What to do

peteanspach

My Mother has had to go in to a care home, my dad died two years ago. My mum owns a modest house worth just over £200,000. My sister and I have to sell her house to pay the care home fees of about £2500 per month. If she had no money or about £16000 the state would pay her fees. Mum and dad bought the house late in life to pass it on to my sister and I, it is an ex council house and they bought it. They were paying interest only and there is about £16000 owing.
Is it legal for my mum to sell to my sister and me the house for half it's market value? say £100,000. We could use that to purchase a care plan to pay her fees, and then re_sell the house at market value. I appreciate we would have to pay capital gains tax but that is only 18% at the moment (I think)
I would really appreciate a reply, thanks in advance.

Peter

silvercar

The council will look into recent sales of assets, so I would guess that they will presume that your Mum received market value for the property even if she didn't.

The way round would be for you to fund privately for a private care home and so not be relying on state help. The problem is deciding what you would do when and if the money runs out.

You could look to take an annuity out with the proceeds of the sale (or some of it).

peteanspach

Thanks
She is in a private care home which she is paying for at present. When the money runs out the local authority will pay the bulk of the cost.

poppy10_2

peteanspach wrote: »

When the money runs out the local authority will pay the bulk of the cost.

That will be a very long way away if she has £184,000 equity.