"renting" house out for free

da_rule

The only issue will be if she requires more expensive care at a later date and cannot afford to fund it. If she is in relatively good health and very unlikely to run out of money in the next 7 years then it might be worth selling the property as the council and IHT liability can only go back 7 years.

Mojisola

da_rule wrote: »

The only issue will be if she requires more expensive care at a later date and cannot afford to fund it. If she is in relatively good health and very unlikely to run out of money in the next 7 years then it might be worth selling the property as the council and IHT liability can only go back 7 years.

The 7 year rule is to do with inheritance tax.

The council can go back further.

da_rule

Regarding the above this article is quite interesting: http://www.thisismoney.co.uk/money/experts/article-2384774/Are-parents-avoiding-care-home-fees-gifting-45-000.html

It sets out that a council can only go back beyond 6 months of someone entering council funded care if it thinks that the assets have been disposed of specifically to avoid liability for the care. As we could be talking years down the line (take the 7 year IHT rule) it would be very hard for a council to prove that the person knew that in 7 years time they would run out of money (especially if they kept a majority of the proceeds of sale).

xylophone

Might it be easier to set up a rental agreement but for the rent to be very low but reviewable at set intervals?

https://www.gov.uk/renting-out-a-property/landlord-responsibilities