What's wrong with selling a house you don't live in?

[Kendodd]

On the back of the NI increase.
If an elderly person living alone moves into a care home, well, why wouldn't they sell their house anyway? They're not going to be going back to live there, the house would be sitting empty and we don't have enough houses for people to live in. The elderly person would then also have a huge amount of money to supplement their income in their last few years. As far as I can see the benefits for everyone far outweigh any reasons for keeping the house.

For what it's worth, I don't think there should have been an NI rise or people paying a fortune for their own care. I think inheritance tax should have been increased instead. I don't get the outrage about selling houses nobody lives in though.

[quote doublemonkey]@LegendaryReady - people pay tax on their pensions.[/quote]
They do, but not NI so not this new "tax".

My DM didn’t need a care home before she died. So no care costs for us but instead far more than the average cost of care was taken in inheritance tax. The government will get it off you some way or other!!

You will probably get more people changing their wills to joint tenants rather than tenants in common and personally I would do this now rather than later in case the government decide to change this loophole

My parents did this so when my mum passed away her half was given to my sister and my son my father got a lifetime interest possession in her half but it meant that if he remarried a new wife couldn’t touch my mums half and if he went into a care home they could only assess him on his half of the house
This is probably the best way to protect at least part of your house if you want to leave something to your children or grandchildren and not have the whole house taken in care fees or lost to a stepparent in the future
It’s easy to do cost about £350 £400 inc changing the deeds to Tennant in common and mirror Wills

At least this way you can pretty much ensure that your kids will get something

And it’s possible to still move house even though you only technically own half of it

Of course it's not fair to expect people who have worked all their lives to have to sell everything to pay for their care when those those that have never worked get it for free. Especially when a privately paid bed costs so much more than the government pay so you are also subsiding all those getting it for free.

I find people who don't own their own home are really bitter about those who do and almost blame them for it suggesting they 'got it for peanuts' or some other crap. Instead they should be blaming the government for keeping interest rates artificially low allowing people to buy up loads of BTL's at a very low interest rate and so pushing up prices because there is high demand and low supply. There is also no restrictions on non resident foreign buyers which is crazy when we are so short on housing stock.

The argument that Inheritance Tax should be raised instead will not end up affecting the 'rich' part of society (I appreciate that the tax free allowances do total £1m, which is a lot, so I imagine people's perception of rich is those with estates surpassing this).

Those that are rich enough to pay IHT will also be rich enough to pay for advice to get wealth out of their estates and mitigate their IHT liability.

I don't understand why people are fussed about people selling their homes to pay for care. I would rather my parents liquidate their assets so they had sufficient care/enjoyment at the end of their days then fret about leaving me an inheritance.

My parents were concerned about having to sell their home for care in the future and not leave anything to my sister and l.

So they became "Tennants in Common" with my sister and l inheriting.

Unfortunately my Dad was diagnosed with a brain tumour and subsequently died. His 50% is now owned by my sister and l.

Should mum need care then her 50% will be used for that.

My sister and l however don't view my Dad's share as "ours" but still class it as Mum's and if she needed it, it would be hers.

It’s not really about the cost of care. According to government figures, it won’t affect anyone in care for less than three years, and that’s the majority. And it’s only the “care” elements - by the government’s own figures, people will still be paying £200 pw even after they’ve hit the £86000 cap.

Agree NI is not the fair way to do anything about care.

I do want something done about the way I will be paying for my own care plus two fifths of someone else’s.

Taxes are shit
No they're not. They are absolutely essential, pay for the most important things we have in life and are, for the most part, excellent value for money. For the vast majority, if they paid no tax and had to provide all the services the state does out of their own money they'd be fucked. People just don't seem to see that though.

Just to clarify a few things on my opinion about this.
My issue with people wanting to hang on to empty homes that they are never going to return to is as much about a home being wasted that a family could be living in as the money. We have a real shortage of houses in the UK, they shouldn't sit empty for years.
I actually think care (not care home accommodation or food) should be provided free at point of need by the state. I think a much fairer way to fund this would be through inheritance tax. Even if I was greedy and wanted to grap hold of as much of my parents money as possible when they die I would rather the state is guaranteed a 10% slice of everything than roll the dice and get all or nothing.

