Can my dad buy my sister a new kitchen without implications

le_loup

POPPYOSCAR wrote: »

Yes I am quite happy for my taxes to pay for care in old age.

So would I but that is not the current situation therefor my comment holds.

N1AK

POPPYOSCAR wrote: »

If he had spent this money during his lifetime on drink, cigarettes wild women etc.or even just a nice holiday each year and not saved it how is that fair?

Then go campaign to have people who are 'wasteful with money' or 'lazy and don't earn' enough excluded from access to old age care, so they can pay for their earlier mistake by freezing to death or whatever...

Your father and his peers apparently voted for a state pension, state provided care, and state provided healthcare for all, it seems a bit rich for you to be on here complaining about it now it didn't, and doesn't, take a genius to work out it would need paying for.

AgentSquirrel

The argument over who is entitled to what in old age and how they spend their money is irrelevant and not helping the OP. We all pay for each other in some way - that's a fair society. For example, I have no intention to have kids but i still pay through my taxes for schools and healthcare for other people's and am not bothered by that. Also remember that if this property is rented, the alternative is the landlord paying for it which he will claim back in tax relief anyway! (Btw - if it is rented I'd hassle the landlord first! Don't let your Dad pay for what is the landlord's responsibility). Apologies for any assumptions I might have made but I just wanted to show another angle to the who-pays-for-what argument to show that no one is trying to cheat anyone here!

Anyway, back to the actual question. I'm sorry but I'm not sure about the benefits side of things but Saga says this:

You don’t want your children to face an unexpected inheritance tax bill because of money you’ve handed over during your lifetime.

However, each of us has an annual inheritance tax gift allowance. This enables you to give some money away each year to your children without needing to worry about this tax. The annual allowance for 2014/15 is £3,000 per person.

I can't post a link at the moment but if you google 'Saga gifting money to children' you'll see the page.

My understanding is that a parent can gift up to £3000 to their children (in total) per year. So if your Dad bought your sister a kitchen this year then he cannot give anything further to yourself or any other siblings until the next financial year begins. The link above us for tax year 14/15 but it is probably broadly the same for 15/16.

Hope that helps!

le_loup

AgentSquirrel wrote: »

However, each of us has an annual inheritance tax gift allowance. This enables you to give some money away each year to your children without needing to worry about this tax. The annual allowance for 2014/15 is £3,000 per person.[/I]
Hope that helps!

It doesn't.
You are referring to Inheritance Tax not Deprivation od Assets.
Two different things.

JohnRo

AgentSquirrel wrote: »

My understanding is that a parent can gift up to £3000 to their children (in total) per year. So if your Dad bought your sister a kitchen this year then he cannot give anything further to yourself or any other siblings until the next financial year begins. The link above us for tax year 14/15 but it is probably broadly the same for 15/16.
Hope that helps!

Anyone can gift any amount, any time to another individual. The tax complications only arise around gifts to financial entities and when a benefactor dies within seven years of making a gift and their estate including the gifts made within the prior seven year period exceed the IHT nil rate.

The other complication as mentioned is if the benefactor later becomes subject to means testing. Likewise the recipient, if already means tested, will have to observe the rules.

Deprivation of asset rules are as clear as mud.

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf

The only time this would be likely to cause a problem is if the father handed over (say) £3K in cash for the daughter to then spend on a new kitchen. If that affects the means testing thresholds then it becomes a problem, if not then it doesn't matter.
If he just provides a new kitchen then, with landlord approval, I fail to see how it's anyone else's business, above excepted.