Care fees and your home

When the home is not counted

If someone moves permanently into residential care, the value of their home is generally included in the financial assessment. But it is disregarded entirely while certain people still live there, including:

• a spouse, civil partner or partner
• a close relative aged 60 or over
• a close relative who is incapacitated
• a child of theirs under 16 whom they maintain
• in some circumstances, a former partner who is a lone parent

There is also a mandatory disregard for the first twelve weeks of a permanent placement, which exists to give families time to make arrangements rather than sell in a hurry. And if the stay is temporary rather than permanent, the home is not counted.

These exceptions matter enormously and are routinely missed. Establish which apply before assuming a sale is necessary.

Deprivation of assets

This is the part worth reading carefully.

A local authority can look at whether someone has deliberately reduced their assets in order to reduce what they pay for care. If it concludes that they have, it can treat them as still owning the asset. That is called notional capital, and the person is assessed as though the transfer never happened.

There is no fixed time limit. The seven-year rule people often cite is an inheritance tax rule and has nothing to do with care funding. A local authority can look back at a transfer from many years earlier if the circumstances suggest intent.

What they look at is timing and motive: was care foreseeable at the time, what was the person's health, was there any purpose to the transfer other than reducing assessable capital, and did they get anything like market value.

In some circumstances an authority can also pursue the person who received the asset.

Arrangements that do not work

Several things are marketed, sometimes aggressively, as ways to protect a home from care fees. Be sceptical of all of them.

• Giving the house to the children while continuing to live in it. This is the classic. It fails on deprivation of assets for care purposes, and it also fails for inheritance tax as a gift with reservation of benefit. It can additionally create capital gains tax and stamp duty problems, and it exposes the property to the children's divorces and creditors.
• Asset protection trusts sold specifically for this purpose. Where the substance is putting a home beyond reach of a means test, the arrangement is vulnerable to exactly the same challenge. Fees for these are often substantial.
• Transferring for a nominal sum. Selling a house to a relative for £1 is a transfer at undervalue and will be treated as such.

If you have already entered into something like this, bring the paperwork. It is better to understand the position now than for your family to discover it during an assessment.

Tenants in common: what it does and does not do

Where a couple own a property as joint tenants, the survivor automatically inherits the whole thing on the first death. Where they own it as tenants in common, each owns a defined share which passes under their will.

Changing to tenants in common, so that the first to die leaves their share into trust rather than to the survivor, is a well-established arrangement. It is normally done for reasons that stand on their own, particularly in second marriages where each wants their share eventually to reach their own children.

It may also mean that only the survivor's share is assessable if they later need care. But this is not a guaranteed shield. It depends on the facts, on when and why it was done, and it is a legal arrangement requiring a solicitor. Anyone presenting it as a certain way to halve a care bill is overstating it.

What genuinely helps

Planning early, for reasons that make sense in themselves. Understanding the disregards before assuming a sale. Making sure a lasting power of attorney exists so someone can act if capacity is lost. Pursuing NHS funding where there is a case. Considering a deferred payment agreement rather than a forced sale. And knowing what the actual cost is likely to be, so the plan is built on a real number.

None of that is dramatic. It is also the part that works.

This page is general information about the rules and does not constitute advice.

Last reviewed: 17 September 2026. Next review: Annually.