And as expected the usual nonsense has come up 'worked hard all their life'. So what, that's what most people do. I'm sure they did work and pay tax and NI but the fact is they didn't pay enough, the care bill was never predicted when the system was set up. People who don't own a house didn't spend all their money on champagne, much more likely they don't own a house because they never earned enough to buy one, no because they didn't work hard. Do you think the person working in the care home wiping you mums backsides doesn't work hard? And what do you think their chances of ever owning a house are? I heard a saying once, if hard work was fairly rewarded the African women would be the riches in the world.

Also, this myth about inheritance giving (the better off) youngsters a start in life. The average age to receive an inheritance in the UK is 61.

And before anyone accuses me of just being jealous. I'm older myself, own an expensive home, and as the system currently stands, will be subject to HT both ways, receiving and leaving. I think IH should be much higher.

@Kendodd

I don't think people should have to pay for care (accommodation, yes, care, no). I do agree with higher inheritance tax though, enough to cover the NI increase. I don't understand why its preferable to take money from people that they work for and have to carefully budget to make last but not ok to tax a huge unearned windfall. I don't really understand why lottery wins aren't taxes either.

Lottery wins aren't taxed because the lottery is a charity. It might seem bizarre due to potential winnings but it also applies to thousands of small organisations who rely on charitable status to survive financially. Rules have to be applied consistently otherwise it's unfair.

Something needs to be done, i'm just not sure i agree with it ONLY coming from those still working

My DM didn’t need a care home before she died. So no care costs for us but instead far more than the average cost of care was taken in inheritance tax. The government will get it off you some way or other!!

I believe only about 5% of estates pay any inheritance tax at all, so for your mums estate to pay what... £100,000 (?) in inheritance tax she must have been very wealthy and you must have inherited a huge sum of money. I can't imagine receiving a six figure sum that I'd done absolutely nothing for and then being pissed off because I had to pay some tax on it.

@ShrimpBarbarian I think you are misunderstanding how trusts work though. The Duke of Westminster’s fortune is mostly held in trust. This means that instead of paying paying a lump sum upon a death, they pay tax when the trust is set up (20% I think from memory). Then every ten years they pay 6% tax on the value of the trust. They are paying tax, it’s just more sustainable to pay 6% every ten years.

Additionally the Duke of Westminster owns many assets that are exempt from taxation i.e farmland. Additionally heritage assets such as national important works of art, historic houses are also exempt from IHT if they are opened to the public twice a year, which they do.

@endofthelinefinally

Your brother really needs to think about what he will do if the house has to be sold. If his name isn't on the deeds he won't be allowed to stay, or take any money from the sale.

It is my understanding that if he is over 60 living in the house then the home will not be taken into consideration when working out assets held.

I'm really quite fed up of having to bend over backwards for the older generation in this country. The younger generation have given up a substantial part of their education and childhood to protect these people. Now their families will be worse off and they'll face even more disadvantage simply so that people can pass on more inheritance. And all because they are more likely to vote Tory.

@DottyHarmer

I think it needs pointing out that having money does not necessarily bring choice. Mil had advanced dementia and no “nicer” home would accept her.

Furthermore, the fees at a more desirable place might be extremely high, such that after two years your funds are running low. The council will not pick up the tab for you to continue to stay there; you will have to move to a cheaper care home.

This is definitely the case. I struggled like mad to get my Dad who had dementia into a care home. I did find somewhere in the end, it was not flash but they really took care of him for the short time he was there.

MY Mum is still in their home but I would not have had a second thought about selling their house to fund their care. If my Mum goes into care it will be sold to fund that. For most people they do not get their 'inheritance' until later in life - I am 65 and have no need of any inheritance, I could have done with a bit in my 20s though!

My home provides the roof over my head at the moment and I cannot think of one reason why it should not continue to do that should I be unfortunate enough to require care.

