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  • FIRST POST
    • SpideressUK
    • By SpideressUK 3rd Jul 18, 8:22 PM
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    SpideressUK
    Inheritance Tax/Care Home Fees/Depravation Assets
    • #1
    • 3rd Jul 18, 8:22 PM
    Inheritance Tax/Care Home Fees/Depravation Assets 3rd Jul 18 at 8:22 PM
    Possibly not the exact correct forum but was the nearest that seemed relevant. My mum is still alive (age 74) but wants to sell her house and live with a family member (initially my brother and his family) as she needs help with cooking, dressing etc. Can anyone tell me if she is allowed to gift a large chunk of the house sale (100K between two children) to her children (keeping 20K or so for herself) and have the children "safe" from a potential future care home point of view?


    I have read that inheritance tax starts at 325K and mum has no where near that so presumably there is no inheritance tax. Her intent is to live with a family member (and that is our intent for her) until her death. Our concern is what if her health needs become too great a year or two from now whereby she needs hoists etc and night-time assistance etc so has to go into a care home. Would the care home be saying that she has "depravation" of her assets from gifting the 100k bulk of the sale from the house to her children?


    In order for it to be feasible for one of the children and their family to have her with them they need that 50K to be able to clear debts (costing 500 pm in min interest payment) so that they can then rent/buy a much larger living facility which will allow them their "space" and mum her own "space" within the building.
Page 3
    • SpideressUK
    • By SpideressUK 4th Jul 18, 12:53 PM
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    SpideressUK
    Shared ownership is pretty much what it says on the tin. She would not be purchasing the entire flat, but sharing ownership with a local housing association. Your mum's 60K will be buying only a proportion of the property (25%, 50% or 75%), housing assoc own the rest, hence it's called 'shared ownership' (& I don't mean the communal areas, I mean her actual flat).

    You should know that mum will be paying rent for the proportion of her flat that the housing association will own, though there is usually the opportunity to purchase a bit more of a percentage along the way, but not at what was the current purchase price, if the property increases in value she'll have to pay that.

    My brother has a shared ownership, he owns 50%, never got round to purchasing more of it & now can't afford to, still paying rent & always will be unless he buys the other half!
    Originally posted by SevenOfNine
    Ah...so if she did that and died in 5 years and her 60k bit had increased in value the estate would just get 60k? Presumably her rent could go up year by year?
    • Brynsam
    • By Brynsam 4th Jul 18, 1:50 PM
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    Brynsam
    Maybe it's time to get some proper advice, based on a full understanding of all the circumstances? 'Free' advice on this sort of forum can cost you dear!
    • SpideressUK
    • By SpideressUK 4th Jul 18, 2:17 PM
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    SpideressUK
    Maybe it's time to get some proper advice, based on a full understanding of all the circumstances? 'Free' advice on this sort of forum can cost you dear!
    Originally posted by Brynsam
    Yes, we are doing. We have found a solicitor who specialises in "care" things but it's via forums such as this we get the wealth of information/opinion/optiond we need to be armed with to take to a solicitor before they start charging their 200+ per hour.
    • Keep pedalling
    • By Keep pedalling 4th Jul 18, 2:34 PM
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    Keep pedalling
    If she sells the house, home visits will be need to be self funded, due to the level of saving she will then have.
    • margaretclare
    • By margaretclare 4th Jul 18, 2:36 PM
    • 10,174 Posts
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    margaretclare
    Her main issues seem to be the diabetes and lymphodema. She has permsnently ulcerated legs. Her feet and legs are always swollen to twice their size. She may have a heart issue as her breathing is bad...she cant walk far without getting out if breath. She needs help dressing/undressing due to the physical immobility. She can do her own toileting though and get clothes up/down for that.

    She struggles to stand from a low seat but can "tip" to stand so tbe bed is high and she "tips to stand" and uses walking frame to get to same floor level toilet. Then using walking frame or furniture "falls" back to sit.
    Originally posted by SpideressUK

    Thanks for the clarification. I feel very sorry for her. And from my perspective (83) she is no age yet.



    How does she control her diabetes - is she insulin-dependent?



