Gifting to avoid IT and deprivation of assets

steve1748

My wife has Parkinson's (diagnosed almost 3 years ago). It is quite possible that at some point in the future she may need care (we are both in our 70's.)
For the last few years we have been gifting £3000 to our siblings to avoid them possibly having to pay inheritance tax.
I have spoken to two national "help" organisation's to ask if this could be considered deprivation of assets and have two conflicting answers.
Would appreciate some help/guidance.

tacpot12

If you were gfiting the money and there was no prospect of you needing care, you and your wife are ok because your purpose was not to avoid paying for care. But now that there is the prospect of needing care, anything you give away now might well be counted as still being yours.

Albermarle

The inheritance tax rules around gifting are very clear. Some ( many?) assume similar rules apply when it comes to deprivation of assets issues but they do not. It seems to be more of a grey area and open to interpretation. Compounded by the fact that different local authorities could well take a different view in different situations. Plus you can add in that many local authorities are overstretched, and their finance departments can be not the best organised.

Presumably you will have to detail your regular gifts when you fill in the forms and then you will have to see what comes back, if anything.

Keep_pedalling

Your siblings won’t pay inheritance tax your estate will if it is big enough. Assuming you have no children then your combined IHT exemptions are £650k so if your estate is in IHT territory the an annual gift of £3k is not going to be considered DoA

Albermarle

Keep_pedalling said:

Your siblings won’t pay inheritance tax your estate will if it is big enough. Assuming you have no children then your combined IHT exemptions are £650k so if your estate is in IHT territory the an annual gift of £3k is not going to be considered DoA

Good point, if they have plenty of assets and are worried about IHT, then they are going to have to pay for care, regardless of how many £3K gifts they have made.

Keep_pedalling

One thing I would add is that if you net worth puts you into IHT territory then one of the bests things you can do is to spend more on yourselves while you can, I can’t see the point of building up substantial savings only for someone else to benefit from all of it.

elsien

If you have enough money left to self fund after you’ve gifted what you have, then deprivation of assets is not an issue.

If you don’t, then it may well be. Part of the deprivation of assets test is the intention to deliberately deprive yourself so as to avoid paying care home fees. So giving money away one knowing that there is a fair chance she might need her could potentially fall into that even if your ostensible reason is around inheritance tax. There isn’t a definitive answer, it depends on the situation at the time. So you won’t get a clear yes or no either way. But it is something you need to be aware of.

diystarter7

elsien said:

If you have enough money left to self fund after you’ve gifted what you have, then deprivation of assets is not an issue.

If you don’t, then it may well be. Part of the deprivation of assets test is the intention to deliberately deprive yourself so as to avoid paying care home fees. So giving money away one knowing that there is a fair chance she might need her could potentially fall into that even if your ostensible reason is around inheritance tax. There isn’t a definitive answer, it depends on the situation at the time. So you won’t get a clear yes or no either way. But it is something you need to be aware of.

Hi OP

Please check what is meant by, "enough money  to self-fund" as care home fees vary vastly and no one knows how long one will be in there.  

The more knowledge you have, the better position you will be in but I fear there is no concrete answer but there is a lot that gets you close to a good, solid answer. However, Timing is a good factor to consider.



I've known people that specialised in care home assessments that included financial assessments but this was years ago
and I recall talking about almost every case is different to varying degrees. 

I very strongly recommend you give these people a call to seek guidance and be in a better position about what is what - link below appears good. Also consider calling the duty CM at social services to seek information and advice as they should know as millions worry about this kind of thing.

https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/


Take care and have a nice weekend

elsien

I’m just going to repeat what I’ve said before. Financial assessment departments are separate to the departments carrying out the care act assessments. And social workers do not give out advice about finances. They signpost to sources of information such as age UK which you can find for yourself.
In my area the local authority is so overworked that you often can’t get through to the duty team, and there is no chance that any care manager will be having conversations with random callers about deprivation of assets.

Obviously if you wish to contact them to ask then it can’t hurt. But don’t expect to have the in-depth  sort of conversations that diystarter7  keeps saying that people will be able to have. It may have been like that some years ago. It isn’t now. 

I’m not going to be responding to any more of Diystarters  posts on this thread as I don’t want to derail it. 

diystarter7

elsien said:

I’m just going to repeat what I’ve said before. Financial assessment departments are separate to the departments carrying out the care act assessments. And social workers do not give out advice about finances. They signpost to sources of information such as age UK which you can find for yourself.
In my area the local authority is so overworked that you often can’t get through to the duty team, and there is no chance that any care manager will be having conversations with random callers about deprivation of assets.

Obviously if you wish to contact them to ask then it can’t hurt. But don’t expect to have the in-depth  sort of conversations that diystarter7  keeps saying that people will be able to have. It may have been like that some years ago. It isn’t now. 

I’m not going to be responding to any more of Diystarters  posts on this thread as I don’t want to derail it. 

Hi


The highlighted bit

My post is clear and talks about 'Care Mangers' and Age Concern link and suggests the
OP may wish to seek 'guidance '  directions from them as they deal with things like
this and Care Managers do give guidance to financial assessments, IE a good idea of what is what.
The OP had two conflicting answers. Therefore, seeking help from people/organisations that deal with this kind of thing may enlighten further anyone in this situation.

It does not hurt anyone to consider any other options to seek help/guidance
and this situation is very complex and at times as OP has proved, even those people that deal with this kind of thing, two different people can give " two conflicting answers"

OP, as I said its a complex situation one facing millions and the like I initially posted along with the new one may help

A quick Goggle  search resulted in the link below  - it details info the basics what is looked at etc and has links to information etc - all of which along with other info may give you a better idea of what is  and what is not considered for the financial assessment to take place once the CM has taken info,

The link is very informative guidance and from a council. Use in conjunction with the one above and decide if you need to ring AgeConcern like details/talks about deprivation of assets or the council for more guidance



https://www.merton.gov.uk/social-care/adult-social-care/financial-assessment/paying-for-care#:~:text=A care manager or social,which will probably be less.



Good luck, OP and do let us know if there is anything that can help others in a similar situation as to yours.