MrsClatterbuck
I would check that very carefully and bear in mind that the rules can change. IME getting hold of property and assets is the top priority for the local authority.
When my dad was needing to go into a care home he had to provide details of all his assets before the LA or the care home would even assess his needs.
Every piece of communication started with "Mr ... lives in description of house and location...valued at...." before even mentioning his health, disabilities, care needs. It felt as if he was being reduced to a commodity.

The bigger issue of unfairness is this:
If the state (under)pays for care than private funders not only pay for their own care but also to make up this underpayment
There was an interesting article on how much each county pays for funded care & also for support in when they stay in their own homes
But this figure they now quote as a maximum for funding care does not take into account accommodation or other costs & if the family have the parent in decent quality care (as opposed to the care homes who fail checks or those where the user has either to share room or has no on suite toilet) when their money runs out - what happens than?
the other point is that to get this accepted your county has to agree that you require care & from comments on facebook carers this is difficult. Also people are supposed to have funding for medical care but clever/cynical redefinition of what this constitutes means people don't get this either.
the richest people won't pay as much to this as the poorest because they have better accountants - now that's an argument I definitely think we should have

I'm really quite fed up of having to bend over backwards for the older generation in this country. The younger generation have given up a substantial part of their education and childhood to protect these people. Now their families will be worse off and they'll face even more disadvantage simply so that people can pass on more inheritance. And all because they are more likely to vote Tory.

I'm older and wealthier and completely agree. I hate the way we have shit all over the young and poor.

@RockingMyFiftiesNot

Does anyone know the percentage of people that require social care? None of my grandparents have. 3 lived to 80's and one to 95.

I don't know the answer to your question, but I did read today that 50% of people who receive social care are of working age, ie not pensioners.

Around a million are receiving publicly funded adult social care.

But we should remember that self funders are not just paying for their own care

I do agree this is unfair. Well off residents of care homes are being overcharged to subsidise those who can't afford it, this cost burden should be spread more fairly. Basically you are paying more 'tax' if you need care than if you don't, as well as paying for your own care. I do agree if you have to sell your home to pay for it there is nothing wrong with that.

I'm really quite fed up of having to bend over backwards for the older generation in this country. The younger generation have given up a substantial part of their education and childhood to protect these people

Now here is entitlement, who paid for the schools, universities, hospitals etc which benefit the younger generation, if not these people.

Now here is entitlement, who paid for the schools, universities, hospitals etc which benefit the younger generation, if not these people

It's very different...we all benefit from an educated workforce. No one except the person in care, benefits from that though. I'm not objecting to paying tax to care for people. I object to paying tax to care for people because they don't want to sell their house. They can afford care, they just would rather have it for free.

@caringcarer

Sometimes when one spouse has dementia and can no longer live at home the other spouse still wishes to live in their home. They don't want to have to move.

They don't have to. If a spouse, civil partner or dependent is still living in the home it is not included in the assessment.

@caringcarer

Sometimes when one spouse has dementia and can no longer live at home the other spouse still wishes to live in their home. They don't want to have to move.

They are not required to sell if one spouse is still living there. They will be means tested for care. My mum was in a care home, there was no suggestion my dad should sell their home.

@Comedycook

Now here is entitlement, who paid for the schools, universities, hospitals etc which benefit the younger generation, if not these people

It's very different...we all benefit from an educated workforce. No one except the person in care, benefits from that though. I'm not objecting to paying tax to care for people. I object to paying tax to care for people because they don't want to sell their house. They can afford care, they just would rather have it for free.

The children of the elderly person benefit from knowing their parent is cared for. Otherwise they would gave to either pay or give up work and do it themselves. Also a young person could have an accident or illness and require care.

@serialname

I agree entirely. If you have a house and move into residential or nursing home and leave your house empty of course you should sell it to pay.

If I had £500,000 in the bank I'd be expected to pay. I don't see any difference.

All this "but I worked for it and want to pass it to my children" is irrelevant and selfish.

Do people honestly think that government wouldn’t make someone pay for their own care and make them sell their house? Of course they do!

If an elderly person needs to go in to a hone they will be made to sell their house to pay for it if they don’t have any other money. That’s what happens.

The only way someone could be in a home and still own a house is if they’ve got a lot in savings and they’re paying for their own care with their own savings so they don’t need to sell the house.