    I watch my DH cope with his Type II on a daily basis and I am thankful it hasn't happened to me (yet). He really is constantly battling with it, never letting it take over his life, keeping control without losing his sense of humour or will to live.



    Does Mum have district nurse visits to treat her ulcerated legs? This is something I used to do in the distant past in my career.
    r ic wisdom funde, r wear ic eald.
    Before I found wisdom, I became old.
    • SpideressUK
    • By SpideressUK 4th Jul 18, 3:29 PM
    • 146 Posts
    • 70 Thanks
    SpideressUK
    Thanks for the clarification. I feel very sorry for her. And from my perspective (83) she is no age yet.



    How does she control her diabetes - is she insulin-dependent?



    I watch my DH cope with his Type II on a daily basis and I am thankful it hasn't happened to me (yet). He really is constantly battling with it, never letting it take over his life, keeping control without losing his sense of humour or will to live.



    Does Mum have district nurse visits to treat her ulcerated legs? This is something I used to do in the distant past in my career.
    Originally posted by margaretclare

    Yes, insulin dependent and quite a high dose as her readings have never been stable/under contol. That is part of the reason for the hospital stay when dad died. He died nexpectedly and suddenly and lay dead on the front room floor for 8 hours whilst the police did their thing and an undertaker finally turned up (in spite of a prepaid funeral plan). No one knew how much insulin mum needed injecting or even where it/needles were kept as dad did all that prep for her. I called 911 but the paramedic had no idea what insulin either so gave a medium dose, she'd not eaten for 15 hours or so and was showing signs of "not good". She had food but by the time the undertaker finally came she needed blue light to hospital as there was not enough insulin in her and she was near coma.

    The district nurse comes for the legs but often missed her out due to workload. At times my dad was duct taping her sodden dressings to her legs from them being days/weeks overdue from changing.

    If she lives with family we now know how to prepare the insulin and she injects herself. If she lives alone a nurse will come 3 times a day for her insulin prep and a set amount of time for the compression leg bandaging.
    • SpideressUK
    • By SpideressUK 4th Jul 18, 5:31 PM
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    SpideressUK
    Another thing I thought - am I correct thinking mum can gift 3,000 per year (is that per tax year?) either wholly to my brother or on a 1,500 to each of us basis without any question of DOA am I correct in this? That could potentially give my brother 250 a month which pays half his 500 pm "minimum interest debt payment and this would all be completely above board and free from the DOA question? Also she can add 2 years allowance together and in effect have 6k this year to do that with?


    Is it 3k overall? Or 3k per child per annum with double that allowance the 1st year?
    • Mojisola
    • By Mojisola 4th Jul 18, 5:42 PM
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    Mojisola
    Another thing I thought - am I correct thinking mum can gift 3,000 per year (is that per tax year?) either wholly to my brother or on a 1,500 to each of us basis without any question of DOA am I correct in this?
    Originally posted by SpideressUK
    No. It's an inheritance tax regulation.
    • margaretclare
    • By margaretclare 4th Jul 18, 6:02 PM
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    margaretclare
    Yes, insulin dependent and quite a high dose as her readings have never been stable/under contol. That is part of the reason for the hospital stay when dad died. He died nexpectedly and suddenly and lay dead on the front room floor for 8 hours whilst the police did their thing and an undertaker finally turned up (in spite of a prepaid funeral plan). No one knew how much insulin mum needed injecting or even where it/needles were kept as dad did all that prep for her. I called 911 but the paramedic had no idea what insulin either so gave a medium dose, she'd not eaten for 15 hours or so and was showing signs of "not good". She had food but by the time the undertaker finally came she needed blue light to hospital as there was not enough insulin in her and she was near coma.

    The district nurse comes for the legs but often missed her out due to workload. At times my dad was duct taping her sodden dressings to her legs from them being days/weeks overdue from changing.

