Inheritance Tax/Care Home Fees/Depravation Assets

Keep_pedalling · 4 July 2018 at 8:29AM

Tom99 wrote: »

Wht can't mum pay the additional rent for the larger property. £100,000 will last 4 or 5 yrs at £500 pm.

That is not an unreasonable solution, although the maths is a long way out as I would hope £6,000 a year would last a lot longer than that, especially as she has undoubtedly got pension income as well.

Needs to be thought out properly though, the rent should be the market rate not just some figure pulled from the air, the rental will be classed as taxable income, and they would have to be compliant with legislation applying to all landlords.

Has any thought been given to alternative solutions like assisted living accommodation or sheltered housing?

Browntoa · 4 July 2018 at 8:29AM

Large cash gifts are subject to tax for 7 years afterwards under TUPE so there's the potential for sudden tax bills.

And it would definitely be DOA to do so anyway.

Keep_pedalling · 4 July 2018 at 8:37AM

Browntoa wrote: »

Large cash gifts are subject to tax for 7 years afterwards under TUPE so there's the potential for sudden tax bills.

And it would definitely be DOA to do so anyway.

TUPE? I though that was about transfer of employees.

There would be no tax implications on an estate this size.

SevenOfNine · 4 July 2018 at 9:01AM

Have you thought about contacting AgeUK on behalf of your mother so she can get additional advice, there's a link here to go with the one from Dox
https://www.ageuk.org.uk/information-advice/care/social-care-and-support-where-to-start/paying-for-care-support/deprivation-of-assets/

I'm not saying they'll advise her on how to avoid care home fees, but perhaps make it crystal clear from their wealth of experience what she/you can & can't do, however logical some of your intentions may seem.

SpideressUK · 4 July 2018 at 9:10AM

SevenOfNine wrote: »

Have you thought about contacting AgeUK on behalf of your mother so she can get additional advice, there's a link here to go with the one from Dox
https://www.ageuk.org.uk/information-advice/care/social-care-and-support-where-to-start/paying-for-care-support/deprivation-of-assets/

I'm not saying they'll advise her on how to avoid care home fees, but perhaps make it crystal clear from their wealth of experience what she/you can & can't do, however logical some of your intentions may seem.

Yes. We have already done that. Their advice is that it is all about "intent". Since our and mum's intent is that she lives with either of us until she dies and tvat at this present time there is no indication at all that she will need a full time care home (in fact she is in better health now than she's been the last 20 years as she has started to thrive again being around active family life and young grandchildren) that the LA would be hard pressed to say we did what we hope to/need to do with her assets from a DOA point if view. However it seems from all that is posted here its a bit "grey" and no legal assurity.

pollypenny · 4 July 2018 at 9:15AM

From what the OP says, it seems as if his mother already needs considerable care and the 'sister-in-law' has young children.

I doubt whether mum moving in is viable for more than a year or two.

SpideressUK · 4 July 2018 at 9:17AM

Keep_pedalling wrote: »

That is not an unreasonable solution, although the maths is a long way out as I would hope £6,000 a year would last a lot longer than that, especially as she has undoubtedly got pension income as well.

Needs to be thought out properly though, the rent should be the market rate not just some figure pulled from the air, the rental will be classed as taxable income, and they would have to be compliant with legislation applying to all landlords.

Has any thought been given to alternative solutions like assisted living accommodation or sheltered housing?

Yes. The plan was for her to move back into the family home and have SS 4 x visits per day which she would pay a contribution to. This was her initial wish and what we've tried to facilitate these past 7 months by clearing/fixing/decorating the house. It is mum's decision now that she no longer wants that. She does not want to be lonely and wants to remain living with family- preferably where she is now as she is around her two very young grandchildren.

SpideressUK · 4 July 2018 at 9:24AM

Browntoa wrote: »

Large cash gifts are subject to tax for 7 years afterwards under TUPE so there's the potential for sudden tax bills.

And it would definitely be DOA to do so anyway.

I'd never heard of TUPE and Google suggests it's an employee thing. When my MIL died we received £20k from her estate and the solicitor told me nothing about having to pay tax on it and no one has written asking for tax and its been 2.5 years since she died.

SpideressUK · 4 July 2018 at 9:27AM

elsien wrote: »

With the dementia, it's not neccessarily about being violent.
It's just incredibly wearing when people repeatedly ask the same questions, get upset when they can't remember things, spend a lot of time searching for whatever it is that they've lost. Their body clock may get out of sync so they're up all night and asleep during the day. The continence issues (my aunt couldn't cope with uncle urinating in the living room when he couldn't find the toilet). The not being able to go out because they're no longer safe to be left or they panic when they can't find you and go looking. Being a paid carer is different because you go home at the end of a shift. When people live with you if they refuse the day centre/respite option then you don't get a break if the rest of the family can't help.

It may well not come to that - many people keep their marbles to the end even as their physical health deteriorates. But it's a conversation you may want to have at some point.
I am full of admiration for those who look after elderly relatives right to the end. I am also realistic about our family dynamics and my own personal tolerances and I've already told parent it's not an option.
As an aside, has mum made a power of attorney for both finances and health/welfare. If not, that's something else that she should consider.

Yes POA for both is made as we knew we would need to help her manage in both areas.

SevenOfNine · 4 July 2018 at 10:05AM

SpideressUK wrote: »

Yes. The plan was for her to move back into the family home and have SS 4 x visits per day which she would pay a contribution to.

Dementia FiL widowed 14 months earlier had own home & £20,500 in bank, had to pay FULL cost of carers 2 x per day via LA, nearly £500 pm until the day he died recently (with £14K in the bank). If mum moves in with family & then sells her home, it's likely she'll have to pay for all 4 carer visits per day herself....not a contribution.

I do know someone who sold her mum's home & built extension on her own property to house her mother. Over the years the rest of the oldie's money was utilised (properly) on her ordinary living expenses. Many years have passed & oldie finally needed nursing care home but LA still fought tooth & nail NOT to contribute a single penny, she died before it was resolved.

If you can find even a partial workable solution of some for care, some for family, some for herself, I don't think it's going to include being 'fair' to both her offspring. Deprivation pitfalls all over the place I fear OP.

Her LA already know she's a candidate for a care home at some stage, they'll keep their beady eye on her finances for sure.

Inheritance Tax/Care Home Fees/Depravation Assets

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