Giving away money or a home before care: deprivation of assets explained

1. Understand the question the assessment is asking

A financial assessment looks at the person’s resources under the rules for the relevant nation and type of care. If an asset has left their ownership, the authority may ask whether the person deliberately gave it away, spent it unusually or changed its form to reduce a contribution. The question is not simply whether a transfer happened, but what the person knew, intended and could reasonably foresee when they made it. Ask the assessor to explain the concern and the rule they are applying.

2. There is no seven-year care-fee safe period

The seven-year period often discussed in family gifting is part of inheritance tax treatment for some gifts. It does not create a deadline after which a council must ignore a transfer in a care assessment. Care guidance asks about purpose and foreseeability, so an older transfer can still be relevant if the facts suggest it was made to avoid charges. Equally, a gift made more recently is not automatically deprivation. Do not rely on a calendar rule or an online promise of a guaranteed safe period.

3. Look at purpose, timing and what was foreseeable

A council may consider whether the person knew they needed care, could reasonably have expected to need it, or understood that a financial assessment might follow. It can examine the timing of the transfer, the person’s health and support needs, what they said at the time, and whether avoiding care charges was a significant reason. Decisions should be based on evidence and the applicable rules. Keep contemporaneous letters, bank statements, care assessments and notes that show the real reason for a decision.

4. Distinguish ordinary spending from unusual transfers

Examples that can prompt questions include giving away a home or large sums, transferring savings into another person’s name, or spending a substantial amount unusually shortly before an assessment. But money used for debts, essential repairs, ordinary living costs or a person’s established way of life is not automatically deprivation. Context matters: an expense that is ordinary for one person may be out of character for another. Keep invoices and a simple explanation of major spending so the assessor can understand it.

5. Ask what a notional capital decision means

If an authority decides that someone deprived themselves of an asset to reduce charges, it may treat them as still having some or all of its value. This is called notional capital. In some circumstances, where an asset was transferred to someone else, the authority may also seek recovery from the recipient under the law that applies. The person should receive an explanation of the calculation, the evidence relied on and how the decision affects the charge. Do not assume that a family member must pay without a clear legal basis.

6. Challenge a decision with evidence

Ask for the decision and reasons in writing, including the amount treated as notional capital and the period covered. Check whether the authority has considered the person’s actual purpose, capacity, needs, ordinary spending and the relevant national guidance. Send evidence in a clear order and ask for a review or complaint using the authority’s process. If the disputed amount is significant, or a recipient is being asked to pay, get independent legal advice before responding or transferring anything further.

7. Treat schemes promising to protect assets with caution

Trusts, home transfers and products described as care-fee protection can have tax, ownership, benefit, family and care-funding consequences. A transfer may also fail to achieve what was promised while leaving the person without control of an asset. Do not act on a sales claim that a particular structure makes assets automatically invisible to a council. Before any major gift or transfer, get independent legal advice or regulated financial advice about the likely consequences.

Common questions