Mum gives me her house, how to deal with care costs later on
Discussion
Jockman said:
Elderly said:
I've just seen this thread and clicked on the last page .....
..... I'm rather mystified (no I'm not - it's P.H.
) as to how
we've got from the thread title to postmen's uniforms
.
My 'friend's' situation was:
Mother sold family home, gifted her sons & their spouses the money, they bought a sheltered flat and allowed their mother to live in it rent free.
When the mother eventually needed to go into a home she obviously had held
no assets for a long time ..... Bingo!
Flat then sold using sons & spouses annual CGT allowances.
If you read the other pages you'll find a few people supporting your approach, some warning of genuine pitfalls in your approach and still others who find it completely immoral...... I'm rather mystified (no I'm not - it's P.H.
) as to howwe've got from the thread title to postmen's uniforms
.My 'friend's' situation was:
Mother sold family home, gifted her sons & their spouses the money, they bought a sheltered flat and allowed their mother to live in it rent free.
When the mother eventually needed to go into a home she obviously had held
no assets for a long time ..... Bingo!
Flat then sold using sons & spouses annual CGT allowances.
Elderly said:
Actually the sheltered flat was purchased by the sons and their spouses using their own funds before their mother happened to gift money to them.
I've been in a similar situation, though the rules of that sheltered scheme forbade people to buy without actually living there themselves of close family members over 55.Countdown said:
I think it's the "bingo" element that some may find immoral. In other words "She's held no assets because she's wisely given them away well in advance of having to use them to pay for her care in later life. This means her son and his spouse have benefitted and the taxpayer will be picking up the tab".
Agreed.I'm making no judgement, just trying to summarise the 3 main viewpoints
Elderly said:
It was money that was gifted not the house.
Actually the sheltered flat was purchased by the sons and their spouses using their own funds before their mother happened to gift money to them.
There's still a strong chance of that being considered a "gift with reservations".Actually the sheltered flat was purchased by the sons and their spouses using their own funds before their mother happened to gift money to them.
Elderly said:
IHT didn't come into it, the mother survived 7 years and in any case each half of the house, which was owned separately with her late husband, was just below the IHT threshold.
Understood - my point really is that from the Residential Care point of view, you need to show a good reason why the gift was made. Inheritance tax planning would be a perfectly valid reason - but a 'gift with reservation' isn't good IHT planning.silentbrown said:
Elderly said:
It was money that was gifted not the house.
Actually the sheltered flat was purchased by the sons and their spouses using their own funds before their mother happened to gift money to them.
There's still a strong chance of that being considered a "gift with reservations".Actually the sheltered flat was purchased by the sons and their spouses using their own funds before their mother happened to gift money to them.
Jockman said:
Seriously?
I think so. https://www.gov.uk/hmrc-internal-manuals/inheritan...IANAL, but if this wasn't the case IHT avoidance would be trivially easy. It isn't.
silentbrown said:
I think so. https://www.gov.uk/hmrc-internal-manuals/inheritan...
IANAL, but if this wasn't the case IHT avoidance would be trivially easy. It isn't.
That's an interesting angle - I don't think it applies in this case but it's an area to be mindful of.IANAL, but if this wasn't the case IHT avoidance would be trivially easy. It isn't.
Something I had forgotten about until I was browsing this thread, about 15 years ago my parents drew up wills that if one of them passed away then their half of the property would pass to me in trust. The reason they did this was that my mother didn't want some "floozy" 
taking the inheritance for me and her grandkids if she died and dad remarried. I am guessing that it passing to me in trust wouldn't mean anything in terms of paying for a care home for the surviving parent and "my half" of the property would be used.
Curious and a non question really, my parents should be around for a long time yet and hopefully I will get them living very close to me (or attached) by the time they need help. My parents did the same with their parents and I grew up with my grandad and grandma attached to our house (slightly fractious at times as it was my dad's dad and mum's mum, who disliked each other intensely = lived on opposite sides of the house)
taking the inheritance for me and her grandkids if she died and dad remarried. I am guessing that it passing to me in trust wouldn't mean anything in terms of paying for a care home for the surviving parent and "my half" of the property would be used. Curious and a non question really, my parents should be around for a long time yet and hopefully I will get them living very close to me (or attached) by the time they need help. My parents did the same with their parents and I grew up with my grandad and grandma attached to our house (slightly fractious at times as it was my dad's dad and mum's mum, who disliked each other intensely = lived on opposite sides of the house
) Jockman said:
Elderly said:
I've just seen this thread and clicked on the last page .....
