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Legal News | 25.05.23

Can I give away my home to avoid paying care fees?

The short answer is ‘no’ but that does not really warrant a full article, so a longer explanation is needed.

Anyone seeking local authority (LA) funded care will be subject to a financial assessment to determine what contribution (if any) they make towards their care fees.  There are strict guidelines on giving away property and assets; LAs have the ability to examine any gifts of property or assets during a person’s lifetime. If they believe you have intentionally reduced your assets so that they will not be included in a means assessment for care fees, you will be deemed to have committed a ‘deliberate deprivation of assets’.

If that is the case, the LA is entitled to factor in the value of the gifted asset as if you still owned them. This means you could be expected to pay for your care fees, despite no longer legally owning a home to fund the care costs. The LA may also seek to recover any gifted property from the recipient.

Not all disposals will be regarded as a deprivation of assets. You may wish to make a gift to a family member during your lifetime to reduce your inheritance tax liability, or to help someone that is struggling financially or even to provide them with a well-deserved gift.

The timing of the gift is important. If at the time, you could not have reasonably expected that you would need to pay for care costs, then a deprivation of assets is less likely to arise.

If you would like to know more, please get in touch with your usual contact at Wansbroughs or email us at wealth@wansbroughs.com.


Posted By Our Wills, Tax, Trusts & Probate Team