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Is it a good idea to gift property or assets?

Jun 12, 2015

This does seem like a good way to offload your assets to your nearest and dearest, however there are real implications when making gifts to people, both for you and for the person you are gifting your assets to.

If you are considering gifting your property, in an attempt to avoid having to sell it to fund your care home fees, this may not even work, as the government has put in place rules about this type of manoeuvre.

Local authorities, when looking at your funding for care home fees, will ask about previously owned assets to try and ascertain if there has been a ‘deliberate depravation’. This means that you have deliberately made yourself worse off. Timing is everything here and if you can show that you gifted your assets at a time when you did not require care, then you may not be penalised.

However, if the local authority decides when they are assessing your finances that you have gifted your assets to make yourself worse off, they may still include this in their calculations by calling it notional capital.

Not only are care home fees an issue, when you gift your assets there is no going back. Life expectancy is increasing all the time and therefore we are all living longer. If you give away your assets, this could leave you in financial trouble in the future.

Gifting assets may be useful Inheritance Tax planning although there are specific rules regarding this including amounts you can give away without being penalised and whether you can retain any benefit over the asset you have given away.  A common example is giving away your property but still living in it rent free.  This is classed as a ‘gift with reservation of benefit’ and would still fall into your estate for Inheritance Tax purposes on your demise.

Getting professional and specialist advice from a solicitor is crucial to ensuring that you are adequately protected, so call Gareth Horner now on 01264 353411 or email on probate@bsandi.co.uk and we will discuss your options with you.

A. This does seem like a good way to offload your assets to your nearest and dearest, however there are real implications when making gifts to people, both for you and for the person you are gifting your assets to.

If you are considering gifting your property, in an attempt to avoid having to sell it to fund your care home fees, this may not even work, as the government has put in place rules about this type of manoeuvre.

Local authorities, when looking at your funding for care home fees, will ask about previously owned assets to try and ascertain if there has been a ‘deliberate depravation’. This means that you have deliberately made yourself worse off. Timing is everything here and if you can show that you gifted your assets at a time when you did not require care, then you may not be penalised.

However, if the local authority decides when they are assessing your finances that you have gifted your assets to make yourself worse off, they may still include this in their calculations by calling it notional capital.

Not only are care home fees an issue, when you gift your assets there is no going back. Life expectancy is increasing all the time and therefore we are all living longer. If you give away your assets, this could leave you in financial trouble in the future.

Gifting assets may be useful Inheritance Tax planning although there are specific rules regarding this including amounts you can give away without being penalised and whether you can retain any benefit over the asset you have given away.  A common example is giving away your property but still living in it rent free.  This is classed as a ‘gift with reservation of benefit’ and would still fall into your estate for Inheritance Tax purposes on your demise.

Getting professional and specialist advice from a solicitor is crucial to ensuring that you are adequately protected, so call Gareth Horner now on 01264 353411 or email on probate@bsandi.co.uk and we will discuss your options with you.


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