I don’t want the State to take my Home!

23rd February 2011
I don’t want the State to take my Home! image

I don’t want the State to take my Home!

This is something we hear on a regular basis but sadly it is not a straightforward matter

1. The actual position

  • If you need to have long term residential care your financial position is assessed and unless you have less than £14,250 you will be required to make a contribution to the cost. If you have over £23,250 you will have to bear all the cost.
  • If you own your own house the value of it is taken into account unless your spouse/civil partner (and in some cases other dependants) is still alive and living there.
  • This usually means that the house is sold and to the extent that the residential home fees cannot be paid out of income, the capital from the sale of the house is used
  • Normally you will receive a monthly bill so the capital is slowly used up. Some people mistakenly think the whole proceeds of sale are taken in the first place. This is NOT the case.

2. Will giving my house away prevent this?

The answer is only “perhaps”.

  • When you fill in the assessment form you will be asked whether you have ever owned your own home and if so what has happened to it.
  • Some local authorities will ignore the fact that you disposed of you house by gift provided it was some time before you go into residential care. That period varies; some use six months, most about two years , but some will disregard the gift however long ago it was made
  • The real issue is whether the gift was made to avoid paying home fees; if so it will probably not work. If the house was given for other reasons – such as a farmhouse that is key to the business it should work.

3. Should I give away my house?

The answer in most cases is “no”.

  • Your house is where you live and if you give it away all sorts of things could happen that mean you could lose your home. If the person you give your house to dies, divorces or gets into debt someone else will own your house and either may not be prepared to let you stay there or may have to sell it to raise cash.
  • Some people try to use trusts to safeguard you in this situation but you need to remember that this can give rise to Income Tax (the pre-owned asset charge); Capital Gains Tax and/or Inheritance Tax issues.
  • Such arrangements can become costly and given that the more complicated the arrangements the more suspicion the Local Authority will have, such costs may not be justified given that the gift may prove to be ineffective anyway.
  • The pre-owned assets charge is a trap for the unwary – this is a complicated area on which you need advice.
  • If you wish to move after having given your house away the person you gave it to may have to pay Capital Gains Tax on part of the proceeds as he/she is unlikely to have principal Private Residence exemption for Capital Gains Tax purposes – again an area where you need advice.
  • Even if the house is not sold till you death there may well still be a Capital Gains Tax charge if the house is then sold. If you had continued to own it no Capital Gains Tax is payable.
  • Remember it is not just the value of the house that is taken into account. If you have bank accounts or investments you could still fail to qualify for any state help and end up paying the fees and taking the risk of not owning your own home and the possible costs that result from that.
  • In summary it may not work, it may be costly, it may have adverse tax consequences but above all it puts your house at risk.

4. Is it never a good idea?

There can be situations where either the risks are worth taking or there is time to plan for example

  • An adult child still lives at home. Here there are risks that that child may lose his/her home and this might outweigh some of the other risks
  • The house may be crucial to a business – such as a farmhouse – and selling it could cause real problems. Again this risk may outweigh the others
  • One spouse may be unlikely to manage if left on his/her own. Making sure the house is in the name of the other and that that person’s will is made correctly could save much or all of the value of the house without undue risk
  • If there are any reasons to suspect that you may need residential care for a considerable number of years this may justify taking some of the risks

Like so many areas “it all depends”. It is however an area where there are real and significant risks and the benefits are not always as clear cut as you might think. It may well be worth investigating but it is not a step that should be taken lightly and certainly not without a full understanding of the pitfalls. Many people have done it and lived to regret it.

If you want advice on this subject please contact one of our Wills, Probate and Trust Team as follows:-

On 01775 722261, or email jane.mawer@maplessolicitors.com,
faye.blair@maplessolicitors.com or jamie.dobbs@maplessolicitors.com

The Will Writing Company Limited image

The Will Writing Company Limited

It has been reported that The Will Writing Company Limited, whose registered office is at Ergo House, Mere Way, Ruddington Fields Business Park, Nottingham, have ceased to practise.

If you made Wills using this company then it is probably worthwhile making contact with them in order to retrieve your Wills. Once you have your Wills you may wish to make an appointment with one of the lawyers in our Wills, Lasting Power of Attorney and Probate Team in order to review your Will to ensure it still accords with your wishes. We also offer a Will storage facility which is free of charge.

To review your Will please contact one of our lawyers in the Wills, Lasting Powers of Attorney and Probate Department:-

Jane Mawer- jane.mawer@maplessolicitors.com
Jamie Dobbs- jamie.dobbs@maplessolicitors.com
Faye Blair- faye.blair@maplessolcitors.com

Or telephone the office on 01775 722261 and ask to speak with one of the team.

Read More


Gemma Mayer LLB

"I would highly recommend Maples Solicitors, especially Gemma Mayer, for any conveyancing work. The level of support and professionalism was excellent at all times. I also felt if I needed to ask or clarify anything that it was not an issue. Buying and selling a house is stressful enough, but Gemma helped me through it step by step."

Anita Toal LLB BA

"I think you are brilliant. You can use my comments above. You are efficient, friendly and quite clearly very good at what you do. Mainly you don’t leave people hanging around too long for." "So easy to talk to her and she understood what I wanted. She put me at ease and I cant thank her enough"

Daven Naghen LLB

"Daven provided an excellent service, from attending the first interview with me to the final court appearance. He filled me full of confidence that he would defend me to which he did and come out with an excellent outcome in view of my position that I had put myself in."

Faye Blair LLB

Faye was excellent, sensitive and acted very well to the time constraints we faced. Great service and dealt with compassion at such sad times made the process less painful very professional.

Jamie Dobbs ACILEx

Over the last forty years I have cause to deal with many law firms both in a personal and professional capacity, including some ‘top’ London Companies. In all of those dealings I have never found anyone as proactive and so willing to offer help and advice as Jamie Dobbs. During the last two years Jamie guided my parents through the completion of Lasting Powers of Attorney. Helped myself with the use of the LPA and recently dealing with Probate and Estate Administration following their death.

Mike Pepper MA

This is the second time we have used Mike Pepper at Maples Solicitors in the sale of our house. We cannot praise Mike enough for the highly efficient and professional service that he has provided us with. He is by far the best solicitor we have ever worked with, and the service that he has provided us with has gone far and beyond anything we have ever experienced. We have found the whole process to be a very relaxing experience.

Claire Smith FCILEx

Claire Smith has been amazing in every way. I highly recommend her and I am so grateful for all her help. She’s professional on all levels, reliable, extremely organised and I will be recommending her to everyone. I’m very lucky to have had her representing me and I can’t thank her enough. She is an asset to Maples. Thanks so much Claire!

Anita Zaborniak

We found it a pleasure to deal with Anita Zaborniak, she was most helpful and informative and kept us up to date with the progress of the purchase of our new home. If we were to move again we wouldn’t hesitate to use Maples again.