Care home fees
Discussion
My mum is in a care home funded by herself due to advanced Alzheimer's, Dad remains fit and well and living in the martial home. His will leaves his half of the house to myself, sibling and his grandkids/great grandkids so all good.
My question is mum has enough money in the bank to fund around another two years of care home fees before she is eating into the equity of her half of the martial home. With house prices rising, would myself and sibling be better off 'purchasing' from my mum her half of the house and depositing that money as cash for her care home fees so she no longer owns half the house? I know a charge can be put on the house for her half for when both parents are deceased and repaid but assume this would be not only charged with interest but do they put a monetary value charge on the house or a percentage ownership because if a percentage and house prices going up, we will need more money raised to retain the house which is what we really want.
This home has been in the family over 50 years and we want it for my parents great grandkids to grow up in, so retention of the house as cheaply as possible without paying too much interest or inflation is our aim.
My question is mum has enough money in the bank to fund around another two years of care home fees before she is eating into the equity of her half of the martial home. With house prices rising, would myself and sibling be better off 'purchasing' from my mum her half of the house and depositing that money as cash for her care home fees so she no longer owns half the house? I know a charge can be put on the house for her half for when both parents are deceased and repaid but assume this would be not only charged with interest but do they put a monetary value charge on the house or a percentage ownership because if a percentage and house prices going up, we will need more money raised to retain the house which is what we really want.
This home has been in the family over 50 years and we want it for my parents great grandkids to grow up in, so retention of the house as cheaply as possible without paying too much interest or inflation is our aim.
Yes, you can certainly buy half the house.
Bear in mind,
It needs to be done at market value so that she's not deliberately impoverishing herself and to avoid future tax complications.
The buyer(s) may need to pay the enhanced rate of Stamp Duty if it's a second property.
The buyer(s) will no longer be "first time buyers" if/when another property is bought.
The buyer(s) half of the house will be subject to the Capital Gains Tax regime if it's not their main residence. N.B. enhanced tax rate on residential property.
Bear in mind,
It needs to be done at market value so that she's not deliberately impoverishing herself and to avoid future tax complications.
The buyer(s) may need to pay the enhanced rate of Stamp Duty if it's a second property.
The buyer(s) will no longer be "first time buyers" if/when another property is bought.
The buyer(s) half of the house will be subject to the Capital Gains Tax regime if it's not their main residence. N.B. enhanced tax rate on residential property.
Too many variables for an easy answer, but unless you are choosing to pay for an idyllic country house that costs outrageous amounts, its worth revisiting the funding situation, especially if she is reaching the end of her capital, and he still lives in the house. In some circumstances, some elements of care will be funded by the local authority when she reaches a certain level of capital. You will be expected to fund the difference though. Deprivation of assets is something you want to tread very carefully around, so any idea of purchasing her half on the cheap is a non-starter. Be aware that the idea of his half coming via the will is a bit of a sod if he follows into a home. https://www.alzheimers.org.uk/get-support/legal-fi...
If your dad is still living in their jointly-owned house, it is excluded from the means test so there shouldn't be any question of it eating into her share of the equity. Once her assets (excluding the marital home) are below £23,500 she will be eligible for assistance from the state.
That may not (probably won't) cover the full cost of a private home, but it should at least give a bit of breathing space and/or some other options.
That may not (probably won't) cover the full cost of a private home, but it should at least give a bit of breathing space and/or some other options.
First does mum have capacity to make the financial decision to sell you her half?
If she has capacity to agree to sell you her half that could be viewed by the local authority as misappropriation of funds in the future.
From memory while dads alive and living in the house it should not be taken into account as capital.
Be very very careful. Get legal advice from someone who specialises in this are. It’s highly complex and what can seem straight forward may not be.
If she has capacity to agree to sell you her half that could be viewed by the local authority as misappropriation of funds in the future.
From memory while dads alive and living in the house it should not be taken into account as capital.
Be very very careful. Get legal advice from someone who specialises in this are. It’s highly complex and what can seem straight forward may not be.
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