Help!

Sidboi21

Hold on now this has been taken the wrong way. All i want to know is can he buy things for children etc? Nothing to do with paying rent. He will have to pay full rent regardless if he sells the house or not.

Mojisola

Sidboi21 said:

Hold on now this has been taken the wrong way. All i want to know is can he buy things for children etc? Nothing to do with paying rent. He will have to pay full rent regardless if he sells the house or not.

By the time he has given away £20k to each of his children, his capital will be much reduced.  If he reaches the point where he needs any kind of means tested help, it will be refused as he will be assessed as still having that money.

maman

I went back to your original post where you asked what  if your dad was to sell his house for £100K and give each of his 4 children £20K . Putting aside any moral judgements, we've tried to explain that if he needed to go into care in the future and said he couldn't afford to pay he'd be in trouble because he'd given £80 000 away. He has money for his old age but he's choosing to give it away. 

Examples were posted of minor spends (like a simple holiday rather than a world cruise) that he could treat the family to or money he could legitimately spend on himself.

It's hard to know how else to explain the risks of giving money away as an elderly (I assume because he's going into social housing) person.

It would help if you gave an idea of why he's moving out of his home. Does he need care? Is the house too much for him to manage? Is it too big and, if so, why doesn't he downsize? All these answers  could potentially  point to him needing further care soon and help explain the reason for hanging on to his funds. 

RAS

Sidboi21 said:

Hold on now this has been taken the wrong way. All i want to know is can he buy things for children etc? Nothing to do with paying rent. He will have to pay full rent regardless if he sells the house or not.

Basically, no.

He is expected to use the money to support himself.  And because he hasn't divorced mum, there's a risk she could lose or have to repay the housing benefit she's received. There will be an assumption that she gets half of the house price and uses that to pay her rent in future. Based on other threads, it might take a year or two for the benefits to catch on but if your parents have sold a joint property expect questions as to why she's not received the anticipated sum and for her benefits to be frozen. 

They really need a proper financial settlement sorted out to protect them both, which could take into account the previous lump sum he paid her. 

As before, if he receives any means-tested benefits, reasonable expenses that directly benefit dad are allowed. If in future he needs care, any large payments that benefit anyone else may lead to questions. If he doesn't need care for the next decade or two, it might be ignored, but if it's recent there will be questions.

Certainly the form I had to fill in asked if my parent had ever owned a property and what happened, and we were only doing it in case funding was needed between her moving in to care and the house selling.

Sidboi21

Hello

Back again.

So my father is selling his home that is a joint owned by him and his wife. My mother moved out several years ago but they never divorced and get on better now separated living there seperate live.

Anyway the house has sold and the proceedings will go to my father. Am i right in saying he can transfer any amount to her account as they are exempt from inheritance tax because they are still married? 

RAS

No.

Inheritance tax is irrelevant as the value of  your father's assets is below the IHT limit.

If your mother is the joint owner (IS SHE?), she is entitled to half the money, assuming that they don't have a deed of trust making the share different.

However, your father needs serious legal advice. If your mother then decides to divorce him, she could get half of his share as well, on top of the redundancy money he's already given her.

And she'll need to report anything she gets from your father to the benefits authority immediately

TBagpuss

Sidboi21 said:

My mother doesn't want any of the house sale as she received a cash payment many years ago. So if she has to have half then yes by all means she will be liable for all rent payments which is absolutely fine.

I am obviously new to all this and have come to the forum for advice. The advice has been great and obviously when fraud is mentioned that is certainly not the case and I want to make sure everything is legal.

Lets say the house is sold and the proceedings are split 50k each either one of them cant for example buy a car for their children, purchase a family holiday any sort of gift for that matter over 3k?

So what can they spend their money on? 

If your parents separated but didn't divorce then they could consider divorcing now, and having a formal financial order now which would allow them to transfer the house to your dad and to record that mum had previously received capital in respect of her interest in it.

It would probably also be possible to split the capital unequally if your dad cleared a mortgage or otherwise paid more after they separated. 

 Alternatively it may make sense for them to go for Judicial Separation which would enable them to preserve any widows/widowers benefits either of them may be eligible for under the other's pensions. 

the issue with deprivation of capital is that if it appears that they have disposed of funds in order to get / retain eligibility for benefits then they can be treated as though they still had the funds.

It doesn't mean that they can't give gifts Just that they should not be disposing of all or large amounts of their assets when they still need them to meet their own housing or other costs.

So, if your Dad had £50K from the sale of the house and chose to give £1,000 to each child, leaving himself with the bulk of the money to pay his own rent etc that's likely to be fine. 

If he gave away £40K then tried to claim benefits then it's likely he would be turned down.