transfered mother in laws house to my wife and sister 15 years ago to avoid future care home costs

Yamor

elsien said:

Have to be honest, I’m struggling to see what other plausible reason there might be for giving your sole property away to your children while you are still living in it. 

The normal reason given is for IHT purposes, but with the GROB rules, even that won't be possible for the family home, unless the parent paid a market rent for continuing to live there.

The only other potential reason would be to keep it from having to go through probate.

elsien

And in the meantime the parent loses all their security plus the  opportunity to downsize.

Grumpy_chap

UnsureAboutthis said:

The 7 year tax rule for CGT 

Is that a mis-type?  Did you mean "IHT" and not "CGT"?

Regardless as it seems in this case the mother gifted her home to the two daughters but continued to live in the home rent free, that would be GWR (gift with reservation of benefit) and therefore the home remains in the mother's Estate for IHT purposes regardless.  (IHT may not be relevant depending upon the size of the Estate and allowances available.)

NedS

Grumpy_chap said:

UnsureAboutthis said:

The 7 year tax rule for CGT 

Is that a mis-type?  Did you mean "IHT" and not "CGT"?

Regardless as it seems in this case the mother gifted her home to the two daughters but continued to live in the home rent free, that would be GWR (gift with reservation of benefit) and therefore the home remains in the mother's Estate for IHT purposes regardless.  (IHT may not be relevant depending upon the size of the Estate and allowances available.)

Plus the two daughters potentially will have a large capital gains tax bill to pay when they sell the property.

Exodi

I'm biting my tongue responding to this.

To be clear, you are posting on a forum, of which the vast majority of members are taxpayers, detailing how your family deliberately hid your MIL's assets with a plan to stitch the taxpayer up with her future care home bill. You're now getting nervous about your scheme, having since liquidated her assets, and are asking for our advice on how you can reliably lump us with the bill to preserve your families inheritance.

Not only would anyone be bonkers to help you, I suspect if this thread was reported it would be closed for breaking forum rules, as many similar ones have been. You can't ask for advice on how to rob banks, you shouldn't expect to get advice on how to rob taxpayers.

People also shouldn't be speculating on how else what the OP has done could be represented to the council. They have explicitly said in the title and the body that it was to avoid future care home costs. The intent could not be clearer, let's not facilitate the creation of a false narrative.

Before someone inevitably likens this to tax avoidance, it's not. Estate planning would be akin to tax avoidance, deprivation of assets would be akin to tax evasion.

I would recommend your wife and her sister don't go off on any extravagant shopping trips just yet, I would expect the council to pick this up and come knocking for the bill (assuming you're happy dumping her in 'over-my-dead-body-ville', of course).

toolateforsums said:

How do i resolve this to understand what is the correct financial situation for my wife/her sister following the proceeds received from the house sale?

Your MIL's money is used to pay for your MIL's care.

Pollycat

This was originally posted on the Benefits board but I asked for it to be moved as benefits are not involved.

MEM62

elsien said:

Have to be honest, I’m struggling to see what other plausible reason there might be for giving your sole property away to your children while you are still living in it. 

I can't see it either. 

In practical terms, what the mother has done is chosen to go into a council run facility, which will be far from the best, rather than use her asset to ensure that her twilight years are spent in a comfort in a place of her choosing.  The original post suggests the motivation being she thought that other tax-payers should fund her care so that her children can have an enhanced inheritance.  That may or may not work out as she intended.        

Newly_retired

Round here there are no council-run care homes. If someone is not self-funding, the council conducts a financial assessment, and puts them wherever the council chooses, which may be at some distance. It may be a home with very basic facilities, possibly one declared “ Inadequate” by the Care Commissioners.
The council pays a fixed fee to the Home, which the fee-paying residents may well subsidise. Naturally, councils make every effort to get residents to be self-funding, using their own means, which may include capital from the sale of their home.  If the resident no longer owns their home, they will look at what happened to it and where the money went. They are likely to expect that money to be used for the resident’s care fees. 

Keep_pedalling

toolateforsums said:

My mother in law was widowed 15 years ago. We felt it was prudent to transfer house ownership to my wife and her sister to avoid any future issues with future care home costs. In November 2025 my MIL was struggling to live on her own so was put into a care home. No chance of her returning to her house I'm afraid, so we have put the house on the market.We have now sold it (not completed yet but about to) but are concerned about the council having a retrospective claim against the sale proceeds to pay for the care costs. How do i resolve this to understand what is the correct financial situation for my wife/her sister following the proceeds received from the house sale? Location is North West England if that makes any difference!

So this wasn’t your MILs idea and you guys were just looking after yourselves rather than what was best for her?

Do you really think relying on a cash strapped LA authority to provide residential is going to be in her best interests?

Sorry, if you think I am being harsh but this does rather make my blood boil. Don’t forget to pay your CGT liability within 60 days of the house sale, and remember that should she die within 7 years of moving out to include her house as part of her estate for IHT purposes.