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Inheritance Advice

Thug

Distinguished Member
My father is 86 (in April) and actually fit and healthy.
However, his legs/knees aren't.
He has had a few falls lately and 3 days ago pressed his emergency button (which rings my sister and me) and i went round and found him on the floor where he couldn't get back up again.
My sister is his carer and has been looking around at nursing homes for him and each and every one has said to her 'if he has any money tell him to get rid of it before he comes in'.
I don't have any experience in regards to inheritance, but do appreciate that you can give so much before having to pay any tax.

I am not sure what my question is, but just looking for advice of anyone who has gone through similar lately.
 

Tempest

Distinguished Member
Just to note:

"Regarding care home fees, a local authority can investigate if it believes the money has been gifted deliberately to avoid having to pay care home fees when it carries out its means-testing assessment.

Under UK law, your local authority could claw the cash back in order to pay care home fees if the gifts were made within six months of one of your parents entering care."
 

nheather

Distinguished Member
There are several aspects.

The inheritance threshold varies depending on who you are giving it to. If to your children then it is £475k. Otherwise it is £325k. But this is per partner, so the last surviving parent can give twice that amount.

You can pass on a home before you die, and it can be worth more than the threshold and providing you live for another 7 years then there is no inheritance tax.

You can also gift £3000 per year to close relatives and that is excluded from any calculations.

I suspect the reason the care homes are giving the advice is that the council can put a claim on a house to pay towards care. They don’t usually force sale until the person passes on. But with care homes running at £1000 per week or more that can amount to a large figure that the council grabs from the estate. That is worse than any inheritance tax.

As @Tempest says, a council may have the power to say that your father is diverting money to avoid paying for a care home. Unfortunately this is a little late to be thinking about this.

Cheers,

Nigel
 
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bjd

Distinguished Member
I have absolutely no legal or financial training, but my rather simplistic understanding us that your father would be liable to cover the cost of his care using any savings he has and selling his house. I think if he sold the house and gave the capital raised by the sale and his savings to you and his sister, the money would be safe from any claim for care costs. AFAIK, the first £350,000 is exempt from Inheritance tax. Anything above that becomes liable for IT if your father dies within seven years of making the bequest. It is also a good idea to make the bequest at least a year before entering care.
As I said, that is only what I have gleaned from talking to a few people in similar situations. The legal and financial realities could well be very different. Might be worth spending half an hour with your solicitor.
 

John7

Well-known Member
Have a good read here.....


Inheritance tax is not relevant in this case as noted above as gifting money/assets prior to entering a nursing home may be deemed to be disposal of assets to avoid fees.

I’m surprised the nursing homes even suggested this!
 

Tempest

Distinguished Member
As mentioned above I don't believe for one moment you'd avoid care home costs by selling off the home and giving money away just before you move in.
They would be well aware of such obvious avoidance methods, and sure they'd pursue and recoup the money when they are doing their assessments.
This is the reason that, if you have parents which will agree to it, which I'm guessing most won't
Is to sign over property etc to children many years before such things happen.
 

ChuckMountain

Distinguished Member
I have absolutely no legal or financial training, but my rather simplistic understanding us that your father would be liable to cover the cost of his care using any savings he has and selling his house. I think if he sold the house and gave the capital raised by the sale and his savings to you and his sister, the money would be safe from any claim for care costs.
But you will give some random wrong thoughts on the matter :(

While I am sure that you had good intentions that is deprivation of assets

 

bjd

Distinguished Member
My limited understanding is that the longer you leave it between transferring your assets and entering care, the more difficult it becomes for the council to prove "deprivation of assets",, as they call it. I suppose it could vary from council to council how vigorously these things are pursued.
 

Tempest

Distinguished Member
If your sister lives in the home and she's 60+ then the home will be safe.

Info here about when a property will/may be disregarded when it comes ttime to do the assessment.
This is the important stuff:

 

bjd

Distinguished Member
But you will give some random wrong thoughts on the matter :(

While I am sure that you had good intentions that is deprivation of assets

I notice you didn't quote the last sentence of my post: "Might be worth spending half an hour with your solicitor."
Oh, and nice to meet you. Are you always this friendly? :smashin:
 

ChuckMountain

Distinguished Member
My limited understanding is that the longer you leave it between transferring your assets and entering care, the more difficult it becomes for the council to prove "deprivation of assets",, as they call it. I suppose it could vary from council to council how vigorously these things are pursued.
Yes that helps but the fact they are looking round nursing homes would imply it is already a bit late :(
 

ChuckMountain

Distinguished Member
Oh, and nice to meet you. Are you always this friendly? :smashin:
Always :D

I have absolutely no legal or financial training, but my rather simplistic understanding
It was this bit that had me as it came across like the equivalent of getting advice from the bloke down the pub but I take your point about the solicitor. Not meaning to offend but your IHT thing misses some important bits out :(
 

bjd

Distinguished Member
I thought I made it clear I was just the bloke down the pub?
 

MrSossidge

Distinguished Member
You sahyyour sister has been looking, at nursing homes. What does your father say? Does he want to go into one?
 

shotokan101

Distinguished Member

Thug

Distinguished Member
Thanks everyone so far for your input, it has given me a lot to read.

