Beware of banks advice to elderly clients

Despite the lack of evidence in writing, there has been some shocking instances of banks advising elderly clients to consider selling their home, then giving the proceeds to the children such that if they had to go into care, they would ?not? lose the value of the house to pay care home fees. This is completely wrong.

In fact all it is likely to do is to transfer the liability for the care fees on to the children. The ?deliberate deprivation of capital rules? in the CRAG rules are quite clear on this.

Not only that, if the elderly client continued to live in the property, ?Pre Owned Asset Tax? rules will apply, and this is likely to kick-off an HMRC investigation.

As the gift of money would be classed as a 7-year PET (potentially exempt transfer) that failed, it would also allow the authorities to go back and look at other PET?s done the 7 years before that, so 14 years of PET?s could easily come into the frame for means testing.

Of course, the key here is the complete lack of evidence to support this accusation but this blog is merely here to make you aware of the issue – that is all.

Talk to us if you would like sound inheritance planning advice, contact us or call us on T. 0116 278 4862 now.

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