Person going into care home thinks they have avoided selling their house to pay fees?

I think 7 years must elapse before the house is no longer considered for care home fees. I also think there were some new rules whereby the people in whose name the house was put must pay rent to the previous owner and show that they have paid rent. No, this is a widespread misapprehension. What you are talking about is removing the house from liability for inheritance tax. It has absolutely no relevance to care home fees. There is no time limit on how far back the LA can go in assessing deprivation of assets.

I do think it is unfair when nearly all of a house's value can be taken to pay for care fees. I think it would be much fairer if every property over a certain value was liable for a small percentage to be be paid into a government account ring-fenced exclusively for care fees. Political football. This has been suggested, as was a scheme where everyone of retirement age paid into insurance for care. One was labelled “death tax” and kicked out, the other “dementia tax” and kicked out.

@Daisychainreactions See above. What you’re talking about is IHT. It doesn’t apply to care.

I'd be fully in favour of that but which party would dare suggest it. Quickest way to electoral annihilation.

God the misinformation on this thread.
They don’t put a bloody charge on the house if a spouse or dependant adult live there.
It is completely disregarded.
Get your facts right before commenting.

The way round that is increase inheritance tax for everyone, not take everything from a random sample of 1 in 5 (those needing care) and leave everyone else untouched.

Someone mentioned the other day that their care fees were capped at 22.5 per cent of their house value. So one country makes it work

The property is disregarded if a partner lives there. It doesn’t form part of the financial assessment.

Thank you for your support...
Fortunately we worked with social services so when Mum's half a million pounds is gone she'll be able to stay there.. she's physically well so she could be in her secure dementia unit for a long time...
Out Dad died after a very long illness and we were very sad but we are all devastated by what is happening to our wonderful Mum.. knowing how safe and well cared for she is has softened me and my siblings 'loss' of our inheritance..
I'm not surprised tho by a lot of these comments..not many made by people who 'deprived' themselves of assets and regret it or indeed any on adult children who've spent their parents money and now realise the care those parents are getting..
It's easy to say 'I'd never pay that' ..'I want my kids to inherit ' etc ..but when you're actually faced with it...well.. it's very different...

The property isn't disregarded but it doesn't have to be sold. The LA will put a "charge" onto the deeds of a property which is owned by someone receiving care home accommodation but where the house is still occupied by a partner. Nothing happens until the surviving partner dies or requires care themselves, or the property is sold. By co-owning with a member of the next generation the charge could be deferred for longer - interest would accrue but usually the interest rate is less than house price inflation - but would still be due eventually.

I thought the property was disregarded if a partner lived there? So it might not be the fact that the son bows owns it that means it's 'safe' but because the partner legitimately lives there?

Some care homes are run on a basis that if you have been self-funding for a specified minimum duration, then they guarantee not to turf you out if the money runs out even if they would normally require higher fees and don't accept "new" residents without topup. My grandmother chose a place to move into when the time came specifically for that important feature.

But what happens if you sell your house to pay for a care home and the money runs out ? at 7k a month, if a person stays there for 3 years that's £252k, so when the money has gone who pays that 7k a month or are you moved to a council run care home ?

You will be subject to funding rules. LA will pay what it will pay. Care home accepts it, the family makes up the difference or you find somewhere cheaper.

As we worked with social services a place was found in a home where she can stay when her half a million has gone..she has Alzheimer's but is physically well...so that will only last 6 years ish...if we'd found the home by ourselves she'd have been asked to leave..

I didn't discuss the tax implications with them. They just told me that they had set up a trust with both their DC being the trustees.

The house remains within the estate for iht in this case (gift with reservation), but of course it's still potentially useful if the main object is to get assets to DC early (assuming tax implications are fully understood).

If you settle assets on a lifetime trust, then you no longer own that asset and the land registry should be updated. If you provide for a will trust of the house, that trust doesn't come into effect until the will comes into effect (i.e. death of the testator). So it depends on approach. The tax consequences will generally be quite different between those two examples.

*allowance, not threshold

I think in the case I refer to, the money for care won't be needed for long.

Re: assets. If I have money of my own, say in equities, I am the one who decides what to happen to those equities. If they are in my name, and a Capital Gains Tax bill arises, then it's me and only me that pays it. And with only 1 CGT threshold available.

If they are held jointly, then the other person's CGT threshold can also be used.

Unfortunately, if you have dementia or other debilitating care/ support needs and you cannot remain in your home because no one is willing or able to give you the 24/7 care necessary, your LPA can make a financial/ welfare decision to remove you from the home if it's deemed in your best interests.

So many issues with these sorts of restrictions.

They can also sell your home if they want to and what then?

Unfortunately there are crooked lawyers and crooked family members and if you don't have mental capacity anymore your wishes may be over ruled.

Yes, that is what my cousin and his wife have done. You have to make sure everything is watertight, so you can't get turfed out on a whim or if the children get a 'dodgy' partner who insists the parents need to kicked out to free up some assets.

I can relate to that. My DM lived with me and my two young children for a year when she became too poorly to live on her own. She gradually deteriorated and because of my circumstances, I was unable to have her here with me any longer as it wasn't fair on the children - open plan house with DM sleeping in the dining part of my small kitchen/diner and then having to be hoisted into the living room and put a commode four times a day by the carers. Not ideal for the children and certainly no dignity for her.

It broke my heart when she went into a care home and that was when I did all my grieving because I felt I had lost her. She became hypoxic because she wouldn't keep her nasal canula in (COPD) which meant she was very confused. She sadly passed two years later.

“People make such a fuss about inheritance tax (even when the vast majority of estates are not valuable enough to attract inheritance tax)”

The need to make care home payments will nudge a number of estates out of IHT.

If you own your home and have a low income and not very much in savings, the local council pay for any carers that come in. I believe they can provide up to four double ups (two people at a time) every day. If the care needs are more than that, then that is when the service user would go into a care home or move in with relatives. Or they could stay in their own home and release some equity to pay for their care. At that point they would have to fund all their care because the financial assessment would show they had plenty of money because they released some equity.

Please correct me if I am wrong here, but as I understand it when a home is put in trust, the land registry details don't change until the owner of the house dies. When they die, the trust then kicks in.

That should say Monetary gifts AND other assets.

7 years has NOTHING to do with deprivation of assets. They can go back 20 years or more if they are suspicious.

7 years is for monetary gifts to drop out of someone’s Estate for Inheritance Tax.

STOP conflating the two.