20/08/2024
Planning for care
With costs of care often being £1,000 per week or more, uncertainty about the future can be a big and very expensive concern for those approaching retirement age, who want to also provide for their children and grandchildren when they pass.
There are rules against ‘deprivation of assets’, which essentially means gifting away assets on purpose when the possibility of care becomes apparent. There is no time limit on these rules, so anyone wishing to make lifetime gifts to family members should exercise caution, particularly if they are already in ill health.
Something that can be done however is will planning. Although this doesn’t protect the assets in terms of the individual themselves needing care, it does prevent assets passing to the surviving spouse on their death and then being fully utilised for that spouse’s care fees.
What you leave to someone other than a spouse in your will should be carefully considered, as generally speaking it won’t be protected from Inheritance Tax unless it falls within your Nil Rate Band (currently £325,000), or qualifies for a relief, such as Business Property Relief (e.g. on shares in a trading company). It is possible therefore that you could end up creating an Inheritance Tax charge for your family on first death, by will planning for care fees.
If this is something you are concerned about or would like to discuss further, please contact our Inheritance Tax expert, Gemma Hedges on 023 8046 1259 or email Gemma Hedges.
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