This is going to sound so mercenary, but...

[PinkFlamingoDance]

It is unavoidable that parent goes into more suitable accommodation and sells their place. They need to be safer and several carers each day isn't cutting it.

I'm all for residential accommodation but this will mean any assets will be spent on the fees up to £23,250.

As far as I understand £3k can be gifted each year without breaking any laws. Is this correct?

I have a sibling so that would be £3k each per year.

I had an email from solicitor today about house sale and get on well with him so could ask him to check this isn't illegal. Thanks!

The £3k is what can be gifted annually before it's liable for inheritance tax. The other consideration you will have is deprivation of assets to avoid funding care.

No, sorry. £3k relates to how much can be given per year without being considered for inheritance tax, which is entirely separate from qualifying for funding for a care home. Giving away funds which would reasonably be expected to be needed to fund care would be deprivation of assets. It’s not illegal, but the council could refuse to pay and you would be expected to fund the care.

Do they have capacity? If not I don't think you can decide for you and your sibling to get 3k a year each.

Ask the solicitor's advice.

It doesn't sound mercenary, it is.

You can’t do it, sorry but not mercenary!

Oh drat, I knew this was going to be complicated! Yes they have capacity and are fine with £3k each per year but I don't want to get into hot water.

They are a bit clueless and are trying to gift me much more than that and I keep having to say it's not allowed.

Solicitor it is.

Thanks by the way for responses.

If they need to pay for care I don't think they should be giving any money away.

Just out of interest, how much equity will there be when the house is sold?

It's a small place, £150k. I really don't want to violate laws so I'll speak to Mr Solicitor.

He emailed a doc today which I haven't read yet but I'll call him tomorrow. He is actually older than my parent which surprised me a bit but he said he can't stand daytime TV. He was also surprised it was assigned to him. It's pretty straightforward, just savings and property.

I think it's £3K in total that can be gifted each year, not £3K each.

As a carer I can say I’ve only ever seen this opinion on mn. I find the older generation would very much prefer that they have at least the family home to leave to their children, rather than their life savings used up and house sold off to pay for care fees. And I don’t blame them one bit because I’ll be doing the same.

Especially when often their adult children may have given up paid work or cut down on it in order to keep them at home as long as possible.

It's £3k total each year, not £3k each per year. You can roll the previous year if it was unused, so potential of £6k in the first year.

Gifts from income can be made if it does not impact on standard of living. So if for instance they have a monthly income of £4k, but monthly costs for everything are £2k, they can gift the surplus £2k. However, if the money is needed for care, this route would not be open to you. You also need to keep fairly stringent records for HMRC, otherwise they could potentially include it for IHT.

Any house maintenance / improvements/ alterations should come from capital, not income. If there is a medical diagnosis that means alterations are needed (accessibility alterations, stairlift, wet room etc) you can get them zero rated for VAT.

They can legally gift more than £3K but it’ll be liable for inheritance tax if they don’t survive at least seven years. Plus you’ve got to consider deprivation of assets if their remaining funds run out.

Def. discuss with the solicitor before letting them gift you anything.

If they haven’t been giving you £3k a year before now, it will be seen as unreasonable to suddenly start.

Yes it is £3k per year, not per person. I gift £3k between my 3 DC so they get £500 each twice a year.
If your Dad needs to go into a care home and the house is sold and he gifts you and/or your sister money then the council will claim 'deprivation of assets'. They will make you repay the money if your Dad needs care taking his assets down below £23,250.

OP it doesn’t sound like their estate is going to meet the IHT threshold when the time comes, even before care fees start being paid, so that doesn’t need to be a consideration. (The threshold is £325k, and can go up to £500k if you leave your home to your children)

Lots to consider - I haven't been able to work full time over past few years due to care commitments.

Another thing they do is dial 999 if they can't get hold of me. Last thing you want is paramedics turn up when you're trying to have a cup of tea and watch a film in peace. I have to be polite but get them out of the door as soon as I can. It's attention seeking.

I'll ask solicitor if £3k per year is fine shared between me and sibling. I have loads of receipts of what I've bought parent anyway.

I do think they're daft trying to shove £50k onto me, if you go into residential care then most of the money doesn't belong to you anymore.

Of course everyone would prefer that. Just as they'd prefer to pay hardly any tax and still have well funded freely available public services.

I didn't just mean from a moral point of view actually as it would be seen as deliberately depriving the person of assets so can be reclaimed from those receiving the gift I think.

Rather than ask your solicitor, ask the accounts team at your local council’s Social Work team if they allow for one payment of £3000 per year as allowable gifts in their calculations.
They are the ones who matter.
(And when you have the conversation don’t be emotional about how you need the funds.)
In previous years some Councils granted this but I think the system has tightened up and they all take the same view, but it is worth asking, nonetheless.

If they’ve been getting £3000k a year, then you can continue that if it’s the parent’s wish and they can afford to do so. But if they have a foreseeable need for care, and don’t have enough separate funds to cover it, then it’s likely to be regarded as deprivation of assets, and the LA will carry out the financial assessment as if they still had the money.

what he can do is apply for Attendance Allowance, provided he’s receiving no LA finance for the care home. If he qualifies for the night time rate, then it’s about £100 a week, which is more than the £3000 (total not per person) a year that is disregarded fir inheritance tax.

I find the older generation would very much prefer that they have at least the family home to leave to their children, rather than their life savings used up and house sold off to pay for care fees. Especially when they no longer wish to be alive. If the state is going to keep me alive after I’ve had enough, the state should damned well pay for it.