News1 min ago
Family
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Is it still possible to make a present of your house to your children,and providing you live seven years it becomes theirs.If it is still possible and it is no longer yours,the house cannot be used to pay for any long term care you may need.
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This has not actually been tested in Court yet to my knowledge. However, there are no limits on how far back a Local Authority may go to ascertain gifts which have as their "signficant" reason the defeat of a contribution to care home fees. A younger person, who has no reasonably foreseeable need for long term care may well get away with it. However, there is almost unimited powers for the LA to look into your past. If it is deemed that you have given away your asset to defeat a contribution to care fees, then the LA deem you to have capital to the value of the asset, decreasing on an annual basis by the fees that you are deemed to have paid. This will be secured by a charge on the property (most people end up entering into a deferred payment agreement to charge the property with the fees).
More info here: http://www.dh.gov.uk/en/Publicationsandstatist ics/Publications/PublicationsPolicyAndGuidance /DH_4107292
The 7 year rule has no bearing on care home fees - this relates to inheritance tax, whereby if you give an asset away and survive 7 years it is not brought into account for IHT.
Thus you end up with the anomoly that if you gave your house away and survive 10 years, it is not taken into account for IHT, but may be taken into account for care home fees.
More info here: http://www.dh.gov.uk/en/Publicationsandstatist ics/Publications/PublicationsPolicyAndGuidance /DH_4107292
The 7 year rule has no bearing on care home fees - this relates to inheritance tax, whereby if you give an asset away and survive 7 years it is not brought into account for IHT.
Thus you end up with the anomoly that if you gave your house away and survive 10 years, it is not taken into account for IHT, but may be taken into account for care home fees.
when we looked into this my solicitor also pointed out that if I gave the house to my daughter and then she and her hubby got divorced the house would be included in the settlement so I could end up homeless.
What we have done is instead of having a joint ownership of the house we have taken out a severance of tennancy, which means I own half and my hubby owns half so if I need to go into care only the half I own can be used to pay for the care and the house cannot be sold unless we both agree. When I die my half goes to my daughter, so then if my hubby needs care again only half the house is to be used to pay for it. does this make sense, I know what I am trying to say but trying to write it down is harder.
What we have done is instead of having a joint ownership of the house we have taken out a severance of tennancy, which means I own half and my hubby owns half so if I need to go into care only the half I own can be used to pay for the care and the house cannot be sold unless we both agree. When I die my half goes to my daughter, so then if my hubby needs care again only half the house is to be used to pay for it. does this make sense, I know what I am trying to say but trying to write it down is harder.
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