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!

I think the crux of the matter is what is a reasonable/acceptable value of gift for a parent in a self-funded care home to give their children, without it becoming ‘deprivation of assets’?

IHT is a red herring, because in this case they don’t have enough assets for it to be a factor. It’s also unreasonable to say that a parent can’t ever give their children anything at all, so what OP needs to know is where is that line? Hopefully a chat with the solicitor will help.

Yes, this is what I understand too, it's not £3,000 to each person, it's a flat £3,000 to however many would be receiving it.

Yes, I used dementia because that’s an example where the illness can be long drawn out and wipe out all savings, especially in areas where house prices are lower. It also leads to far greater “non-medical” needs than would be expected for the age. Most over 80s would require help with the garden; they wouldn’t normally require someone to remind them to eat lunch.

When Dad went into nursing home the fees quoted were after deduction of the nursing care allowance.

Not sure you’ve understood previous replies.

you don’t need to worry about inheritance tax, they don’t have enough assets.

you do need to worry about them giving you money when you know they will require paid care at some point in the future.

your local council can go back years and look at money you have been given by your parents. They can then ask you for it back to pay for the care if they think any of your family have tried to gift the money to avoid paying care costs.
so say your parents give you the 50k now, you all know that the 50k maybe needed to pay for a carer in the future, the council will ask you to pay it back to pay for the care if needed.

Just to clarify - the £3k per year rule is related to IHT, not deprivation of assets.

For deprivation of assets there isn’t an annual amount that’s “allowed” - any largeish amount may be regarded as deprivation of assets, it’s all about the intention ie whether the gift looks like it was made to avoid paying for care. (Imagine they wouldn’t quibble about £50 here and there).

Similarly the 7 year rule (they won’t look at gifts dating more than 7 years ago) relates to IHT not to deprivation of assets. For deprivation they can in theory go back as far as they want, again, it’s all about the intention at the time.

Apologies if this was already clear!

So eg if the person had always given a grandchild £50 per year for birthday/Christmas this is normal expenditure for them and would be fine to continue.

It's more problematic if it suddenly starts as they start needing care, so there isn't a back history. Or the amounts suddenly increase.

If you've been buying things on their behalf eg food, equipment, then keep a record of it all, with receipts, as it's expected you'd be reimbursed for that.

The 7 year rule thing - would that apply only if IHT were payable on the Estate, or would it still kick in if the person who'd gifted say £10K died within 7 years of making the gift but overall the Estate wasn't high enough to warrant IHT being paid?

The vast majority of UK solicitors are neither qualified nor competent in the area of tax advice. The decent ones will be very upfront about this. HMRC website is best reference for basic tax rules, with working calcs for IHT etc.

Its £3k from each parent

Only if IHT applies

😆 this is complicated!

It's OK I outright refused the £50k. Savings are approx £100k.

Most of it will be gobbled up anyway.

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.

The point about paying for care - if you are able to - is that it gives you more control over the quality and standard of care you get. there is a lot of very very shoddy care on offer from untrained or barely trained people and those who literally don't give a shit about the humanity of the person they are looking after.

If you have money and need care, I'd be careful about adopting that approach. It does slightly depend on the amount of money you are talking about. If it is a low amount anyway then you probably aren't going to be in a position to pay for that control for very long so maybe a pointless endeavour.

Any gift in the last 7 years (apart from the allowed £3000pa) is treated as if the donor still has it for the purposes of calculating his estate. So it’s notionally added back into the estate. You still have to list it on the probate form,

It’s possible that an estate is below the IHT limit, but above the limit when you add back the gifts. Indeed likely, as that’s why people make large gifts in their later years,then just hope not to have an unexpected heart attack before the seven years are up.

but even if the estate is tiny, you have to list gifts in the last 7 years, to reassure the taxman that the donor hadnt simply given all his money away to avoid IHT

Not correct. You can give an unlimited number of gifts of £250 too, one gift per recipient. These gifts are exempt from IHT.

Thanks.

Unbelievably, the person I was asking this for was gifted a sum of money and the donor died the day after the 7th anniversary! 😲

What if, even any gifts added back do not take the estate over the iht limit?

A friend keeps "helping out" her family and I'm concerned in case they need care in the future ...?

https://www.gov.uk/valuing-estate-of-someone-who-died/estimate-estate-value

Right I think I'm just going to check with adult social services and say she wants (tired of being gender neutral) to give both me + sibling £250 each for birthday and Xmas. I have authority with her bank, they know me and call out my name when I walk in so if she writes a letter confirming this and a dd is set up for exact dates I don't think I've broken any laws.

It's slightly beyond me all this stuff.

I've got brother's bank details.

This is correct.

OK so it seems OK then if I get DD set up for £500 per person (me and sibling) for Xmas and birthday? Clearly labelled 'birthday' and 'Xmas'. Brother's birthday is first this year.

I am really going to have to sit mum down and say that the majority of the money isn't hers anymore once property sold. She can't shove money at me and she must understand that.

I really do think the allowance should be more than £23,250 otherwise this wouldn't have come up. £50k or even £40k would be more reasonable.

I sorted out attendance allowance for her 7 years ago and she gets small pension and state pension.

But yes it's better if she's safer and in more suitable accommodation. It stresses me out having phone calls about her setting fire to the place and having falls at 3am. We tried to make it work where she is with carers each day but it's just not.

I really do think the allowance should be more than £23,250 otherwise this wouldn't have come up. £50k or even £40k would be more reasonable. It's not going to change. Most people take the view "why should I pay more tax so you can get an inheritance?'

(Completely ignoring the fact that they're already paying more tax so other people can get an inheritance).

You neglected to initially mention the £100k savings in addition to the value of the house.
£250k will give around 5 years of care fees, don’t forget State pension and any other pension income will cover at least £8- 10k a year. Average care home stay is 2 years.
With assets of £250k, the LA shouldn’t be interested in a £3k gift if the time comes that the money is running out, it’s not even a month’s fees. They are more interested in people giving away their homes/ setting up trusts to avoid paying fees.
Parent could also buy an immediate needs annuity with the savings. Depending on health conditions it could be a good investment.

Well we've had an offer on the place, it's a bit less than she wanted but it's not worth hanging around for months as she does need more assistance on site.