parents gift

MikMikandThriceMik

No their last pennies, wouldn't consider it if that were the case but please explain more about that last sentence?
Thank you.

enthusiasticsaver

Gifts are free of IHT if your parents live 7 years after the gift. If their estate is liable to IHT (£650k for a couple) then the IHT is paid from estate on a sliding scale depending on whether they die in year 1 or year 6 and so on.

If your parents gift you cash in their last few years and then need to claim for care costs if they need to go into a home and no longer have the money to pay for it then this can be called deprivation of assets and this may be reclaimed or more likely refusal of benefits to pay care costs. Depends on their situation.

sourcrates

On the other hand, if they were to withdraw the money and "spend" it on say, a box of matches each, and you and your brother are match sellers, then apart from those matches been very expensive, no one would be any the wiser.

Malthusian

sourcrates wrote: »

On the other hand, if they were to withdraw the money and "spend" it on say, a box of matches each, and you and your brother are match sellers, then apart from those matches been very expensive, no one would be any the wiser.

No, the difference between the market value of the matches and what they actually "spent" on them would be considered deliberate deprivation.

However, the parents aren't deliberately trying to get rid of their money in order to claim benefits so this is all academic.

OP: if your parents gave you money in order to reduce their assets below the £23,250 limit (in England and NI), under which the council becomes responsible for their care, the council would assess them as if they still had the money, and could refuse to pay for their care. While they could "chase you" for money they have no power to make you actually pay for someone else's care, but whether you would leave your elderly and vulnerable parents to be left on the street or dumped on the NHS (I'm not actually sure what happens if an elderly person needs care but no-one including the council will pay) is another matter. Furthermore none of this matters if your parents are happy to spend their capital in order to receive a higher standard of care home than the council would provide.

Contrary to what some people think, the deliberate deprivation rules do not mean people can't spend or give away their money. Nothing you have posted gives any indication that the gifts would be assessed as deliberate deprivation.