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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10585
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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My mother in law is now in a care home. She has gifted her

Resolved Question:

My mother in law is now in a care home. She has gifted her property to her daughter and son in law with the deeds transferred to their names. In return they have agreed to pay a portion of the care home fees. Is this legal? If so what are the tax implications?
Submitted: 2 years ago.
Category: Law
Expert:  Aston Lawyer replied 2 years ago.
Hello and thanks for using Just Answer.
My name is ***** ***** am happy to assist you with your enquiry.
There is nothing illegal in what your mother in law has done.
From a general legal point of view, when calculating whether a care home resident is entitled to state assistance with the fees, a party is still deemed to own their property,if it can be shown that they have transferred their property to a third party for the purpose of trying to avoid paying Nursing home fees. In this regard, therefore, your mother in law may still be classed as owning her property when assessing how much capital she has.
As regards ***** ***** implications, there is no tax for the Daughter to pay on the date of the transfer, if no consideration was paid. However, on the basis that they also own their own property, Capital Gains tax may be payable as and when they eventually sell your Mother in law's former property.
For Inheritance tax purposes, the value of your Mother in law's property will be classed as being part of her Estate if she were to die within 3 years of making the gift, and a percentage of its value would be classed as being part of her Estate if she were to die within 3-7 years of making the gift.
I hope this assists and gives you an overview of the legal position.
Kind regards
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