Gifts from income - future care home fees

[Corvid]

My elderly MIL wants to give some of her monthly income to one of her children to help them out. Her other 2 children do not need support but she would like to give them a similar amount so that they are all treated equally. We are talking probably about £200 - £250 per person per month, so a total of about £750 max. She will have enough monthly income left for her needs and will not reduce her savings or investments.

IHT will not be payable on her estate.

DAK if giving away this excess monthly income could cause problems if she has to go into care?

Corvid.

[Clitheroekid]

DAK if giving away this excess monthly income could cause problems if she has to go into care?

I can't see that it would at all. The crucial point is that you said:

She will have enough monthly income left for her needs and will not reduce her savings or investments.

The rules only apply to gifts of capital, not gifts of income. She is not, therefore, depriving herself of assets, which is the test applied.

It would only be if she started giving away large chunks of capital that the risk might arise, though even then the risk is often far more theoretical than real, as local authorities these days don't have the resources to pursue such claims unless they're absolutely cast iron.

[AJC5001]

My elderly MIL wants to give some of her monthly income to one of her children to help them out. Her other 2 children do not need support but she would like to give them a similar amount so that they are all treated equally. We are talking probably about £200 - £250 per person per month, so a total of about £750 max. She will have enough monthly income left for her needs and will not reduce her savings or investments.

IHT will not be payable on her estate.

DAK if giving away this excess monthly income could cause problems if she has to go into care?

Corvid.

I would expect the £750 to be required to pay for the care, unless the cost of care still leaves the £750 spare.

Adrian