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protecting your assets


If you are at the point where you are now in need of care, there is little you can do to exclude any assets from the Local Authority’s calculation.

If you have assets of over £23,000 (including the value of your home) you will be expected to make use of all of the assets above this limit before the Local Authority will consider paying any of your care fees.

You should however ensure that you are claiming all the benefits to which you are entitled, which will slow down the use of your own assets.

Also, your home will be excluded from the calculation if a surviving spouse or partner lives there. This exclusion also applies if other relatives aged 60 or over are still living in the property.

Assets cannot just be given away to keep them out of the calculation for paying care fees. The Local Authority will deem that you still own any assets given to your children etc, and there is no time limit on when the gifts were made.

For those with time to plan ahead before care is needed, the following factors should be considered, to ensure that your assets are positioned in the best possible way:

  • Keep your savings separate. Local Authorities do not have the right to use the assets of a spouse to fund their partner’s care fees. To ensure that specific investments or savings are disregarded, you should avoid the use of joint accounts etc
  • Consider changing the ownership of your property to ‘Tenants in Common’. Most couples own their property on a ‘Joint Tenants’ basis. This means that on first death, the surviving partner automatically owns the whole of the property – making it impossible for any of the value to be excluded if you subsequently move into care
  • On a ‘Tenants in Common’ basis, each person is able to specify who receives the share of their property on their death (e.g. their children or into a Trust). This will often mean that the surviving partner’s share of the property is disregarded as an available asset for funding care. Your local solicitor will be able to advise you on switching to this basis
  • Inheritance Tax (IHT) Planning. Provided there is a valid financial reason for giving away some of your capital (rather than just to avoid this being used for your care) this will usually be disregarded from your assets. Prudent IHT planning will usually be regarded as a legitimate use of your funds. The following gifts can be made free of any current or future IHT liability, and would therefore be regarding as reasonable planning:
    • Wedding Gifts. Up to £5,000 to each of your children, £2,500 to each grandchild,  and £1,000 to anyone else
    • Annual Exemption. You can give away £3,000 in each tax year
    • Small Gifts exemption. Gifts of up to £250 each, to any number of people each year (including gifts to charities, the National Trust, national museums, the main political parties etc)
    • Certain family trusts