    If she lives with family we now know how to prepare the insulin and she injects herself. If she lives alone a nurse will come 3 times a day for her insulin prep and a set amount of time for the compression leg bandaging.
    Originally posted by SpideressUK

    If you need any info on diabetes management let me know. DH is very clued-up about it and reads, goes on any of the days/study groups etc around. He tailors his insulin to the carbs that he eats, and if he eats less carbs then he needs less insulin, otherwise the risk is that he goes 'hypo'. It sounds to me as if, when your mum had not eaten for a very long time, she needed not insulin but glucose. Most paramedics can do a finger-stab blood test (what DH does a few times a day) and can give glucose if the blood-sugar is too low. Half a can of coke does the same thing.


    I assume your mum is on Attendance Allowance, which will all help with costs. If she's not, she should be.
    r ic wisdom funde, r wear ic eald.
    Before I found wisdom, I became old.
    • SpideressUK
    • By SpideressUK 4th Jul 18, 6:30 PM
    • 146 Posts
    • 70 Thanks
    SpideressUK
    If you need any info on diabetes management let me know. DH is very clued-up about it and reads, goes on any of the days/study groups etc around. He tailors his insulin to the carbs that he eats, and if he eats less carbs then he needs less insulin, otherwise the risk is that he goes 'hypo'. It sounds to me as if, when your mum had not eaten for a very long time, she needed not insulin but glucose. Most paramedics can do a finger-stab blood test (what DH does a few times a day) and can give glucose if the blood-sugar is too low. Half a can of coke does the same thing.


    I assume your mum is on Attendance Allowance, which will all help with costs. If she's not, she should be.
    Originally posted by margaretclare
    Yes she is on AA its part of the overall 800 pm ish she gets from pension and the like but my brother just takes all of that for her cost of living care so it's not totslly free to go to increased rent on bigger property hence why he needs to shed the 500 pm payment on his debt so the extra rent money is there.

    It sounds like the 3k she is allowed to gift and not counted for IHT purposes (which we don't have anyway since the estate is under 325k still comes under potential DOA too.

    Solicitor said 2020 care fee system might be changing so keep an eye on it

    Ty for diabetes info help offer.
    • Cheeky_Monkey
    • By Cheeky_Monkey 4th Jul 18, 6:36 PM
    • 1,876 Posts
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    Cheeky_Monkey
    How many bedrooms does your mum's house have?

    Could your brother and his family go and live with her in her house?
    I used to be indecisive - now I'm not so sure
    • SpideressUK
    • By SpideressUK 4th Jul 18, 7:14 PM
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    SpideressUK
    How many bedrooms does your mum's house have?

    Could your brother and his family go and live with her in her house?
    Originally posted by Cheeky_Monkey
    That was our first consideration but mum's house is even smaller than his current rented house. There are potentially 3 bedrooms but mum will have the only living room converted into "her room" with commode/bed/ tv etc so no living space for my brother and hus family. That is aside from the fsct hus jib is down South and mum's house is 5+ hrs North of him.
    • Mojisola
    • By Mojisola 4th Jul 18, 8:53 PM
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    Mojisola
    Mum has already lived with one child for 7 months now

    For the past 7 months she has been paying Council Tax, Insurance etc on a house she is not living in
    Originally posted by SpideressUK
    Yes she is on AA its part of the overall 800 pm ish she gets from pension and the like but my brother just takes all of that for her cost of living care
    Originally posted by SpideressUK
    For seven months, she's been paying 800 a month to your brother and paying out to keep up her old home?

    I can understand her not wanting to cost your brother anything but he takes all her income rather than her just pay her share of the household bills - I'm shocked.
    • SpideressUK
    • By SpideressUK 4th Jul 18, 10:21 PM
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    SpideressUK
    For seven months, she's been paying 800 a month to your brother and paying out to keep up her old home?

