Giving Away Assets to Avoid Paying for Care
The decision on whether you should pay for your own care home fees, and how much you should pay, is based on your assets and capital, such as your home, your savings and your investments. More information on this is available in our article Your Contribution to Care Home fees.
In short if you have assets over the value of £23,250 you’ll be expected to pay for your own care. If you have assets worth over £14,250 but less than £23,250 you’ll be expected to pay for part of your care.
So, in order to avoid this payment, or in a bid to pay less, it may be tempting to simply give away money or property to close friends or family, as a gift or early inheritance. Unfortunately it isn’t that simple.
Deprivation of Assets
If you deliberately give away or convert assets to put yourself in a better position to receive financial help from the Local Authority for your care, this is known as deprivation. This includes both giving away assets and deliberately spending large amounts of money immediately prior to the assessment. Deprivation can also include selling off an asset for much less than it is worth.The Local Authority must prove that any deprivation is deliberate. If you gave away money or went on an extravagant holiday a while ago, before a care home was imminently on the cards, you won’t need to worry.
The council may try to recover any assets they claim you have deliberately deprived either from you, or from the person you gave them to.
Notional Capital
If you are found to have deliberately given away assets or similar, you could well still have to pay towards your care, and this could leave you in a difficult situation. The council may ask you to pay what is known as ‘notional capital’. You will be assessed as having the same amount of notional capital as you have given away, which could be equivalent to the full cost of your care.Disputing a Deprivation of Assets Decision
If your Local Authority believes you have deliberately deprived yourself of assets to avoid paying for care, but you disagree, you can appeal.
In the first instance you should discuss your case with the Local Authority to see if things can be resolved. If not, the next step is to submit a formal complaint in writing. The Local Authority is obligated to respond within 28 days. If you still disagree with the decision, the matter goes to a review panel. There are three panel members and at least one member must be independent of the Local Authority.
Other Considerations When Giving Away Assets
As well as the legal and financial implications, such as those above, of giving away assets, there are other important issues to consider. This applies even if you are considering giving away assets for a reason other than to avoid paying care costs.If you pass your home on you may not be able to sell it on later. The person you give any assets to might not agree to sell it when you want to.
If you are thinking about giving away assets for any reason you should always seek professional financial advice beforehand
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Anabarnes - 29-Aug-23 @ 11:47 AM
My husband is in nursing home. He pays divorce settlement monthly to ex wife. Does local authorities take that when they do our financial assessment?
Also my husband has gifted to me half of his occupational pension . Do local authorities take that into consideration when assessing our finances?
Lucy - 14-Jul-21 @ 8:37 PM
My mother hasdimensiashe had to sell her house to pay for her care home . My question is how much of her money is she allowed to spendeach year. She has 13 grand children which she would still like to buy birthday and Christmas gifts for. May be she would like a holiday. If she spends any of the proceeds from the sale of the house on anything other than the £800 care home fees are they likely to come after the money.
Rus - 27-Oct-20 @ 4:17 PM
My dad is living with his girlfriend he has early dimentia, my brother and I have POA of his finances and he wants us to have some money before he possibly goes into a home at some point. My brothers just had a baby and he wants to see his first grandchild have some money in an account, he is incapable of using his bank account etc hence why we have POA and assist him alongside his girlfriend in day to day living. Can you help please on what options we have currently?
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HR - 1-Oct-20 @ 8:47 PM
My mum has been in nursing home for over 5 months and has been paying a contribution towards her fees.We have found out today that local council has not contributed and have no paperwork.I done everything through a social worker at hospital.What kind of proof will they require.
dom - 24-Sep-20 @ 5:03 PM
My mother is in a nursing home and is 97 with dementia. Her care costs are paid by the council. My brother has his name on her bank account but refuses to say how much there is in the account but says there will shortly be too much and she will have to pay more to her costs. Question can he make small gifts to himself , Me and my other sister as we are both in financial distress. How much money is likely to be in the account. If anything happens to mum what is to stop him withdrawing the money and taking it for himselfany help would be really appreciated. Thanks
Ann - 23-Aug-20 @ 9:56 AM
My mum has been in a care home since Feb 2019. We sold her house in October 2019 to pay for her care expenses. She has some savings so it will be 2021 before any of her care expenses come out of the profit from the house sale.
My mum is happy to lend me £20K to renovate my flat and for me to pay her back on a monthly basis. However she is anxious to know that this is legally fine to do. Please could you let us know.
