Are you concerned about a possible deprivation of assets when planning or paying for your own or a loved one’s care?

It is essential to note that many of the rules governing Inheritance Tax Planning do not apply when it comes to paying for care.

What Is “Deprivation of Assets”?

When a person deliberately gives away or reduces their money, property or other assets to avoid paying for care costs, it may be considered deprivation of assets.

📌 Tip: Early planning helps avoid problems later. If you’re unsure, ask before acting.

If a local authority suspects this has happened, it may refuse to help fund care or treat the person as if they still own the asset.

Common Examples

  • Giving a home to a child or relative, or adding them to the property deeds
  • Transferring large sums of money or savings
  • Selling property or items for less than they’re worth
  • Putting money into a trust or another person’s name
  • Gifting away money shortly before a care needs assessment

When Might It Be a Problem?

Deprivation is likely to be questioned if:

  • The person needed care or support at the time the asset was given away
  • There was a clear intention to avoid care fees
  • The asset was transferred after care needs became known

Acceptable Reasons

Sometimes, transferring assets is legitimate. It may be considered reasonable if:

  • The person was fit and healthy and not expecting to need care
  • The transfer was part of long-standing estate planning
  • There’s a clear, documented reason not linked to care fees

What Can the Council Do?

If the council believes deprivation has taken place, they can:

  • Treat the person as if they still have the asset (called “notional capital”)
  • Ask the person who received the gift to pay towards care costs
  • Refuse to fund care until a proper financial assessment is made

What Should You Do as a Carer?

✔️ Don’t panic — not all gifts or transfers are treated as deprivation
✔️ Keep records explaining why money or property was given away
✔️ Avoid large gifts if care needs are already known or likely soon
✔️ Get financial advice before making changes to property or savings
✔️ Be honest in any financial assessment

Here is a Useful Summary

Where to Get Help

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