Selling home for care fees, IHT?
Discussion
Hoping some of you may be able to advise. My grandmother needs to go into a care home, she will self fund, her pensions etc will not cover the fees. Her house is valued at £750K , we could rent it out to subsidise the fees. Or we could sell it and invest the money in savings accounts and use the interest to help with fees.
Our preference is the later as it will be less hassle for me/my mother. My worry is IHT, the home will be left to my mother and her sister, it should end up being IHT free with all the allowances. My main worry, If it is sold before hand, will the extra allowance for a family home be lost?
Our preference is the later as it will be less hassle for me/my mother. My worry is IHT, the home will be left to my mother and her sister, it should end up being IHT free with all the allowances. My main worry, If it is sold before hand, will the extra allowance for a family home be lost?
Edited by TVR Dummy on Wednesday 4th January 08:41
Have a read of https://www.gov.uk/guidance/how-downsizing-selling...
As I understand it, subject to meeting various conditions, a portion of the residence nil rate band may still apply for the value of the old home - there are some worked examples in the guide above that take into account previous husband/wife, etc for any transferrable allowance that might come from them also.
As I understand it, subject to meeting various conditions, a portion of the residence nil rate band may still apply for the value of the old home - there are some worked examples in the guide above that take into account previous husband/wife, etc for any transferrable allowance that might come from them also.
You may have to be a bit careful on this topic and seek out professional help before you do anything.
I hold LPA for an elderly relative and sadly needed to get her into a home.
As her house was her only real asset this meant in order to pay for the nursing home fees - currently running at £55k pa I had to sell her house.
Whether retrospectively this means when she dies ( hopefully not for a good while ) her estate is able to get any IHT relief on whatever amount is left I’m unsure but whether that link helpfully provided gives help on this I’ll have to read through.
The other option on meeting care home fees is to purchase an immediate needs annuity etc but they are very expensive although paradoxically this also reduces the estate liable for IHT.
Selling her house to provide care seemed wrong but once assets were above £23k options appeared somewhat limited.
Best of luck.
I hold LPA for an elderly relative and sadly needed to get her into a home.
As her house was her only real asset this meant in order to pay for the nursing home fees - currently running at £55k pa I had to sell her house.
Whether retrospectively this means when she dies ( hopefully not for a good while ) her estate is able to get any IHT relief on whatever amount is left I’m unsure but whether that link helpfully provided gives help on this I’ll have to read through.
The other option on meeting care home fees is to purchase an immediate needs annuity etc but they are very expensive although paradoxically this also reduces the estate liable for IHT.
Selling her house to provide care seemed wrong but once assets were above £23k options appeared somewhat limited.
Best of luck.
Your local council may be able of offer help, within Derbyshire they will offer a very low interest loan which is against the house and is settled when required. Look at the deferred payment scheme on this link - https://www.derbyshire.gov.uk/social-health/adult-...
I'd have a look at this for further info, I found it very useful, a care home I was looking at for mum passed me this info.
https://www.eldercaregroup.co.uk/care-home-funding
https://www.youtube.com/watch?v=Ovl6svN7wZM
https://www.youtube.com/@EldercareGroup
I'd have a look at this for further info, I found it very useful, a care home I was looking at for mum passed me this info.
https://www.eldercaregroup.co.uk/care-home-funding
https://www.youtube.com/watch?v=Ovl6svN7wZM
https://www.youtube.com/@EldercareGroup
Thanks for the replies. It looks like care home fees will run at around £6k a month. After pensions etc there will be a shortfall of over £3k per month, so we will need to find this somewhere. I doubt she will get any help from LA as she has the house and some savings, not sure if it's even worth asking.
Sorry to press the point - but why are you accepting that the LA have responsibility for her care? Has she been assessed, with your involvement, by the NHS?
You should not accept a section 2 form being issued by the NHS until an assessment has been carried out. You are concerning yourself with how to pay for care rather than whether you should.
Happened to my mum. I read up and after ONE phone call to the NHS I had a letter within 3 days stating that the NHS would pay all her care costs. Most people who need to go into a care home would qualify for NHS CoC. There are 11 measures, you only need to meet 2.
This whole care home cost thing will be the next PPI scandal.
You should not accept a section 2 form being issued by the NHS until an assessment has been carried out. You are concerning yourself with how to pay for care rather than whether you should.
Happened to my mum. I read up and after ONE phone call to the NHS I had a letter within 3 days stating that the NHS would pay all her care costs. Most people who need to go into a care home would qualify for NHS CoC. There are 11 measures, you only need to meet 2.
This whole care home cost thing will be the next PPI scandal.
ziggy328 said:
Sorry to press the point - but why are you accepting that the LA have responsibility for her care? Has she been assessed, with your involvement, by the NHS?