..... I'm rather mystified (no I'm not - it's P.H.) as to how
we've got from the thread title to postmen's uniforms.
My 'friend's' situation was:
Mother sold family home, gifted her sons & their spouses the money, they bought a sheltered flat and allowed their mother to live in it rent free.
When the mother eventually needed to go into a home she obviously had held
no assets for a long time ..... Bingo!
Flat then sold using sons & spouses annual CGT allowances.
If you read the other pages you'll find a few people supporting your approach, some warning of genuine pitfalls in your approach and still others who find it completely immoral...... I'm rather mystified (no I'm not - it's P.H.
) as to howwe've got from the thread title to postmen's uniforms
.My 'friend's' situation was:
Mother sold family home, gifted her sons & their spouses the money, they bought a sheltered flat and allowed their mother to live in it rent free.
When the mother eventually needed to go into a home she obviously had held
no assets for a long time ..... Bingo!
Flat then sold using sons & spouses annual CGT allowances.
Elderly said:
I've just seen this thread and clicked on the last page .....
..... I'm rather mystified (no I'm not - it's P.H.) as to how
we've got from the thread title to postmen's uniforms.
My 'friend's' situation was:
Mother sold family home, gifted her sons & their spouses the money, they bought a sheltered flat and allowed their mother to live in it rent free.
When the mother eventually needed to go into a home she obviously had held
no assets for a long time ..... Bingo!
Flat then sold using sons & spouses annual CGT allowances.
Its all very simple, until a point in time you can do whatever you like as they're family assets, its only when the point comes where a home is needed that there are issues and that can be planned for in the way described. Its nuts to do otherwise and a I said we did similar...... I'm rather mystified (no I'm not - it's P.H.
) as to howwe've got from the thread title to postmen's uniforms
.My 'friend's' situation was:
Mother sold family home, gifted her sons & their spouses the money, they bought a sheltered flat and allowed their mother to live in it rent free.
When the mother eventually needed to go into a home she obviously had held
no assets for a long time ..... Bingo!
Flat then sold using sons & spouses annual CGT allowances.
It is of course dependant on the family not having alterior motives, which 99% wont its just unfortunate the legal profession raise scaremongering examples of the 1% to worry everyone else.
I would also point out that 99% of elderly parents want the best for their children and to leave a legacy which hasn't been destroyed by care home fees.
^^^ Maybe the ducking and diving will work - maybe it won't.
V6Pushfit said:
Its nuts to do otherwise....
Well, so you say. A number of significant risks have been identified in this thread.V6Pushfit said:
its just unfortunate the legal profession raise scaremongering examples of the 1% to worry everyone else.
What possible reason could there be for professional advisers to be "scaremongering"? They seem to make a good living from helping people with prudent financial advice and tax avoidance.Muzzer79 said:
Imagine if you were 80 years old and needed a heart bypass. You rock up to the hospital, to be told that you need to sell your house or other large value possessions to pay for it.
/\ This. Re. the morality issue; is it right/moral that if your chronic incapacitating illness is is diagnosed as Dementia,
as opposed to other chronic illnesses that would entitle you to NHS care, - you're on your own?
Elderly said:
Muzzer79 said:
Imagine if you were 80 years old and needed a heart bypass. You rock up to the hospital, to be told that you need to sell your house or other large value possessions to pay for it.
/\ This. Re. the morality issue; is it right/moral that if your chronic incapacitating illness is is diagnosed as Dementia, as opposed to other chronic illnesses that would entitle you to NHS care, - you're on your own?
Especially the moment Dementia or Alzheimers is heard, the price doubles (at least!)
Elderly said:
is it right/moral that if your chronic incapacitating illness is is diagnosed as Dementia, as opposed to other chronic illnesses that would entitle you to NHS care, - you're on your own?
In how many countries of the world are old age and related conditions eligible for a free ticket to indefinite stay in hospital?The state safety-net is a safety-net. It's not a route to "I've spent all my money having a good time/given it away to my kids so now the rest of you have got to look after me....".
IMO over the coming decades this issue will be increasingly under the spotlight.
Ozzie Osmond said:
Elderly said:
is it right/moral that if your chronic incapacitating illness is is diagnosed as Dementia, as opposed to other chronic illnesses that would entitle you to NHS care, - you're on your own?
