Grandparents paying university tuition fees count as deprivation of assets?

[falstaff1980]

Since 2019 my parents have been paying my kids university fees and accommodation, but 8 months ago my dad fell sick and is likely to need paid care soon. There's still two more years of uni left for the youngest ones. If my dad continues to pay this now, will it count as deprivation of assets? Will what he paid in previous years (when he was fine) count as this? We have emails and bank statements showing proof of this from previous years, medical records will show my dad was in good health with no expectation of needing imminent care, my dad would just be continuing to do what he always planned to do with his savings.

Situation is both my parents live in a house they own outright, they have a decent amount of savings (much of it inherited from their parents I think). Even paying the remaining uni fees it might be a year or so before they are down below the £23k threshold.

Replying to bump, in the hope that someone who knows the answer will appear

I can’t see what he paid in earlier years being counted as deprivation of assets because there was no indication he would need care.

Continuing to pay fees is more difficult, because now he knows he needs care, and it sounds as if his savings are not enough to allow both paying the fees and paying for care as long as he needs it. And he doesn’t have a house to throw into the equation as his wife still needs it.

I have a feeling I read somewhere that payments for education purpose are exempt from inheritance tax. I think that is why so many rich grandparents pay kids school fees! And I think that extends to uni fees too. But this is just something I think I remember reading so do double check!!

… but the OP is asking about deprivation of assets which has nothing to do with IHT

And it would have to be done through a specific trust anyway

That’s wrong.

I am not an expert, but I think if he is paying for it out of his income, it's fine for now. This is also what grandparents might do to avoid IHT (which I know is not the issue here, but to respond to a PP) - there are specific limits on how many cash gifts you can give per year that don't get included in your estate, but regular payments from your income like these ones are also allowed. So you would use this to avoid accumulating more savings which might eventually be liable for IHT.

If he's paying for it out of his savings, that might be problematic, because it would mean that rather than just avoiding saving more, he would be running down the amount of savings available to pay for care.

To answer your question - yes, it could be seen as deprivation of assets. There isn’t a time limit on this as there is with the 7 years for IHT avoidance.
However, he needs to crunch the numbers. Say your parents have £50k in joint savings. His share would equal £25k for financial assessment purposes. If the Uni fees were to be paid out of your mother’s half of savings, then your DFs savings would not be depleted. If the savings are all in his name, then he needs to split them with his wife into 2 accounts.

If there was no expectation of him needing care then intentional DOA can’t possibly be proven. Paying further Uni costs may be problematic though - take advice from Age Uk or someone.
The house is safe as it won’t be taken into consideration and if he has a much higher pension income then half of that will be disregarded too as he is supporting your Mum.
Given that they have plenty of savings and he will be self funding initially then the LA wont be involved yet anyway.
An immediate needs annuity bought with savings or personal pension might be worth a look too.

https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs40_deprivation_of_assets_in_social_care_fcs.pdf
This may help

It doesn’t look like deliberate deprivation of assets from reading that age uk document.

However, as he now needs his money to pay for his care, I think it would be sensible for the students to apply for the standard student finance loans.