Hilary - 10-Aug-20 @ 10:31 AM
My mum signed over her house in 2012 to me and my sister. If she has to go in to a care home do we still have to sell our home to pay for fees? The solicitor said at the time that if she went into a home within the 7 years then we would have to sell the property , but after the 7 years we wouldn't have to . Does this still stand now thanks
jen - 5-Aug-20 @ 4:54 PM
My brother passed away leaving his estate valued over 300,000,he was never married or had a partner and no children, I am his only sister, our father who never was involved in our lives at all is apparently next of kin who has agency to care for him on a daily basis, my mother has passed away, my father has said he doesn't want anything as he feels it should all go to me,but what happens to his care benefits if he passes it on to me?
Katrina64 - 29-Jun-20 @ 8:57 AM
Me father, who is 98 years old is due to go into a care home. He owns his own house and has £23k in savings.
Can he give me a loan to pay for my home
Renovation and I agree to pay him back on a monthly basis
Crim - 28-Jun-20 @ 12:23 PM
Hello, my Mother owned a 1bed property in London. She was living alone and struggling financially and with her health. We therefore decided 4 years ago, to move in together and closer to my sister so the three of us could be close to each other. To do this we needed to buy a house. In order for me to get a mortgage as I had little savings, my Mother transferred the house into my name so that I could use the equity to apply for a mortgage. I did this and we brought a larger house closer to my sister and are living in it now. It is just to 2 of us and while I have to work to pay the bills I am also her unpaid carer. However she also has support for around 10 hrs a week from the local council for home care support. When this happened we let the local council in London know about the change. Now for the first time the local council in the area we moved to has sent an assessment form to my Mother and asked if she has transferred a property for the first time. We are filling it out and wonder if there is anything to be concerned about. Are you able to shed any light on your thoughts please?
Rj - 22-Jun-20 @ 4:38 PM
My mum has just moved into a care home with about £16,000 in her bank account. Her husband has just died and so there is another £23,000 going to be added.
My mum said that she wanted the children to have some of the money that. 3 of us how much can she five us from the £23k her husband left her.
My mum also has dementia, we do have a letter which we wrote as both my sister and myself have POA.
Please can someone help us
MikeH - 12-May-20 @ 6:30 PM
My mum transferred her house over to me 11 years ago after my dad died,so I could be responsible for any repairs that was needed as my dad had always done this and she didn’t want the hassle in later years, she was of sound mind had a good social life and still went on holidays until 2 years ago when she did this. She in now 94 and has just been diagnosed with vascular dementure. Would the council therefore still class this as deprivation of assets if she goes into a care home. As I have paid out for alterations on the property to make her life easier and would therefore be out of pocket if it was sold and payment given for her care
J - 7-Mar-20 @ 10:11 AM
My husband has been in a wonderful care home for seven years and is very happy there. He is self funding but funds are dwindling. Will he be able to stay there, when the time comes that he isn't able to continue payment which is £800 per week.? We own no property, I am renting and depend financially to a certain extent on my husband so I am concerned for my future welfare.
Mrs H. - 15-Feb-20 @ 8:20 AM
My 85 year old sister is about to go into a nursing home. The only funds she has is £5000 she has had saved for years for her funeral. Will she have to give this up?
Fred - 18-Jan-20 @ 11:47 PM
I signed my house over to my daughter in 2014 to avoid care home costs. I have since wanted to downsize but she will not let me do that and release some money for myself. We have fell out over this. As I paid the mortgage in full am I entitled to all proceeds if she sells house while I am still alive? I have a pending court case over this, doesTOLATAapply and what are my chances?
Regards
Don
Drgg - 16-Nov-19 @ 2:53 PM
Mom sold her house 3yrs ago. Giving money to me and my brother.She moved into shelteredaccommodation as stairswere difficultfor her.She paid full rent and council tax out of her savings. 2yrs ago she was diagnosed with vasculardementia. We had carers in looking after her to help us out. All paidby mom. Last yearshe fell and broke her pelvis.After 3weeks in hospitalthey said she needed 24hr carein a home. Her money is nowrunning out as fees are £1200 per week. Are we still allowedto keep money from house sale.
Sandy - 31-Oct-19 @ 2:33 PM
My dad is shortly going into care and most probably will be self funding. Is he still allowed to give his annual gift allowance of£3,000.00 a year to help his family ?
we estimate his savings will run out in 3 years and then would be reliant on the state to pay his care
january - 18-Sep-19 @ 10:23 AM
My mam is in sheltered accomadation she pays £220 a week care but gets full rent and council tax rebate.. If she sell her house would she have to pay back her rent and council tax or would it start afresh once house sold
Lesley f - 2-Sep-19 @ 12:23 PM
I am looking after elderly (97yrs old) uncle.
