Can we still gift £3000 per year if parent in care home

angiec_2

Before my mum was diagnosed with dementia she would gift £3000 per year between her 3 children. Mum is now in a care home and her house has been sold to cover the fees. We have power of attorney over her finances. Can we still "gift" the £3000 per year as Mum had been doing or will this be seen as deprivation of assets? 

lisyloo

If she was doing it before then it should be fine.
personally I would keep records.
If she's sold her home then it will likely be quite a while before she needs to fall back on the local authority.

If you think she might live a long time you could look at buying an annuity. This pays care fees as long as she lives for a lump sum i.e.an insurance policy.

Don't mean to be harsh but the average length of time in a care home is 26 months as most people are frail when they enter one. There is a range though with outliers being between a few days and 20 years.

I did look at an annuity for my MIL but I'm glad we didn't get one as she died (hastened by COVID).

I would consider it if she is otherwise quite healthy. It's like life insurance in reverse. It's a gamble on which (of course) the insurance companies win on average.

Albermarle

angiec_2 said:

Before my mum was diagnosed with dementia she would gift £3000 per year between her 3 children. Mum is now in a care home and her house has been sold to cover the fees. We have power of attorney over her finances. Can we still "gift" the £3000 per year as Mum had been doing or will this be seen as deprivation of assets? 

You are maybe mixing up two issues?
IHT liability and Deprivation of assets.
Different rules apply in each case.

For IHT, the gift allowance of £3000 is only of any relevance if your Mum's estate was big enough to likely to be liable for IHT. Is this the case ?

For Deprivation of assets, the local authority will view most gifts negatively. There is no specific allowance, and rules can vary from LA to LA and from case to case. However they are only ever interested if you ask them to fund your Mums care. Whilst you/she are funding the care privately they are not interested in her finances.

Keep_pedalling

The answer depends on if she has sufficient capital to fund her care for the foreseeable future or not. As she has established a pattern of making this level of annual giving, then you can carry on doing so unless it will impact her ability to carry on funding her care in the near future.

So if you are sitting on £500k of her money there should be no problem with carrying on, if it’s £80k then you may find yourself in difficulty with deliberate deprivation of assets once the money runs out.