Expert help with POA please

[littleacorn11]

Hello,

I have an elderly mother with significant mobility issues but with full capacity. I have managed to convince her that its time to set up a POA as it looks like a care home could be imminent. She has some savings, but not enough to cover care, and doesn't have property. She lives in council accommodation. If she were to go to care, she would be council funded and her state pension and private pension would go towards these costs too.

Six years ago, my mum instructed my son and I to transfer £5,000 into his account for him to use at university. Then, one week later, she requested for it to go towards a new kitchen for us. Then, she wanted it to go towards a new bathroom for us. My son and I decided to withdraw the money from his account and keep it in cash until she decided what she wanted us to do with it (he was 18 at the time and not great at holding onto money, let alone 5k!). After a while, we decided to bank it into a savers account for safe keeping and still have that money to this day.

As this was six years ago, is this something we should declare at a financial assessment when she isn't going to be able to self-fund? She wouldn't have been able to self fund even if she had the 5k in her account. And will this in any way affect the POA I'm applying for now?

I am from Scotland so ideally would like advice from anyone who knows how this works here.

Not an expert but am Scotland. Off the top of my head your DM needs to have less than £23.5k or thereabouts in cash. You can Google the precise sum by searching terms like ‘care homes Scotland savings’
If she has more than this amount she can offset £4K for funeral costs - by putting it into a plan or bespoke account.
She can also allocate £3000 in an allowable gift in this financial year and the one immediate preceding, this is documented under ‘allowable tax gifts’ on the HMRC account.
I think that also answers your question about the historic sum given. Your DM made an allowable tax gift for two consecutive years six years ago, so I would relax about that and not worry further
And I don’t think it has relevance to you applying for POA. Just be sure to mark URGENT all over your POA application and be prepared to phone them to fast track it.

@Mum5net

Not an expert but am Scotland. Off the top of my head your DM needs to have less than £23.5k or thereabouts in cash. You can Google the precise sum by searching terms like ‘care homes Scotland savings’ If she has more than this amount she can offset £4K for funeral costs - by putting it into a plan or bespoke account. She can also allocate £3000 in an allowable gift in this financial year and the one immediate preceding, this is documented under ‘allowable tax gifts’ on the HMRC account. I think that also answers your question about the historic sum given. Your DM made an allowable tax gift for two consecutive years six years ago, so I would relax about that and not worry further And I don’t think it has relevance to you applying for POA. Just be sure to mark URGENT all over your POA application and be prepared to phone them to fast track it.

Thank you for your response!

So with that in mind, do I not have to declare the £5k gift on a financial assessment should she need to go into care?

No, not at all. It’s yours to do as you please.

Just remember it’s two £2.5k gifts from separate tax years given at same time

Apologies because I don't know if this applies to Scotland in the same way as England.

In England POA and the financial assessment for care are very separate things.

POA let's you say who you want to make choices for you, in the case of health and welfare it only applies once you lose capacity. For finance it can be used as soon as it is certified but of course the person whose money it is can revoke it if they are unhappy (and should only name someone they trust anyway!). It is important to have in case of loss of capacity.

When considering funding for care they will look at if people have deliberately given away assests to avoid paying for care. They can go back as far as they want but need to show that at the time the person had a reasonable expectation they would need that money to pay for care. It doesn't sound like this is the case, it sounds like your DM just wanted to gift money to family which people can of course do. They also consider how much of their money people have given away (again to look at if it is a deliberate getting rid of money).

The £3000 cash gifts per year is related to inheritance tax and not to deprivation of assets so even if you are giving away less than that each year it could still be considered as part of a financial assessment if it was thought to be deliberately getting rid of money to avoid care fees.

Age UK might be able to provide some good advice, I've always found them really helpful.