Care home fees - council funding after self funding runs out

DontvoteTory

Hi, hopefully this is the right place to post this. 
My father received a dementia diagnosis at the end of 2023. For a couple of years prior to this he gifted me the maximum amount of tax free gift (£3k). Once his ability to self fund has run out and he gets down to the £24k minimum, is this tax free gift able to be claimed by the council as avoiding care home fees? (I understand the council will run up a bill to claim on his half of the property he and my mum own eventually).
My thoughts are that if it is legal to gift the tax free amount and as it occurred before his dementia diagnosis, then it isn't something they can claim was done to avoid care home fees. Does anyone have any experience of this? Thanks in advance.

Keep_pedalling

Highly unlikely. The £3000 is an annual exemption it is not an allowance or a maximum limit and is only relevant to for the purposes of IHT. As this was prior to his diagnosis it should not be classes as deprivation of assets so you have no reason to be concerned. 

Brie

I think it helps if he was giving you this previously as being from his "excess" money.  So he might have previously received £20k a year in pension income but only needed £17k so the £3k going to you would be excess to his needs.  

Newly_retired

The £3000 annual gift rule is relevant for IHT purposes only.
The LA will do a financial assessment. If the value of the house is substantial, my guess is that they will put a charge on it rather than looking at recent outgoings as Deprivation of Assets. DofA is supposed to be deliberate, so if the gifting only began in recent years, it might be seen as such. There is no limit to the number of years the LA can go back. I don’t think there is a definitive answer here.

elsien

There are no definitive answers because it’s based on individual circumstances. The local authority would have to show that the money was given away to avoid care home fees and that it was  reasonably foreseeable  that a care home would be needed in the future. So based on all health needs not just cognitive impairment.
But if at the time your dad was comparatively fit and healthy, had no reason to believe he would need care, and he hasn’t given all his assets away, It’s much less likely to be an issue. 

https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs40_deprivation_of_assets_in_social_care_fcs.pdf

Exodi

Keep_pedalling said:

Highly unlikely. The £3000 is an annual exemption it is not an allowance or a maximum limit and is only relevant to for the purposes of IHT. As this was prior to his diagnosis it should not be classes as deprivation of assets so you have no reason to be concerned. 

As you say the £3k exemption is not relevant in this context (as I'm sure everyone in care-homes might start making generous annual 'gifts' if that was the case).

Regarding the latter part of your comment, is it as cut and dry as this without knowing the background?

A diagnosis is just a confirmation of a condition, it doesn't mark the date it started (though I guess in some official contexts it might). You can have a person with early signs of dementia living independently for several years. The council or those more cynical among us may find it quite convenient or at the very least suspicious that the dad 'gifted [the OP] the maximum amount of tax free gift' 'For a couple of years prior' to the formal diagnosis. Especially as it sounds like the estate is likely to run out of money to fund the care.