cash, which seems unlikely with £100k, it's all traceable.

Whilst I accept the blood from a stone argument, I assume you all have at least some assets? Cars, homes etc?

Personally, I wouldn't wish to go into bat against the government on this one!

BTW, I am not making any assertions as to the rights and wrongs. It's a complex moral issue and I have mixed feelings on it.

Paul_Herring

thats my view if transfers money as gift to the us 3 and nephew then closes account what can authorities do as money gone.

He'll be treated as if he still has it for assessment purposes.

Unfair as it may seem to you, he's not allowed to deprive himself of his wealth simply to provide 'an inheritance' to his kin at the expense of the state who'll end up paying the subsequent care home fees as a result.

What the local council will actually do to recover the money, I'm not sure.

seven-day-weekend

I think that if he deprives himself of his assets in order to get state-funded care home bills, it is actually classed as benefit fraud.

Paul_Herring

seven-day-weekend wrote:

I think that if he deprives himself of his assets in order to get state-funded care home bills, it is actually classed as benefit fraud.

No it's not.

Found this http://www.thompsons.law.co.uk/ltext/local-authority-care-fees.htm - which should address my last comment aswell

TL wrote:

To give away assets, whether it is your savings or your home, in order to qualify for any benefit, is termed “deliberate deprivation”. If the local authority believes that you have deliberately deprived yourself of money, you will be treated for the purposes of the means test as if you still have it.

There are no time limits governing when someone can be regarded as having deprived her / himself of capital in order to avoid or diminish her / his residential care fees

If you give capital away less than 6 months before entering a home or while you are in a home, then section 21 of the Health, Social Services and Social Security Adjudication Act 1983 allows the local authority to claim the cost of care from the person you gave it to.

If you cannot pay the fees, when the arrears have reached £750 the local authority may be able to apply to court, to have you made bankrupt. It is possible that some transactions (such as a gift of property) made in the 5 years before the bankruptcy, could be set aside. This means that the assets transferred are treated as still being owned by you. There is no time limit for setting aside a gift, if the intention is to put it out of a creditor’s reach.