For most of us our home is our main asset and its value could put local authority assistance well out of reach. There is a growing trend for the transfer of such property to friends or family or the creation of trusts purely as vehicles to deprive a person of capital to enable them to qualify for local authority assistance.  However, such transactions are not as straight forward as some advisors would like to make out.

A local authority has the power to challenge a person’s right to assistance with all or some of the costs of a care home. Effectively anyone with capital over £12,500 in England and £14,470 in Wales could find themselves having to pay their care home costs in full.
 
As there are a number of pitfalls such drastic action should only be taken after careful and considered advice on all of the potential implications. A failure to do so could have serious implications in the future. Some of the problems you could encounter are:-

- Transfers of this nature are open to challenge by a local authority. If the only reason for the transfer was to escape liability for care home costs a person can be made to re-pay all past costs and will receive no further assistance from the authorities.

- Transfers may disguise capital but they may have serious Capital Gains and Inheritance Tax implications for those who receive them

- Transfers may permanently deprive a person of the security and or control over their own home

- A person might be left unable to access their own assets / capital in the future to meet financial commitments at that time

If you are considering the transfer of property for the purpose of avoiding the payment of care home fees, we recommend that you contact one of our specialist solicitors for professional advice before taking any further steps.

< More news stories