Care home costs
Discussion
We are in the process of making the decision to put my father, who has Alzheimer's, into a care home. For the last year he has been living in his own flat with a live-in carer but he's got to the stage where she sadly can no longer care for him.
His financial situation is reasonable - if we can let out his flat for say £600 pcm and contribute from dividend payout and pension, he's probably got another ten years before he'd need to sell the flat which is worth maybe £100k (no mortgage).
My question is, given this new income stream, what hmrc declarations does he/i need to make and will he be required to pay additional tax on this rental income?
Advice appreciated!
His financial situation is reasonable - if we can let out his flat for say £600 pcm and contribute from dividend payout and pension, he's probably got another ten years before he'd need to sell the flat which is worth maybe £100k (no mortgage).
My question is, given this new income stream, what hmrc declarations does he/i need to make and will he be required to pay additional tax on this rental income?
Advice appreciated!
From my experience of this I'd say that despite his mental state, as far as HMRC are concerned he's still a normal human and they will be expecting tax as usual. The rental income is still income and taxable. Not offsettable against care home fees unfortunately.
Sadly dementia is not regarded by the State as a condition and does not warrant any tax breaks or free treatment.
The only financial benefit I can think of from his move will be the saving from having to run his own house, so he won't be paying Council Tax, utility bills, food bills etc.
Sadly dementia is not regarded by the State as a condition and does not warrant any tax breaks or free treatment.
The only financial benefit I can think of from his move will be the saving from having to run his own house, so he won't be paying Council Tax, utility bills, food bills etc.
Bigbox,
I'm sorry to hear your news. You may wish to look at funding long-term care as well. The state will take some assets into account but not others. A single premium investment bond won't excite the state radar but an ISA will for instance. Without engaging in deliberate deprivation, try and financially plan ahead as well as ticking the HMRC boxes. Income from the bond is taxed, but it could provide more income for your dad to enjoy his later years.
More pros and cons, and more options:
https://www.moneyadviceservice.org.uk/en/articles/...
I'm sorry to hear your news. You may wish to look at funding long-term care as well. The state will take some assets into account but not others. A single premium investment bond won't excite the state radar but an ISA will for instance. Without engaging in deliberate deprivation, try and financially plan ahead as well as ticking the HMRC boxes. Income from the bond is taxed, but it could provide more income for your dad to enjoy his later years.
More pros and cons, and more options:
https://www.moneyadviceservice.org.uk/en/articles/...
Bigbox said:
His financial situation is reasonable - if we can let out his flat for say £600 pcm and contribute from dividend payout and pension, he's probably got another ten years before he'd need to sell the flat which is worth maybe £100k (no mortgage).
I'm sorry to hear of your father's situation, but you should bear in mind that the average 'stay' in a care home is approx. 18 months, from entry to final departure. There are lots of things you can do to extend this timeline, like regular visits, checking his medications and dosages, taking him for regular days out, etc, etc. But you need to be realistic on the length of time he will be in care - how old is he now, and what is the state of his general health, other than Alzheimer's ?Simpo Two said:
From my experience of this I'd say that despite his mental state, as far as HMRC are concerned he's still a normal human and they will be expecting tax as usual. The rental income is still income and taxable. Not offsettable against care home fees unfortunately.
Sadly dementia is not regarded by the State as a condition and does not warrant any tax breaks or free treatment.
The only financial benefit I can think of from his move will be the saving from having to run his own house, so he won't be paying Council Tax, utility bills, food bills etc.
I read that it seems the EU wants to classify obesity as a disability. If that happens you watch the public liability rocket, you watch the calls for the state to intervene then rocket and what's the bet it'll be in the form of a new, erm.. tax? Sadly dementia is not regarded by the State as a condition and does not warrant any tax breaks or free treatment.
The only financial benefit I can think of from his move will be the saving from having to run his own house, so he won't be paying Council Tax, utility bills, food bills etc.
Bigbox, I don't know how true this is so you'll need to check, I've been told that if he is properly diagnosed with Alzheimer's then the state will pay all his care home fees no matter what his savings and home are worth, the only problem with that is It's difficult to get a proper diagnosis plus you wont get much choice where he goes. Care home fees for people with Alzeimer's seem to be a lot more than if he was just an ordinary elderly person.
We've just sold the MiL's house and together with her savings and pensions she'll have enough money to last her out if she goes for another 12 years so selling was easier than renting plus all tax is black and white.
Although It's a bit mercenary you might be thinking about your inheritance so renting may be a better option. Have you got court of protection or power of attorney over his affairs, you'll need this to stop anyone else taking his house if his money runs out.
We've just gone through all this over the past year so if you need any basic information let me know.
We've just sold the MiL's house and together with her savings and pensions she'll have enough money to last her out if she goes for another 12 years so selling was easier than renting plus all tax is black and white.
Although It's a bit mercenary you might be thinking about your inheritance so renting may be a better option. Have you got court of protection or power of attorney over his affairs, you'll need this to stop anyone else taking his house if his money runs out.
We've just gone through all this over the past year so if you need any basic information let me know.
Sorry not responded earlier, everything is a bit manic at the moment, but I am grateful for all responses - have just come across something called NHS continuing care which I'm going to try an look into when I get a minute
Jagracer - I've just been shown an article on the daily mail (predictably) indicating that costs can be reimbursed retrospectively which may be worth looking up in your case
Jagracer - I've just been shown an article on the daily mail (predictably) indicating that costs can be reimbursed retrospectively which may be worth looking up in your case
I am still chasing an application for Continuing Care, although my relative passed back in March. You may want to research legal precedents in Coughlan case although you're likely to have a fight on your hands. I'm currently being threatened with legal action, as the local authority refused to allow CC in our case, although an appeal has been lodged. I've never known such a confusing process though and can see why so many people simply accept what they're told and pay up. It's not as if relatives aren't going through enough!
jagracer said:
I've been told that if he is properly diagnosed with Alzheimer's then the state will pay all his care home fees no matter what his savings and home are worth
News to me. My mother was in the dementia wing of a care home for 3.5 years and only qualified for NHS funding for the last week (by which time she was a blind paralysed shell) - and that was with the care home manager helping me push for it. £80K out, £400 back. Meantime the chav I'd misguidedly let her house to was loading up on bennyfits and taking holidays with the rent money. Piss, boiled.jagracer said:
Bigbox, I don't know how true this is so you'll need to check, I've been told that if he is properly diagnosed with Alzheimer's then the state will pay all his care home fees no matter what his savings and home are worth, the only problem with that is It's difficult to get a proper diagnosis plus <b>you wont get much choice where he goes</b>. Care home fees for people with Alzeimer's seem to be a lot more than if he was just an ordinary elderly person.
.
We were offered homes I wouldn't put mother in and in the end we put her in a BUPA dementia home I mean its HER money she should have what it can buy her. 6 years on we are trying to get something / anything back towards the near £300k it cost..
We have asked for what it would have cost to put her in a council home nothing more - they have 3 years to prepare this and put it to panel!
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