Parents sold house - how do they give us the funds

LaLaH

My in-laws have had to move in with us into a larger house my husband and I bought with a hefty mortgage as my father in law has advanced dementia and my mother in law wasn't able to cope anymore. Since buying this new property my in-laws have sold their house and the proceeds of sale have been sitting in their bank account. My father in law has carers come in daily to help my mother in law as myself and my husband still have to work full time, but because of the amount of money in the bank account, they can't claim anything towards the cost of this care and any respite care for when my mother in law needs a break from looking after him. My in-laws would like to be able to give us a large sum to pay down our mortgage as the only reason we've got such a large mortgage is because we needed a bigger house to be able to have them live with us. I'm concerned that if my father in law has to go into full time residential care we'd be stung for his care costs and have to pay back the money they gave to pay down part of our mortgage. Is there a way of being able to pay a lump off the mortgage without having implications to us further down the line?

Comms69

There would be no implications for you.


But it's clearly deprivation of assets so there will be implications down the line for them.


(there may be inheritance tax to pay also if things go that way in the near future)

getmore4less

They can probably replace accommodation reducing capital, but that would require them to buy part of your house which will be a problem with a mortgage.

Not all lenders will allow that.

need_an_answer

Your parents in law may have left it too late to gift the money to you without it being seen as a deprivation of assets.

They can still gift a small amount annually to relations but I wonder if when their finances are assessed for care needs it will be flagged if a large amount suddenly leaves their accounts.

Cold comfort but there is tiered levels of savings that will be taken into account when apportioning care paid for by the council etc.


Sympathies..I've been there....

xylophone

I am wondering whether the arrangement for the parents to live in your property could be covered tax free up to at least what they would pay under the "rent a room" scheme (up to £7,500 a year)?

https://www.moneyadviceservice.org.uk/en/articles/rent-a-room-scheme-how-it-works-and-tax-rules

https://www.accountingweb.co.uk/any-answers/should-rent-a-room-relief-include-rent-from-adult-son

Other than that, the money from the house sale should be equally divided between the parents and held in their individual accounts.

You do not say how much money is involved but the "temporary high balance" protection only lasts for six months.

Apart from that, they are likely to be earning a pittance in interest if this money is in a current account.

Presumably either your spouse or your MIL holds PoA for your FIL.

See https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs40_deprivation_of_assets_in_social_care_fcs.pdf

See also https://www.nhs.uk/conditions/social-care-and-support-guide/money-work-and-benefits/nhs-continuing-healthcare/

Has your FiL been assessed?

Your parents-in-law cannot simply give away money with the intention of avoiding care home fees as this will be accounted as deprivation of capital.

edgex

Do the parents live within the home, or do they have a 'granny flat' with their own entrance?
Are there grandchildren, other children?

Cash_Cow

Its very sad the way the state interferes in such matters. IHT is a given and we have the 7 year rule for that but if parents are moving in with children based on needs of care and family bonds and the children thus having to get a bigger house surely the Council shouldn't be sniffing around later with their hands out? Hopefully the issue is diminished with time?

I find it quite repulsive personally, which is strong but there we go!

00ec25

Cash_Cow wrote: »

Its very sad the way the state interferes in such matters. IHT is a given and we have the 7 year rule for that but if parents are moving in with children based on needs of care and family bonds and the children thus having to get a bigger house surely the Council shouldn't be sniffing around later with their hands out? Hopefully the issue is diminished with time?

I find it quite repulsive personally, which is strong but there we go!

your understanding of how society works is a laugh

why should I, a taxpayer, foot the bill for someone who sells their major asset and deliberately gives their money to their children in an attempt to then say they are poverty stricken and need the state to pay for them. That is the repulsive idea.

Enterprise_1701C

00ec25 wrote: »

your understanding of how society works is a laugh

why should I, a taxpayer, foot the bill for someone who sells their major asset and deliberately gives their money to their children in an attempt to then say they are poverty stricken and need the state to pay for them. That is the repulsive idea.

They sold that asset because they moved in with the previous generation. They should be able to pay the part of the mortgage that the kids had to take on in order to provide that accommodation. It is similar to going into care.

Cash_Cow

Taking care of old people who have paid tax all their lives is 'repulsive'? Or is it maybe the way society has changed to make this form of elderly care a capitalistic chargeable item that is repulsive?

Telling people what they can and can not do with their own home (and beyond IHT) is a step too far in my book. Maybe you are too young to remember a time when this wasn't a thing. Didn't exist. That was also the time when we could also afford a policeman in every village... We were poorer then too!

I wont ding dong here as its off topic but I remember a better time... But its all about the money now and extracting it by all and any means.

Sea_Shell

There is an upside. When/if needed your parents will be able to afford some of the best care available.

In the meantime, surely they are able to contribute monthly to the household for living expenses, without it being deemed DoA??

How much per month would be acceptable, that's the question??