Care for our relatives is an issue that many of us will have to deal with at some time during our lives, whether that is for a young child, an elderly relative or anyone in between. It is something that is difficult to anticipate, and the level of care required is almost impossible to predict. What is more predictable is that the majority of people when first presented with the situation of a relative needing care, will not know who or where to turn to, what the process is for finding care and when, where and how much the state will pay.
Where possible, planning for the eventuality should be undertaken earlier rather than later, as the financial consequences of making the wrong decision at the wrong time could be significant. Local Councils will invariably look at any financial transactions that have taken money out of someone's estate to ensure that their has been no 'deprivation of capital'. That is the reduction in the value of someone's assets to gain additional funding from the council.
There is also the added consideration of whether the relative in need of care is eligible for Continuing Healthcare under the NHS, rather than using the assets they have built up over a lifetime to pay for their care. This depends on a detailed assessment of the individual in a number of areas and our experience has been that this can be a lengthy process, although for people who have a rapidly deteriorating condition there is a fast track tool. Even if your relative is not eligible for Continuing Healthcare, they may still be eligible for NHS Nursing Healthcare.
These issues when considering care can have an impact on the planning for inheritance tax, and so the two can be closely linked.
None of us want to pay any more to HMRC than we have to, and most of us contribute to this quite significantly during our lifetime, working hard in the process for the assets we build up. With careful planning we can look to reduce the amount of tax that is paid to the revenue on death
We have many years experience and as a result significant knowledge of the issues surrounding care funding and ongoing inheritance tax planning. We would be delighted to investigate and advise clients on these two difficult and important areas of financial planning