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Here our trained solicitors share help and guidance on the topic of gifting a family home and the legal repurcussions of doing so: 

Contents Summary

  1. Introduction
  2. For and Against Outright Gifts of the Family Home 
  3. Reasons for Caution About Making Outright Gifts of the Family Home 
  4. Other Issues When Considering Gifting 
  5. Transferring the Family Home into a 'Flexible Life Interets Trust': A Family Trust
  6. Standard Guidance on the Cost of Long Term Care More...

1. The Local Authority

When a person requires residential accommodation, an assessment of their finances is required in order to determine how the accommodation will be paid for. With the costs of care home accommodation ranging from £400 to £800 per week on average it is not surprising that the rules relating to charging cause much controversy.

The following discusses the rules in Wales for charging for care home accommodation. Although similar, there are separate rules relating to charging for care home accommodation in England .

If a person has capital over £22,500 and is not eligible to receive NHS Continuing care funding they are considered to be ‘self funding,’ meaning that they have to pay the full cost of residential accommodation. There are complex rules relating to what capital is taken into account in order to assess whether a person is self-funding. Some types of capital may be disregarded. For example, a property will not be taken into account for the first twelve weeks that a person is in a Home. This means that, where a person’s main asset is their property and their savings are under £22,500, he or she will not be ‘self funding’ for the first twelve weeks. Furthermore, a property continues to be disregarded if it is occupied by:

1. the resident’s partner; or
2. a relative who is aged 60 or over; or
3. a relative aged 16 or under and a child whom the resident is liable to maintain; or
4. a relative who is incapacitated.

Even if a person is self-funding, there is a still a duty on the Local Authority to provide advice, guidance and assistance on the type of care they require and services available.

If a person has capital amounting to less than £22,500 then their income (apart from a small personal allowance) is paid towards the cost of their care fees and the Local Authority pay the remaining cost. Although this would normally mean that the Local Authority funds the majority of the care home fees, the resident’s wishes and preferences over choice of accommodation should still be taken into account as long as:

1. the accommodation appears to the Authority to be suitable; and
2. the cost of making the financial arrangements would not require the Authority to pay more than it would usually expect to pay having regard to the assessed needs.

Where a person’s preferred accommodation is more expensive than the accommodation proposed by the Authority then he or she may require the Authority to provide that accommodation subject to a third party (often a relative) paying the difference. The ‘top-up’ is the difference between the cost which the Authority would usually have expected to pay for someone with the individual’s assessed need and the full standard rate of the accommodation that the resident prefers. However, the Authority must not set arbitrary ceilings on the amount they would pay and relatives should not routinely be required to make up the difference between what the Authority will pay and the actual cost of the Home.

2. The NHS

There is an overlap between the duty of the Local Authority to provide care home accommodation and the duty of the NHS.

The NHS has certain duties to persons who are the responsibility of the Local Authority or who are self funding. It is the responsibility of the NHS to provide, where necessary, community health services to residents of Local Authority and independent residential care homes on the same basis as for those who live in their own home. For example, the provision of district nurses is paid for by the NHS.

The NHS also has a duty to pay for the cost of providing nursing care by a registered nurse in a nursing home. Consequently, in Wales, every nursing home resident should receive the same contribution towards their fees from the NHS regardless of how much capital they have (in Wales the contribution is currently £117.66 per week).

Furthermore, where a person’s primary need is for healthcare, there is a duty on the NHS to accommodate people in care homes under continuing NHS healthcare guidelines. If a person is assessed as requiring NHS continuing care then the full cost of their care home fees will be paid by the NHS and this does not depend on whether or not someone has capital over £22,500.

Whether a person is eligible for NHS continuing healthcare is often the subject of debate. The Local Health Boards have assessed residents as only requiring NHS funded care (i.e. the £117.66 per week contribution from the NHS) rather than requiring continuing NHS healthcare. Subsequent independent reviews have then assessed the same person as actually having continuing healthcare needs so that the NHS should have paid the full cost of the care home fees rather than the Local Authority or self-funding resident.

At the heart of the issue over who is responsible for paying for the accommodation is the distinction between social care and health care. In the case of Coughlan the Court of Appeal held that the Local Authority can only lawfully fund low level nursing care. The Court indicated that the decision as to whether the NHS or the Local Authority provides the care depends on the overall quality and quantity of nursing required, not the type of nursing services required.

The following conditions may amount to a person having unpredictable, complex and intense health needs which would make him or her eligible for NHS Continuing care funding:
1. poor mobility
2. inability to self-medicate,
3. breathing difficulties,
4. poor sleeping pattern
5. poor skin tissue
6. swallowing difficulties,
7. inability to communicate and express needs
8. high level of confusion, disorientation
9. diagnosis of mental illness or psychiatric illness
10. challenging behaviour, aggression or anxiety
11. risk of causing harm to self or to others
12. being prone to infections


It is not easy to summarise the rules relating to charging for care home accommodation and professional advice should be taken if you are in doubt. However, as a general rule, where the primary need is a health need, then the responsibility to pay the care home fees is that of the NHS, even where the individual has been placed in a Home by the Local Authority or has capital over £22,500. Where the person’s needs are only ancillary or incidental to the provision of accommodation that the Local Authority is under a duty to provide then the Local Authority is responsible for the care home fees subject to a person’s income and capital. Even if the person is not eligible for NHS continuing care funding he or she may still be eligible to receive a weekly contribution to their fees from the NHS if he or she resides in a nursing home and requires the services of a registered nurse.

