Parents House and Care Fees

TheJP

Hello all,

My parents are really concerned that should they need care from the state in the future their home (which is all they have to pass on to their 4 children) will be used to pay for it and this makes them a bit uneasy, they believe as they have paid into the 'system' all their lives they are owed care should they need it.

They sought legal advice and a solicitor has advised to put the house into the 4 children's names (all adults) and said that we may have to pay capital gains tax. I'm a bit uneasy about this as me and my older brother currently own our own properties, would we be liable for additional SDLT? My younger brother doesn't own a property but would lose his FTB status and my sister just sold her house but is in rented accommodation, would she have to pay anything additional?

I've also done some research and from experience in this forum that it doesn't matter what route you take to deprive assets, the state can come after the value of what you owned previously with no time limit.

Has anyone got any experience on this so i can at least calm my parents before they do something impactful?

FYI parents live in N.I and house is worth around £130k

thanks

TheJP

gettingtheresometime

Unfortunately, the way that the country funds the care system and your parents' views are at odds with each other.

Personally, I take the view that I have to live somewhere and that has a cost.

Not only do they have to consider the deprivation of assets angle, ask them if they'd be happy to be placed anywhere and then ask them if they'd like to be separated because perhaps one's needs are greater than the other's.

Also, would your sister lose any benefits as she would have 1/4 of (presumably) a valuable asset?

TheJP

gettingtheresometime said:

Unfortunately, the way that the country funds the care system and your parents' views are at odds with each other.

Personally, I take the view that I have to live somewhere and that has a cost.

Not only do they have to consider the deprivation of assets angle, ask them if they'd be happy to be placed anywhere and then ask them if they'd like to be separated because perhaps one's needs are greater than the other's.

Also, would your sister lose any benefits as she would have 1/4 of (presumably) a valuable asset?

Unfortunately my auntie has put their house in their children's names and said they are 1 year away from the 7 year limit, my research says there is no limit. My parents are easily swung by misinformation. Their intentions are pure but not always the right one.

She wants to buy again soon with her other half which would mean she would be liable for 3% SDLT

elsien

 
1. There are many many people who never need to go into care. 
2. Money gives choices. Including the more expensive care home which is the one that you prefer.
3. Money gives the opportunity to buy in extra services such as someone to support you with community access where the care home does not do that as a matter of course. 
4. Giving your house to your children loses you all your security and leaves you vulnerable to:
    a) falling out with them and them selling the house from under you
    b) they get divorced or go bankrupt and what was your house is now theirs so it a marital asset. It has to sold to realise it as an asset to pay what they owe.
    c) they need to claim means tested benefits but can't do so because what was your house counts as an asset which means that your children cannot make a claim and need to sell your house to live on the money. 
5. There is no time limit on deliberate deprivation of assets when it comes to care home fees. The 7 year rule does not apply if the intention of giving the asset away is purely to avoid paying care fees in the future.

Is that enough to be going on with? 

Mojisola

TheJP said:

Unfortunately my auntie has put their house in their children's names and said they are 1 year away from the 7 year limit

There is no time limit when it comes to care costs assessments and, assuming that your aunt has continued to live in the house, the 7 year rule applying to inheritance tax won't apply either because your aunt has continued to benefit from the 'gift'.

youth_leader

Your parents might be reassured to know that if only one of them has to go into a home, the remaining partner can stay in the family home.   

There is also a bill planned for October 2023, which will cap the 'care' part of costs at £85K.  Living costs of approximately £20K will still have to be paid,  but hopefully met from the remainder of the savings/pensions.  

macman

TheJP said:

gettingtheresometime said:

Unfortunately, the way that the country funds the care system and your parents' views are at odds with each other.

Personally, I take the view that I have to live somewhere and that has a cost.

Not only do they have to consider the deprivation of assets angle, ask them if they'd be happy to be placed anywhere and then ask them if they'd like to be separated because perhaps one's needs are greater than the other's.

Also, would your sister lose any benefits as she would have 1/4 of (presumably) a valuable asset?

Unfortunately my auntie has put their house in their children's names and said they are 1 year away from the 7 year limit, my research says there is no limit. My parents are easily swung by misinformation. Their intentions are pure but not always the right one.

She wants to buy again soon with her other half which would mean she would be liable for 3% SDLT

The 7 year rule has nothing to do with deprivation of assets: it applies to gifting with the intention of reducing IHT. Who on earth gave her that bad advice?
If anything happens to the children, she could be homeless, as she has no rights to occupy the property except as permitted by her children. She is effectively just a guest.

elsien

youth_leader said:

Your parents might be reassured to know that if only one of them has to go into a home, the remaining partner can stay in the family home.   

There is also a bill planned for October 2023, which will cap the 'care' part of costs at £85K.  Living costs of approximately £20K will still have to be paid,  but hopefully met from the remainder of the savings/pensions.  

My money is on either that being delayed or the figures moving upwards, particularly the “hotel” costs which are unrealistic as things stand. 

Keep_pedalling

They have received very poor advice, giving you home away is nearly always a terrible decision. This could be disastrous for them if any of the children pre-deceased them, go bankrupt or  are involved in a divorce. 

A better option is for them to split the joint tenancy so that they can leave their individual shares to their children and provide the surviving spouse with a life interest. This avoids the issue of CGT and any of the children loosing their FTB status. As has already been said the house is disregarded while one of them is still using it as their main residence, so this would protect at least half the value of the house unless both needed residential care at the same time which is very unlikely.

theoretica

I think if my parents put their home into my name I would put it back into theirs.

tooldle

My mum is in a care home. Current fee is just over £42k per annum. For context, flip the situation on its head and ask how much these parents have ‘paid in’ over the years. For the majority of people the answer to that question is, not much, as the majority receive more than they contribute. Assuming your folks have not covered their own costs, how do they feel about expecting others to pay for them?

With an asset of 130K, plus whatever other savings and pensions they have, these people are not in genuine need of assistance.