He was in care home (which cost him £3500 a month) but he wanted to move in with me and to pay me for his care instead
Hes been living with me for a year and he helps me with mortgage and gave me money to pay my loans etc .
Now I was told that all the money he gave me (even the food shopping money) I will probably be tax for??
Is that correct??
If he is living with me and I am his carer, do I still get tax on what he helps me to run the houSe?
Niece - 18-Jun-19 @ 1:20 PM
My dad is 90 and cared for at home..my question is as hes got 70k in bank..if he took out say £300 a week from his account for general living expences ,would that be seen as deporvation off assets..what do the council see as weekly living expenses thanks...
Derekbham - 8-Jun-19 @ 7:28 PM
My mother recently moved into Council Sheltered Accommodation 'no additional care' at present. Mum is using existing savings and pension for the rent and any other outgoings. The house will be sold shortly £250.000.
Q: it was my mothers intention on the sale of the home that she would gift myself and my sister 15k each then the additional £3,000 per annum.
This would leave at least a minimum of iro £220,000 for additional care if needed, would this in your opinion suggest that this was an intention of 'deprivation of assets' and would the Council investigate.
My mother is 91 years of age
pistol - 14-Jan-19 @ 5:08 PM
John - Your Question:
My mother gave her home over to myself 11 years ago through a solictor. My sole name has since this time been on the deed which I keep in my possession. Sadly in the last 3 years my mother has been diagnosed with dementia. She very recently went into a care home, currently social care is paying for her fees. She is yet to be financially assessed. Will my house be liable to be sold etc?
Our Response:
Since it was 11 years ago (assuming your mother showed no signs of ill health at the time), it's less likely that the council will investigate (as they would if it were 12 months for example) but there is actually no time limit on how far they can go back.
FundingCaring - 14-Mar-18 @ 3:08 PM
My mother gave her home over to myself 11 years ago through a solictor. My sole name has since this time been on the deed which I keep in my possession. Sadly in the last 3 years my mother has been diagnosed with dementia. She very recently went into a care home, currently social care is paying for her fees. She is yet to be financially assessed. Will my house be liable to be sold etc?
John - 12-Mar-18 @ 3:48 PM
My nan has just been refused help from financial assesment and got 1week left as my dad as been given 28days notice for £29000.00 I dont know what is going to happen.I have contacted local mp and feel I want to shout load about this ,not one member of our family have been offered help or support and social services just dont care because she is self funded,but had attendance allowance stopped last april when we first applied for financial assesment.
Can anyone help
lw - 5-Mar-18 @ 11:32 PM
Jill the pill - Your Question:
My mum went into catr 4 months ago and is self funding. Her house is being sold to self fund her a further 3 years. Is she allowed to give her annual £3,000.00 a year to help her family ?
Our Response:
We don't know whether there is a limit to this if you are self funding.Usually the council will have to prove that you have deliberately given away assets to avoid paying for care. If you give grand children presents for a wedding or to help with university costs etc we're not sure whether/how much this is accepted, sorry.
FundingCaring - 5-Dec-17 @ 1:57 PM
My mum went into catr 4 months ago and is self funding. Her house is being sold to self fund her a further 3 years. Is she allowed to give her annual £3,000.00 a year to help her family ?
Jill the pill - 4-Dec-17 @ 7:40 AM
Di - Your Question:
My Mum had to come and live with me so I could care for her. She sold her house and agreed to pay me £1000 monthly which covered the wages I had to give up. I still have a large mortgage. She sold her house. My brother wanted half the house money to buy his council house, which Mum agreed to. The rest of the money is coming to an end now, can she claim for help at all?
Our Response:
We don't have enough information about your circumstances to really be able to help with this. You could try the Turn 2 Us calculator or Citizens' Advice for more information.
FundingCaring - 17-Aug-17 @ 1:43 PM
My Mum had to come and live with me so I could care for her. She sold her house and agreed to pay me £1000 monthly which covered the wages I had to give up. I still have a large mortgage. She sold her house. My brother wanted half the house money to buy his council house, which Mum agreed to. The rest of the money is coming to an end now, can she claim for help at all?
Di - 16-Aug-17 @ 2:09 PM
My perants want to gift me there property as my dad is terminally ill. My mum is in early stages of dementia.How does the 7 year rule on gifting work if my mum ends up in a home but for example lives for another 10 years can the property be made to sell to pay care home fees
Chopper - 28-Jul-17 @ 10:11 PM