If any of the above information indicates that you or a member of your family have been incorrectly assessed/charged then please contact us on 01633 227960 or email

This article deals in general with a complex subject. No responsibility for any loss by any person as a result of acting in reliance on this article can be accepted by this firm. The article is written on the basis of the law as at 1 March 2009.

If you have an elderly relative who is resident in a residential/nursing home it may well be that you have been asked to contribute towards the cost of their care.

Claire Davis, Solicitor and Partner in charge of the Elderly Client Department at Howells Solicitors with offices in Cardiff, Newport, Swansea, Caerphilly, and Talbot Green believes that, in many cases, these charges are being sought without foundation and that, in some circumstances, the Local Authority are ignoring their obligation to meet the higher charges.

Claire says “The area of third party contributions is complex but it is often the case that an individual is placed in a home, and funded by the Local Authority, where the weekly charge is higher than the contract rate paid by that Council. In such circumstances investigation needs to be made as to whether or not there were any other suitable alternative homes which would provide the same level of care in the best interest of the individual concerned. Where another suitable home is available and is cheaper then it is quite legitimate for the Council to seek what is known as a third party contribution from the liable relatives of the resident. However, in many cases, there may be substantial arguments as to why the home, chosen by the Local Authority, is the only home suitable for the resident’s needs.

Where an individual is being funded, by the Local Authority, there are rules and regulations which make it quite clear that the Local Authority cannot demand “top up” fees from a liable relative unless the proper procedures have been followed.

Claire continues “It has come to my attention, over recent months that, in addition, there are individuals (who have been resident in homes for some time and are now being funded by the Local Authority after their savings have been depleted to the required level) who are not receiving the required assessments as to their needs in order to ensure that the third party fees are being charged legitimately.”

Care homes are finding it increasingly difficult to balance their books when the Local Authority rate is substantially below that which it takes to operate and manage a home efficiently. Without addressing the issues generally there will be many more homes that will close or many more individuals and their families who are applying towards the care of their loved one when they should not be doing so

Claire concludes “I am also concerned at the number of individuals who are very probably paying substantial top up fees (I have heard of one case of £90.00 a week) where the Local Authority have either failed to undertake an assessment or have simply relied upon the “ignorance” of those concerned on the basis that relatives will not want the risk of their loved ones being moved and will simply choose to pay even if this causes financial hardship?”

If you feel that you are being asked to contribute towards the care of your loved one and that you may have cause to dispute that claim and require further advice on the matter then Claire can be contacted at Howells on 01633 227960 or by email at

Planning for the future can be a daunting task and, whether you’re making a Will, organising nursing home care, or calculating Inheritance Tax, there are some important need-to-knows. Thankfully, law firm Howells has provided some answers to those burning financial questions that can often leave you scratching your head in bemusement.

1) How much do I have to leave before I’m required to pay Inheritance Tax?

The Nil Rate Band is currently £325,000 for each individual. It is unlikely that this will be increased before 2015. Above this figure tax is payable at 40% with certain exceptions.

2) If my spouse or civil partner did not use their entire Nil Rate Band, can the balance be carried over to my estate?

For deaths after 9th October 2007, all of the unused proportion of a deceased spouse’s / civil partner’s Nil Rate Band can be transferred to the individual's surviving spouse / civil partner for use on their death.

3) Should I still make a Will even if my estate does not exceed the Nil Rate Band?

You should make a Will to ensure that your wishes are honoured and your belongings will be distributed as you want when you die. Even if your estate is less than the Nil Rate Band you could still find that not all your estate passes to your spouse / civil partner and could even pass to people you do not know or like. A Will can also help protect your estate in the event of a second marriage or a survivor requiring some form of residential or nursing care.

4) Do I need a solicitor to make a Will?

Although it is possible to make a homemade Will or seek advice form unqualified and unregulated Will Writers, it is highly advisable to take professional advice, particularly to ensure that the formalities are observed. Particular difficulties can be experienced where there are children, particularly minor children, children from previous marriages, or mental health issues where trusts might be required. Solicitors are trained and experienced in giving advice and guidance on such matters, as well as implementing solutions to difficulties which arise.

5) Can I do anything in my lifetime to take better legal care of myself?

Wills do not take affect until death, but it may be advisable to consider making a Lasting Power of Attorney so that someone you trust can look after your financial affairs in a way which you would wish in the event of you becoming incapable of managing your affairs. This can also be extended to other areas of your life, such as medical treatment.

6) If I require care do I have to pay?

It is important that you or your family are aware of your rights when someone is admitted to a care home or requires some form of care as you may be entitled to financial assistance If someone needs 24-hour nursing care because their health care needs are, amongst other things, complex or unpredictable, NHS care is free at the point of delivery, whether you’re in hospital, at home, or in some form of nursing care. If that is the case the local health board should be responsible for costs and not the individual concerned. It is even possible to raise a challenge against the NHS after someone has died if it becomes clear that they were paying for their care when they should not have been.

Where nursing care is not an issue you should still make sure that you are not paying too much and that you are receiving all the benefits to which you may be entitled. Where you have less than £22,500 in capital then the council will assist in the payment of your charges. (2011/2012). This figure is “protected capital” and cannot be used towards your fees.

7) How can I ensure preservation of assets if I am already paying nursing home fees or will likely need to in the future?

Although in this scenario it is often impossible to deprive yourself of assets, advanced planning can sometimes help. However, it is important to remember whose money it is, and it may be unwise to transfer ownership of homes or cash as it may limit your options when choosing a suitable care home.

8) What can I do about it if I am concerned about these matters?

Call Claire Davis or her team at Howells Solicitors on 01633 227960.

Howells Solicitors is one of the leading law practices in South Wales, providing a full range of legal services to both corporate and individual clients.

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