Family Home and Care Home fees

Keep_pedalling

unholyangel wrote: »

You may be better getting professional advice as deprivation of assets is not a simple straightforward answer.

It depends on circumstances. For example your health starting to fail coupled with a real possibility of requiring future care and giving the only real asset of value to avoid (or reduce) care home fees versus giving it away when you're in good health, no real prospect of requiring care, significant other assets etc.

Of course, none of that stops the LA from trying to claim deprivation of assets. But imo thats usually because they hire people who can take a simple 2+2 and come up with an answer of 113. A common mistake we've all made is assuming that because someone does something for a living, that they're actually any good at it.

I can’t think of another valid reason apart from reducing IHT and that would also need the former owner to pay full market rent as well.

Keep_pedalling

themaverick1953 wrote: »

She has recently gone into a care home. The transfer took place 5 or so years ago.

Sounds like duff info from the solicitor.

Can I turn back the clock and transfer it back to avoid CGT?

CGT would only be payable if the property has risen in value over £12,000 in those 5 years after selling costs.

themaverick1953

Hospital diagnosed Delirium but I feel a Dementia diagnosis cant be far away.

Linton

themaverick1953 wrote: »

She has recently gone into a care home. The transfer took place 5 or so years ago.

Sounds like duff info from the solicitor.

Can I turn back the clock and transfer it back to avoid CGT?

If you give it back to "a connected person" you will be liable for CGT based on the full market price difference over the past 5 years. Also I believe it could add other problems. It does not undo the original gift so if your mother dies in the next 7 years the house will appear twice in your mother's estate, both as the original gift and as currently owned property. Whether this matters depends on her total estate and to whom she bequeaths the house. In addition the house will appear in your estate for the next 7 years as a gift you made.

unholyangel

Keep_pedalling wrote: »

I can’t think of another valid reason apart from reducing IHT and that would also need the former owner to pay full market rent as well.

Who said anything about needing a valid reason? They could have gave it away because they believe it to be haunted and it wouldn't make it deprivation of assets - its whether their intent was to avoid/reduce care home fees.

Similar to when you're married, you can give away whatever you want and even make yourself completely destitute. But do that during divorce proceedings and you're on a sticky wicket.

Keep_pedalling

unholyangel wrote: »

Who said anything about needing a valid reason? They could have gave it away because they believe it to be haunted and it wouldn't make it deprivation of assets - its whether their intent was to avoid/reduce care home fees.

Similar to when you're married, you can give away whatever you want and even make yourself completely destitute. But do that during divorce proceedings and you're on a sticky wicket.

Because without a valid reason it is deliberate deprivation of assets, and you have no way to fend off the LA if you are daft enough to want to put your care in their hands entirely.

Yes you are free to give your assets away to whoever you like, but there may be consequences of doing that, one of being the rest of us are not going to pay your care costs if you do.

Gavin83

Gavin83 wrote: »

Why did she transfer it to you?

Care to answer this OP?

themaverick1953 wrote: »

She's had no contact with social services as yet. She went straight from independent living to a home.

OK so what's the situation? If social services haven't been involved who managed the placement and how is it being paid for? I'm assuming the house isn't being used so does she have significant savings too?

unholyangel

Keep_pedalling wrote: »

Because without a valid reason it is deliberate deprivation of assets, and you have no way to fend off the LA if you are daft enough to want to put your care in their hands entirely.

Yes you are free to give your assets away to whoever you like, but there may be consequences of doing that, one of being the rest of us are not going to pay your care costs if you do.

The council took the view that this was deliberate deprivation of capital under the CRAG rules, which state that gifts to family can be treated as deprivation of capital if they are made with the intention of reducing the amount the person is charged for their care.

<snip>

The Ombudsman's office has now issued its findings. It decided that North Yorks took its actions without ever completing a full financial assessment, simply assuming without cause that the gifts were deliberate deprivation of capital. Moreover, its calculations on the amount of deprived capital were not backed up by any evidence, and it did not properly take into account the proven fact that there was already a pattern of gifting before Mrs Y went into the care home, with no evidence of any haste to dispose of her assets.Although the amount of the gifts increased after she went into care, the council did not provide any other evidence to show why it had decided the gifts were made with the intention of avoiding care charges.

From step

In order to prove that deliberate deprivation has taken place the LA will need to show that avoiding the charge was a significant motivation. This can be illustrated by reference to the timing of the gift and whether the resident had, at that time, a reasonable expectation that they may require LA assistance to meet care costs in the future.

From a solicitors website

Its not that there needs to be a valid reason (what would determine whats a valid reason anyway?). Its that the reason (whether full or part) can't be to avoid/reduce care home fees.

As I said though, none of that stops the LA trying to claim its deprivation (as shown by my first quotation/link).

troubleinparadise

Does your Mother have large amounts of cash assets she can call on to fund her care home fees?

If she has entered care without the involvement of SS and funding from the LA, she will need to meet those fees from cash funds herself. If for some reason she needs LA funding they will look back into your Mother’s finances to see where her assets lie, or have gone, before offering funding.

I trust the solicitor who handled the legal aspects of this “gift” ensured your mother knew what she was signing away, the risks involved for her regarding the roof over her head, and that she could afford to give away such a large asset.

Was she paying you rent, presuming this was a gift without reservation if the intent was to reduce IHT, not just ringfence a property from the risk of using it to fund care fees in later years?

OP, It seems as though you don’t really know much about paying care fees etc. Age UK has lots of good information you’d do well to read up on.

Alternatively, you could pay the fees, or give her the care she needs yourself.