Tax implications of funding carer

[NetZeroZealot]

Finally got DP to agree to a live-in carer.

This is ££££ but they are very lucky to have some capital, investments. Currently they pay minimal income tax as they don't draw down much from their pensions / ISAs. Clearly this will need to change. Are they going to be hit with a big tax bill on top of the care costs?

You can get a care act advocate from the county council ? Who will advise of the care package? Sorry don’t know more but check your council website for an advocate

ISAs are tax free and outside tax returns.

Pensions you can get free advice from https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

There are different ways you can take pension income which have different tax implications but they can give general advice.

If they take more income from their pensions they will pay more tax. However, you can organise things in the most tax efficient way possible. Do they have someone managing their investments for them?

If they need full time carers have they claimed Attendance Allowance? It’s not based on income.

Spend capital rather than creating more income?

Yes already doing this. It doesn’t even touch the sides when it comes to paying for full time care.

If you draw down capital surely you have to pay tax on it too?

Not on an ISA

No, capital is yours, you only pay tax on income.
(Pension wrapped stuff will be different however as you get tax breaks when it goes in).
But you can eg cash in an ISA and spend that with no tax issues.
You can cash in shares, but may need to pay capital gains tax.