"Put the house in the children's names" is the most common idea families have about care fees. It's also one of the riskiest.
What deprivation means
If someone deliberately reduces their assets to avoid or reduce care fees, the council can treat them as if they still have them. This is called deprivation of assets, and the amount is called notional capital. You end up being assessed on money you no longer have.
What councils look at
- Was avoiding care fees a significant reason for the gift or transfer?
- When was it made, and could the person reasonably have expected to need care?
- Was it in keeping with how they normally spent or gave money?
There's no 7-year rule
People often confuse care fees with inheritance tax, where gifts can fall out of the estate after 7 years. For care fees there's no fixed time limit. What matters is the purpose and the timing.
The other risks
Giving the home away can also create capital gains tax for the children, put the home at risk from a child's divorce, debts or bankruptcy, and leave the parent with no security in their own home.
So is there anything families can do?
Yes, but it isn't about hiding assets. Legitimate planning, done early and for genuine reasons, can make a real difference, especially for couples. It has to be done properly, with advice, and recorded carefully.
Thinking about gifting? Speak to a specialist first. Request a call back.
Frequently asked questions
Is there a 7-year rule for care fees?
No. The 7-year rule applies to inheritance tax gifts. For care fees there's no fixed time limit. The council looks at why the gift was made and whether care was foreseeable.
What happens if the council finds deprivation of assets?
It can treat you as still owning the asset (notional capital), so you pay as if you had it. In some cases it can try to recover fees from the person who received it.
Is all gifting deprivation?
No. The council has to consider whether avoiding care fees was a significant reason for the gift, and what the person knew about their likely care needs at the time.
Talk to a specialist
Tell us a little about your situation and a specialist will call you back, usually within one working day. No obligation, and we know these conversations can be difficult.