informed choice

Asset Deprivation

Local authorities will investigate whether assets or income have been given away, or sold at less than their market value, in order to qualify for a benefit.

If such a gift or sale is proven, an attempt will be made to recover them.

If assets are transferred within six months of needing care, the local authority has powers to recover these assets directly from the recipient or, they can count them as notional capital and treat them as
if they had never been given away.

If assets were given away more than six months before needing care, they can still be regarded as notional capital depending on the motivation of the person who made the gift.

At this stage, however, the local authority cannot go back to the recipient, but has a right to claim it from the donor.

For assessment purpose the assets will still form part of that individual’s capital.

However, if it can be demonstrated that the gift was made for other reasons such as inheritance tax planning, the capital gift or assignment should be disregarded.

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