I’m surprised the nursing homes even suggested this!
They were just the women who work there that said it.
They said that it annoys them the fact that 2 people in opposite rooms getting the same care, one who has not done a thing all their life gets it all for nothing, where the other who has worked all their life and saved has to pay.

If your sister lives in the home and she's 60+ then the home will be safe.
My sister is (almost) 56 and doesn't live with him.
However, the house belongs to my brother who bought it for our father a few years ago when he had trouble with the stairs in his old house, the money of which (when he sold it) was banked.

You say your sister has been looking, at nursing homes. What does your father say? Does he want to go into one?
I don't think anyone 'wants' to go in a nursing home and it is a last resort, however even my father knows that there may be a time when he has to if he cant do basic things like go to the toilet unaided.

At the moment he is in hospital 'rest bite' where they are trying to find the cause of his fall and think it may be due to a water infection. Although his knees and feet are shot he could (prior to this fall) get around on his frame.
 

MrSossidge

Distinguished Member
Thanks everyone so far for your input, it has given me a lot to read.


They were just the women who work there that said it.
They said that it annoys them the fact that 2 people in opposite rooms getting the same care, one who has not done a thing all their life gets it all for nothing, where the other who has worked all their life and saved has to pay.


My sister is (almost) 56 and doesn't live with him.
However, the house belongs to my brother who bought it for our father a few years ago when he had trouble with the stairs in his old house, the money of which (when he sold it) was banked.


I don't think anyone 'wants' to go in a nursing home and it is a last resort, however even my father knows that there may be a time when he has to if he cant do basic things like go to the toilet unaided.

At the moment he is in hospital 'rest bite' where they are trying to find the cause of his fall and think it may be due to a water infection. Although his knees and feet are shot he could (prior to this fall) get around on his frame.
Care can be provided in a home environment. 2/3/4 times a day as required. This is a cheaper alternative to a residential home. Resi homes are 800 to 1000 week in a lot of cases.

Urine infections are common in elderly and are quite debilitating.

Is he in hospital or has he left hospital and gone into respite. Respite is usually a stay in a care home for a week or two before returning home.

If he's still in hospital then there should be a social work team who may become involved if it is thought that he may need assistance to return home.
 

Mo Better Blues

Distinguished Member
You have muddied the waters quite a bit with snippets of info here and there.

Are you asking about Inheritance Tax thresholds etc, I suspect not.
So therefore you are asking about the cost of a possible move into care for your father.

1. Is your father's name on the deeds of the house where he lives?
2. What is the sum total of your fathers assets, cash in the bank, stocks and shares, bonds as so on?

If your father has a total in excess of approx £23,500 in cash and assets then he will be required to fund his own care costs until the amount drops below this figure, only then will the council complete a financial assessment. They will not be interested until this amount is reached.

Once reached the council will require proof of every penny of monthly income from whatever source, be it pensions etc. They will also want proof of his monthly expenses.
Basically the council will then deduct one from the other giving a net monthly income.
That amount will then be used to help fund the care home costs.
So if for instance the care home was £4000 per month and your father's income is £1000 per month, your father pays £1000 and the council fund the balance.

Things to be aware of, councils have legal teams to ensure that there has been no 'deliberate deprivation' to avoid care home costs.
Any attempt to 'give away' money or assets will result in court action.
They will take the matter to court and they will win.
Do not fall for any legal service offering ways to avoid these cost by way of 'trust funds' etc.
They will tell you it is a legal and fool proof way to 'protect' what he has.
Ask them for a legally binding guarantee that they will refund all their fees in the event you end up in court, you'll never hear from them again.

The only way to avoid these costs are to plan years in advance which does not apply to your father as his need is seemingly urgent.

This is a direct quote from Age UK;
So is there a way of avoiding care home costs? Sadly not.
 

nheather

Distinguished Member
If he's still in hospital then there should be a social work team who may become involved if it is thought that he may need assistance to return home.
Although when my father took ill, he was taken to hospital where his situation got worsened to the point that it was clear that he needed a care home, the hospital became quite aggressive in trying to get him out even though no care home place was available. You are right there was a team on his side and my advice is to stand your grand, don’t accept discharge until a care home has been arranged. The hospital will become quite aggressive because they want the bed (and I sympathise) but you have to look after your own so stand your ground.

Even when they found a place and he was discharged, he wasn’t in a fit condition, he had pleurisy which couldn’t be cleared fully so the care home ended up sending him to hospital at least once a month.

Cheers,

Nigel
 
As talked about above i dont believe this is an inheritance tax issue its a deliberate deprivation of assets issue.

You have to plan many many years in advance to be able to do anything about this
 

Thug

Distinguished Member
As I said at the beginning I don’t know what my question is.
What I do know is that the money is my fathers to do as he pleases.
If it makes his final years more enjoyable then that’s great.
I think he may prefer home help, my sister already offers this but only several times per week where he could do with several times per day.
He was transferred from hospital to rest bite last night and to also assess his mobility.
For all I know his collapse could be from a water infection and he may be fine again after treatment.
I would estimate (and it is a total guess) he may have around £200,000 (sale of his house, plus savings, plus money from when his 2 sisters died).
 

Mo Better Blues

Distinguished Member
Use the CQC website to evaluate home help/care options.
 

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