Peter was a retired engineer and a widower. He owned a house worth £650,000, had £300,000 in savings and a pension pot he'd never touched. He assumed inheritance tax was "for rich people" and care fees were something the council dealt with.
What happened
Peter needed nursing care in his late eighties and lived in a nursing home for four years. At around £1,500 a week, his care cost over £300,000, paid from his savings and then from the house.
When he died, his estate was still well over the inheritance tax allowances, especially with his pension now counting. His children faced a six-figure inheritance tax bill on top of everything that had gone on care.
The fallout
- Over £400,000 of Peter's estate went on care fees and tax combined.
- His children had to sell the family home quickly to pay the tax.
- Nobody had ever looked at the two together.
What could have been different
Peter was always going to pay for his own care. But with advice years earlier, his family could have planned for care and inheritance tax together, rather than being caught by both.
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