    I can understand her not wanting to cost your brother anything but he takes all her income rather than her just pay her share of the household bills - I'm shocked.
    Originally posted by Mojisola
    Yes, I was a little surprised too but since it was to be short term and it was our only real option and best for her mental health wise I let it go.
    • troubleinparadise
    • By troubleinparadise 4th Jul 18, 11:05 PM
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    troubleinparadise
    This is going to sound harsh, but reading all this it sounds like your poor Mum is regarded as a cash cow to sort out the family!s debts....
    • SpideressUK
    • By SpideressUK 5th Jul 18, 12:16 AM
    • 146 Posts
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    SpideressUK
    This is going to sound harsh, but reading all this it sounds like your poor Mum is regarded as a cash cow to sort out the family!s debts....
    Originally posted by troubleinparadise
    Not from my point of view, if I get an inheritance upon her death great, if not then so be it. My priority is to try to make her final years as happy and family centred as possible.
    • elsien
    • By elsien 5th Jul 18, 7:52 AM
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    elsien
    This is going to sound harsh, but reading all this it sounds like your poor Mum is regarded as a cash cow to sort out the family!s debts....
    Originally posted by troubleinparadise
    I don't think the OP personally is coming across like that at all now they've explained a bit more. I do have reservations though about mum's income being used to cover brother's debt. Is she going to continue to hand all her money I over in the future - that doesn't feel right at all. However if she has capacity and is fully aware of the implications that is her decision to make. The difficulty comes if she ever feels it is unfair but then due to the decisions made is unable to speak up/change her mind.
    Has she considered renting out her house instead of selling up? If she has POA she could potentially delegate being a landlord to one of the family to save herself the stress. (You'd need to check that out properly.) It does keep some options open rather than selling which is irrevocable.
    Last edited by elsien; 05-07-2018 at 8:01 AM.
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
    • SevenOfNine
    • By SevenOfNine 5th Jul 18, 8:35 AM
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    SevenOfNine
    Ah...so if she did that and died in 5 years and her 60k bit had increased in value the estate would just get 60k? Presumably her rent could go up year by year?
    Originally posted by SpideressUK
    No, if the flat increases in value then the estate would get whatever they were able to sell the portion of flat for, in 5 years that could be more, less, the same - depends on the housing market.

    Not sure about the rent but I'd be mega surprised if it didn't go up year on year, though there may be some sort of increase % 'fix'?

    If she decides at any point to purchase a larger proportion of the flat, she will pay whatever the market value is at the current time.

    She will be maintaining it, new kitchen, bathroom, boiler/heating, decorating etc all improvements done at her expense. May add value, but then if she wants to purchase a larger portion it will cost her more because of all her improvements! (My brother with his 50% shared ownership has added a lot of value with home improvements. That & the climb in house prices where he lives means now can't afford to purchase more of the housing associations 50% share).

    Ordinarily IMO shared ownerships are favoured by those who want to get on the housing ownership ladder, but can't afford a 'whole' property.

    I'm afraid I'm with mojisola on the "I'm shocked" front. Your brother strips your mum of her entire monthly income 800, and she also pays for the upkeep of her own property.

    Be mindful that this already looks like deprivation of assets (your brother is asset stripping the mother to pay his bills IMO), the LA will take one look at her past & present income/expenditure & know something fishy has been going on, they will dig deep into this.
    Seen it all, done it all, can't remember most of it.
    • Browntoa
    • By Browntoa 5th Jul 18, 8:42 AM
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    Browntoa
    TUPE? I though that was about transfer of employees.

    There would be no tax implications on an estate this size.
    Originally posted by Keep pedalling
    Auto correct changed Taper to TUPE .......not spotted when I posted ...


    And council looking at DOA would look at her bank statements etc , some of what's going on here on her outgoings is not likely to pass scrutiny
    Last edited by Browntoa; 05-07-2018 at 8:45 AM.
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    • Cheeky_Monkey
    • By Cheeky_Monkey 5th Jul 18, 10:52 AM
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    Cheeky_Monkey
    I'm afraid I'm with mojisola on the "I'm shocked" front. Your brother strips your mum of her entire monthly income 800, and she also pays for the upkeep of her own property.

    Be mindful that this already looks like deprivation of assets (your brother is asset stripping the mother to pay his bills IMO), the LA will take one look at her past & present income/expenditure & know something fishy has been going on, they will dig deep into this.
    Originally posted by SevenOfNine
    Me too! He sounds like a really loving son ................. NOT
    I used to be indecisive - now I'm not so sure
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