In how many countries of the world are old age and related conditions eligible for a free ticket to indefinite stay in hospital?The state safety-net is a safety-net. It's not a route to "I've spent all my money having a good time/given it away to my kids so now the rest of you have got to look after me....".
dementia is not always age related.But where do you stop ..... do you say that a person who requires treatment for a chronic smoking related disease (self inflicted?) or somebody who injures themselves say skiing or participating in club Motorsport, should they somehow have to finance their own medical treatment (iirc you were asking about trackday insurance for your car - you appear to see that as a risk worth insuring but what if unfortunately you were injured in the same incident?).
And people who require expensive medical procedures and subsequent care have not necessarily spent all their money having a good time.
I pay for my own private medical insurance, if I have to claim on it and not draw on the NHS's resources funded by the taxpayer, should I be entitled to some kind of tax rebate?
Ozzie Osmond said:
In how many countries of the world are old age and related conditions eligible for a free ticket to indefinite stay in hospital?
The state safety-net is a safety-net. It's not a route to "I've spent all my money having a good time/given it away to my kids so now the rest of you have got to look after me....".
IMO over the coming decades this issue will be increasingly under the spotlight.
It shouldn't be means rested full stop. That would level the playing field and make it entirely fair all round. Care homes are 'free' in Scotland and should be here.The state safety-net is a safety-net. It's not a route to "I've spent all my money having a good time/given it away to my kids so now the rest of you have got to look after me....".
IMO over the coming decades this issue will be increasingly under the spotlight.
Why should someone work and pay taxes all their life to have the savings from that work ring fenced and taken? It's ridiculous.
Your comment about having had a good time/given it away is rather disrespectful I must say. What people do in their lifetime is up to them and if that comment is taken in reverse it would be "I've never worked or contributed to society or paid taxes or saved my benefits payments so the state can carry on funding me". Why should people like that have an advantage?
V6Pushfit said:
...I would also point out that 99% of elderly parents want the best for their children and to leave a legacy which hasn't been destroyed by care home fees.
this is a good valid point.It's in our nature to want to help our children and with property prices the way they are, it's probably their only chance of owning their own house. Who would not want that for their offspring?
When it's my turn, I'm going to make sure that all my wealth (very limited) will be gifted to them long before I need any form of care. And, to be honest, if I do need a care home, then chances are I would have probably lost all my marbles anyway, so I won't even notice what sort of care home it is!
They can stick me anywhere.
Countdown said:
Radical suggestion - how about the kids caring for their own parents? Perhaps using the free money they're getting to make their parents' last few years a bit more comfortable?
Would you give up your job, your home and your social life to look after your parents? Move your wife & kids into your parents/your in laws home? Then having given up your home & job; put your life on hold until that house is sold so you can start again?That's what we did, we were lucky that my brother wasn't working at the time they got sick & could survive on benefits to run his house, until he & his family could move into my parents after Mum died.
Elderly said:
Being picky dementia is not always age related.
But where do you stop ..... do you say that a person who requires treatment for a chronic smoking related disease (self inflicted?) or somebody who injures themselves say skiing or participating in club Motorsport, should they somehow have to finance their own medical treatment (iirc you were asking about trackday insurance for your car - you appear to see that as a risk worth insuring but what if unfortunately you were injured in the same incident?).
And people who require expensive medical procedures and subsequent care have not necessarily spent all their money having a good time.
I pay for my own private medical insurance, if I have to claim on it and not draw on the NHS's resources funded by the taxpayer, should I be entitled to some kind of tax rebate?
Indeed not, the founder of the Beastie Boys died from it on Friday; he was 52. dementia is not always age related.But where do you stop ..... do you say that a person who requires treatment for a chronic smoking related disease (self inflicted?) or somebody who injures themselves say skiing or participating in club Motorsport, should they somehow have to finance their own medical treatment (iirc you were asking about trackday insurance for your car - you appear to see that as a risk worth insuring but what if unfortunately you were injured in the same incident?).
And people who require expensive medical procedures and subsequent care have not necessarily spent all their money having a good time.
I pay for my own private medical insurance, if I have to claim on it and not draw on the NHS's resources funded by the taxpayer, should I be entitled to some kind of tax rebate?
A woman we met at the Alzheimers Society Social Club was 40; my age... That brought it home.
Why about Type 1 Diabetics? Should they have to pay for their insulin etc? After all it's a life threatening condition that's not their fault.
Why should we, who have worked all our lives not be able to leave our house to our children, when Joe Bloggs 2 houses down hasn't worked a day in his life but bought his council house with his benefits, can?
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