FIL died last year leaving MIL in house which is owned by her outright. She is fairly fit and coping well by herself. SIL is struggling with the loss of her dad and is very emotionally attached to the house and is very concerned that MIL might have to sell it to pay for care. SIL is my DH's sister
She has now suggested that she and my DH ask MIL to transfer the house to them. I have said I think the local authority would regard this as deprivation of an asset and put a charge on the house anyway as MIL would still be living in it.
SIL then asked if she and DH bought the house and MIL paid them rent would this avoid the house having to be used to pay for care. I think that the purchase price would need to be market value and the rent market rate for it not to be regarded as deprivation of the asset.
SIL would want MIL to "sell" to her and DH for substantially discounted price and allow MIL to live in it rent free in return. I still think this is deprivation of the asset. Incidentally DH is not really interested in any of these scenarios and SIL has no spare cash but she is very distressed at the thought of losing the house.
I'd really welcome an opinion - MIL and SIL are in England btw and I have posted on legal also but have in the past had lots of good advice on this thread. Thanks