Hello and thanks for using Just Answer.
My name is ***** ***** am happy to assist you with your enquiry.
As regards ***** ***** tax, if a party makes a gift, but retains some sort of benefit from it, it is classed as a "gift with a reservation" and HM Revenue will still treat that party as owning the asset which has been gifted for Inheritance tax purposes. Therefore, if you were to gift your property, but remain living there, this would be treated as a gift witrh a reservation, and hence you would not be saving yourselves anything as far as Inheritance tax is concerned.
As regards ***** ***** fees, the state can look at any gifts that you have made, when assessing the amount of capital you have. If they can prove that you have deliberatley given away your property with a view to saving Nursing home fees, they can still treat you as owning the property when calculating the amount of capital you have. Of course, the longer the period between you making a gift and then goinginto a Nursing Home, the harder it is for the state to prove you have made the gift for this purpose, but in theory, they can look back on any gifts you have made during your whole lifetime! There is therefore no guarantee that gifting the proeprty to your sons will save you anything in Nursing Home fees.
There is, however, a way of securing at least 50% of your property from Nursing home fees. You both can "sever the joint tenancy" in the property, meaning that you both own a separate 50% share each in the property. You can then update your Wills, leaving your respective 50% to your sons, with the proviso that the surviving spouse be entitled to remain living in the property for as long as he/she wishes, upon the first spouse's death.
Hence, doing it this way, only 50% of the property will be swallowed up in Nursing home fees, if the survivor were to go into a Nursing home.
A local Wills Solicitor will be able to hep you with the above and will also be happy to discuss the inheritance tax/Nursing home scenarios with you.
I hope this assists and sets out the legal position to you.