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Care Home Charges & Property

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sunnysue | 21:29 Fri 18th Aug 2006 | Business & Finance
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When I moved in with my husband 19 years ago, we told my mum that she could stay in the property my mum & I owned jointly until she died. My husband and I have a mortgage on our current home. Four years ago my mum signed her share of the property over to my name with a 99 year lease for a peppercorn rent of �1 per year hoping to avoid any problems with inheritance tax in the future as she knew we could have really done with the capital but still allowed her to live there. The problem is, my mother is now in quite poorly health and it is looking like she may need to be placed in a care home in the not too distant future. Will she be able to avoid having to pay care home fees herself. If I charge her a full rent it will affect our child tax credit and also, as I only work part time I am a non-tax payer, but charging rent would bring me into taxable income. The house is worth about �100,000 of which we originally had a 50/50 share before we changed the deeds. Having read other questions on this site, it looks like she may be deemed to have given away her assets even though she sees it as paying us back for the years of living rent free.
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The fact that she has paid no a peppercorn rent will be considered as proof that she has disposed of her assets to avoid tax or other liabilities.

The fact that you have consented to this to avoid your own tax liabilities will not help.

Your mother must have other assets though, which will affect any claims to 'free'care, as inheritance tax does not kick in unless her total estate is worth �285,000 or more. Her share of the house at today's rate is only �50,000.

You need proper advice.

But don't rush in willy - nilly. Take your time to find the right person and prepare all the paperwork in advance of the appointment.
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Do find out how much money your mother is entitled to by law to help with the fees, Panorama had 2 programmes on recently showing how social workers were saying no money was available when some or all of the fees had to be met by social services, regardless of any assets. Social workers should do some sort of assessment and pay for the nursing part of the fees, find the BBC panorama web site, and there are Ombusmans decisions, for some further help.
Like Ethel says find out your rights and don't let anyone stop you getting any help you may be entitled to with the fees

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