Protecting House from fees/tax

Goggleboxer

I am worried about losing my house to possible care fees/tax later in life and want to explore options to protect it. I have heard of one method where I set up a company which buys my house for a nominal amount with myself and wife and offspring as directors. The house would belong to the company and therefore "safe".

This sounds a bit complicated but does it even work?? Would there be annual costs of having a company that does essentially does nothing?

greenglide

If your wife is still living in the property then there is no requirement to sell the house to fund care.

It is just you that is considered at risk? Is there any real reason or is this just a general concern?

xylophone

http://www.expertwillwriter.com/care-home-fees.html
http://www.farleydwek.com/mitigating-social-care-costs/
http://www.ageuk.org.uk/home-and-care/care-homes/paying-for-permanent-residential-care/

might be worth a look?

atush

the house will be safe for your wife and yourself as it can't be sold while one of you is alive and living there.

As for passing it on, it is your house and your money. Which should be spent on good quality care should you or your wife need it. As care homes that the council pay 100% for are not the sort of care homes you would want to be in or would want your wife to be in.

If you want to leave something to your children, give it to them now before you are old enough to need care.

But most people dont go into a care home.

Eric_the_half_a_bee

atush wrote: »

But most people dont go into a care home.

Should we find it comforting that we are unlikely to need care? Or worrying that we'll probably keel over before we do need care?

Your_Hero

You do not need to worry if your spouse is still living in the home if you were to go into care, or vice versa.

A problem may arise where the spouse living at home dies first while you are in care. Obviously you could give your home away to your children and continue to live in it (but beware this is not effective for IHT, since it is a gift with reservation, and also may be seen as deprivation of assets for care purposes).

In cases where it is not possible or you don't want to gift the home away, you should look at changing the you own your home to "tenants in common" (as opposed to joint tenancy) if it is not already, and update your Will. This means that you each own a defined share (usually equal) of the property and upon first death does not automatically go to the surviving spouse but to anyone you wish (e.g. your children, or a trust).

The worst case scenario would be for you to be assessed as owning only half the share in the property to pay for care fees.