Mums house, can we rent ourselves or have a licence to occupy?

p00hsticks

Bendy_House said:

Dixy_3 said:

Can any one please help, I am unsure where to go next. My Mum has recently had to go into a care home and is no longer living at her home. She has dementia and I have POA for property and finance, the house is left to me in her will as it was always her wish that me and my wife moved in after her death. I have no siblings. Obviously plan A is not possible at this time, so we are looking for a plan B. I have been told that if we wish to buy the house, we need to pay market value, which is not possible as we are retired and our current property is worth about half the value of Mums. I have been told we are allowed to rent her property out, so long as the money earned is used for her benefit. She is able to pay her care home fees for the next year or 2 from her savings etc, but her earnings are about 25% of the fees, so savings are going down fairly quickly. The problem would be if she lives longer than this, she is 93 and in reasonably good physical health and is very happy where she is, so we don't want to have to move her. I was wondering if we could either rent the house ourselves from mum or we could get a licence to occupy, then sell our own home. The money we get from the sale of our house, would then be used to pay her fees and would obviously save some money as we would only be running 1 house. I have minimised her bills, but there is only so much that can be done. I believe that if we paid rent then this becomes taxable, I am also unsure if we would pay tax on the sale of our property. If we could take out a licence to occupy and then just pay her fees ourselves, maybe avoiding the tax implication to her? If we occupy the house can we take on the bills etc, or does she still have to pay them from her account? I was considering going to see a financial adviser to see what they advise, but wondered if any cleaver people on here have any thoughts or ideas before taking the next step. Thanks in advance.

2) Your mum's house is your mum's house, and is her main asset after her savings. Once her savings run out, she will be expected to (as her POA, 'you' will be expected to) sell her house to release these assets to continue paying for her care. 

HOWEVER, what is the current situation with this? Hasn't/isn't the law changed/changing to protect the cared person's home to a certain value? Have a Google on this. What's the current threshold? And where does your mum's house sit on this in value?

If renting out the property would provide enough income to pay for the care then I don't believe there would necessarily be an expectation that the property should be sold.

As far as the cap on care costs that I think you are referring to goes, then (assuming we are talking England) this isn't scheduled to come into affect until October next year. The cap will be set at £86,000 over a lifetime, but importantly, as I understand it,  this only addresses the costs of the actual care - daily living costs (food, accomodation etc), are not included in the cap. So there would still be (probably quite substantial) costs to be met even after that threshold is reached, until a persons assets are depleted to the point where the Local Authority is expected to step is to provide funding (around £23,000 I think)

https://www.gov.uk/government/consultations/operational-guidance-to-implement-a-lifetime-cap-on-care-costs/operational-guidance-to-implement-a-lifetime-cap-on-care-costs

GDB2222

p00hsticks said:

Bendy_House said:

Dixy_3 said:

Can any one please help, I am unsure where to go next. My Mum has recently had to go into a care home and is no longer living at her home. She has dementia and I have POA for property and finance, the house is left to me in her will as it was always her wish that me and my wife moved in after her death. I have no siblings. Obviously plan A is not possible at this time, so we are looking for a plan B. I have been told that if we wish to buy the house, we need to pay market value, which is not possible as we are retired and our current property is worth about half the value of Mums. I have been told we are allowed to rent her property out, so long as the money earned is used for her benefit. She is able to pay her care home fees for the next year or 2 from her savings etc, but her earnings are about 25% of the fees, so savings are going down fairly quickly. The problem would be if she lives longer than this, she is 93 and in reasonably good physical health and is very happy where she is, so we don't want to have to move her. I was wondering if we could either rent the house ourselves from mum or we could get a licence to occupy, then sell our own home. The money we get from the sale of our house, would then be used to pay her fees and would obviously save some money as we would only be running 1 house. I have minimised her bills, but there is only so much that can be done. I believe that if we paid rent then this becomes taxable, I am also unsure if we would pay tax on the sale of our property. If we could take out a licence to occupy and then just pay her fees ourselves, maybe avoiding the tax implication to her? If we occupy the house can we take on the bills etc, or does she still have to pay them from her account? I was considering going to see a financial adviser to see what they advise, but wondered if any cleaver people on here have any thoughts or ideas before taking the next step. Thanks in advance.

2) Your mum's house is your mum's house, and is her main asset after her savings. Once her savings run out, she will be expected to (as her POA, 'you' will be expected to) sell her house to release these assets to continue paying for her care. 

HOWEVER, what is the current situation with this? Hasn't/isn't the law changed/changing to protect the cared person's home to a certain value? Have a Google on this. What's the current threshold? And where does your mum's house sit on this in value?

If renting out the property would provide enough income to pay for the care then I don't believe there would necessarily be an expectation that the property should be sold.

As far as the cap on care costs that I think you are referring to goes, then (assuming we are talking England) this isn't scheduled to come into affect until October next year. The cap will be set at £86,000 over a lifetime, but importantly, as I understand it,  this only addresses the costs of the actual care - daily living costs (food, accomodation etc), are not included in the cap. So there would still be (probably quite substantial) costs to be met even after that threshold is reached, until a persons assets are depleted to the point where the Local Authority is expected to step is to provide funding (around £23,000 I think)

https://www.gov.uk/government/consultations/operational-guidance-to-implement-a-lifetime-cap-on-care-costs/operational-guidance-to-implement-a-lifetime-cap-on-care-costs

This bit is highly relevant to the OP. if mum is being taken care of in a fairly expensive home:

where the local authority arranges the person’s care or provides financial support, they will meter based on what they are charged by the local authority to contribute towards their care costs, excluding any local authority support. Where the person fully funds and arranges their own care, they will meter based on what the cost would be to the local authority, if it were to meet their eligible care and support needs. This ensures the new system does not unfairly advantage those who can afford to pay more for their care and want to do so to reach the cap quicker.

In other words, the care costs will be notionally recalculated, as if the individual were in a very basic home. 

Dixy_3

Mardle said:

Is your mother getting Attendance Allowance? If not have you tried claiming it for her?

Yes thanks, she has just had increase to the higher rate. I used to work there, so something I did know about.