You should not accept a section 2 form being issued by the NHS until an assessment has been carried out. You are concerning yourself with how to pay for care rather than whether you should.
Happened to my mum. I read up and after ONE phone call to the NHS I had a letter within 3 days stating that the NHS would pay all her care costs. Most people who need to go into a care home would qualify for NHS CoC. There are 11 measures, you only need to meet 2.
This whole care home cost thing will be the next PPI scandal.
That's interesting. She was in hospital after a fall, they discharged her after an assement of her care needs, we (my mother) arranged care at her home but it has become obvious she really needs 24 hour care due to her dementia. Hospital did seem keen to 'wash their hands' of the situation. You should not accept a section 2 form being issued by the NHS until an assessment has been carried out. You are concerning yourself with how to pay for care rather than whether you should.
Happened to my mum. I read up and after ONE phone call to the NHS I had a letter within 3 days stating that the NHS would pay all her care costs. Most people who need to go into a care home would qualify for NHS CoC. There are 11 measures, you only need to meet 2.
This whole care home cost thing will be the next PPI scandal.
Do you have a link to any more information?
Edited by TVR Dummy on Wednesday 4th January 18:35
Edited by TVR Dummy on Wednesday 4th January 18:36
alscar said:
Ziggy , reading your replies with interest - one question though - taking your comments how once assessed does the fact that assets held then factor into the equation ?
Surely NHS won’t pay for all the care if someone has a current asset of £750k or I have missed the point ?
If the person is assessed as Section 3 under the Mental Health Act the LA will pay the full amount of care. My wfe was sectioned under this and they paid for 5 years of full care for her.Surely NHS won’t pay for all the care if someone has a current asset of £750k or I have missed the point ?
alscar said:
Ziggy , reading your replies with interest - one question though - taking your comments how once assessed does the fact that assets held then factor into the equation ?
Surely NHS won’t pay for all the care if someone has a current asset of £750k or I have missed the point ?
The key is who has responsibility for her care.Surely NHS won’t pay for all the care if someone has a current asset of £750k or I have missed the point ?
All LA care is means tested which is where the asset questions arise.
If, as most should be, the responsibility of care resides with the NHS, even if the care is delivered by a third party, i.e. a care home then as with all NHS services, it is free at the point of consumption, You could have £30m quid in the bank, the NHS would still pick up the bill.
Ziggy / Phumy , thanks for your replies.
Obviously I’m ignoring any emotional part of what is not an easy conversation ( phumy in particular I’m sorry if my question caused any upset ) but clearly I can see why Ziggy suggested that care home fees could be another PPI of the future.
In my Aunts case the fact that my solicitor was able to agree that she was of sound mind enough to sign the LPA to me infers that perhaps her early onset dementia at the time was not sufficiently poor enough to warrant any such mention of the MHA act although clearly if I had known of what you have posted I wonder if could have approached it all differently.
Obviously I’m ignoring any emotional part of what is not an easy conversation ( phumy in particular I’m sorry if my question caused any upset ) but clearly I can see why Ziggy suggested that care home fees could be another PPI of the future.
In my Aunts case the fact that my solicitor was able to agree that she was of sound mind enough to sign the LPA to me infers that perhaps her early onset dementia at the time was not sufficiently poor enough to warrant any such mention of the MHA act although clearly if I had known of what you have posted I wonder if could have approached it all differently.
alscar said:
Ziggy / Phumy , thanks for your replies.
Obviously I’m ignoring any emotional part of what is not an easy conversation ( phumy in particular I’m sorry if my question caused any upset ) but clearly I can see why Ziggy suggested that care home fees could be another PPI of the future.
In my Aunts case the fact that my solicitor was able to agree that she was of sound mind enough to sign the LPA to me infers that perhaps her early onset dementia at the time was not sufficiently poor enough to warrant any such mention of the MHA act although clearly if I had known of what you have posted I wonder if could have approached it all differently.
There are 11 assessment criteria, cognition is just one of them. Call either the care home manager or the discharge nurse at the hospital and ask for the NHS CoC Checklist assessment of your grandmother. If there isn't one insist one is carried out. A Checklist should be carried out in 14 days. If it goes for full assessment then make sure you attend, and take someone with you. It's never too late to insist this is done to establish where the duty of care for your grandmother resides.Obviously I’m ignoring any emotional part of what is not an easy conversation ( phumy in particular I’m sorry if my question caused any upset ) but clearly I can see why Ziggy suggested that care home fees could be another PPI of the future.
In my Aunts case the fact that my solicitor was able to agree that she was of sound mind enough to sign the LPA to me infers that perhaps her early onset dementia at the time was not sufficiently poor enough to warrant any such mention of the MHA act although clearly if I had known of what you have posted I wonder if could have approached it all differently.
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