Genealogy Forum UK

When it comes to age care accomodation, there are now two classes in Australia.

If you worked hard and managed to buy a house during your lifetime you have to sell it to pay for your aged care accomodation.

If you were wise and sold your house when you retired so you could go on world cruises, get that sports car you always wanted and have wild parties then your aged care accomodation is fully paid for.

Luckily we managed to hold off the aged care home long enough to rent out my mother in laws house so we can at least keep it in the family.

I have never figured out why you are deemed to be rich because you own a home.

I think that's the same over here too, I'm sure that people like me and my husband, who plan ahead and make sure we save for our old age will be disadvantaged in terms of the people who despite having similar incomes have "squandered" their money.
I mean a few years ago the govenment bailed out people who'd taken flexible rate mortagages and due to a sudden raise in intrest rates were in difficulty, now when the same people are experiecing record low rates they're not asked to pay that money back.

the easy way to sort this out is for parent to sign over the house to the kids in there will that on the understanding they do not get the property until both parents die after 7 years goverment carnt touch the house

I understood that the government had plugged that particular hole as it's obvious tax avoidance. The transfer has to be done whilst the givers are alive. If the givers remain alive for 7 years (although it may be less now; it's been a couple years since I had to deal with this problem) then the gift isn't taxed. I knew a couple who tried that particular ruse out. They found themselves homeless after their kids turned them out of the family home. And if you try to include guarantees that they won't turn you out then it isn't considered a gift and there will be 40% tax to pay on it. You can do it then pay the market rent for the property (with a nice long rental contract) but that rent isn't claimable against your income tax and is chargeable for tax as part of the income of the new homeowners.

But it's a tricky subject as why should the tax payer pay for accomodation for those who can afford to pay for it themselves?

One of the other flip sides of that particular coin is that those who have spent it all have paid much more tax (Purchase or VAT etc. let alone the taxes levied on the manufacturers profits and their employees earnings) than those who have ploughed the money into a house.
A house has often been paid for with subsidies (tax relief on mortgages, interest rates pegged low to suit the government, etc.) and tax free products (no VAT on new build for instance) and has increased substantially in (untaxed) value, unlike the purchases of the spendthrift, and is a far greater drain on the State. A drain that the State plugs with such requirements as selling the house to provide one's own retirement accomodation or claws back in inheritance tax.

As far as the State is concerned those who bury their money in a property that can't be taxed aren't contributing whilst those that spend are encouraging manufacturing and it's concomittant employment, taxation and the provision of benefits for those in need.

Of course this only applies to the moderately comfortably off, the wealthy deal with it by having the property owned by an offshore company which is owned by an offshore charitable trust (whose beneficiaries are the children) and leased, at a peppercorn rent, to the parents. That way all expenditure (repairs, administration etc.) can be claimed against the income and a halfways decent accountant will ensure that the income and expenditure will nicely balance and that any VAT involved will be able to be recouped within the company accounts. The parents will be retained as directors of the company with a decent income designed to be as tax efficient as possible.

Sorry, rant over.

An average mortgage on and average wage takes 25 years to pay.

That is a huge investment.

Meanwhile, the elderly may live for another 20 years or more in the old person's home.

The house may increase in value four fold in that time.

But thier 25 year investment has been sold.

The old persons home gets to bank the hundreds of thousand of dollars and get interest etc on the money.

Meanwile those who should benifit from thier parents 25 year investment get zero.

In no way is that fair.

Despite having benefited from it myself I'm not overfond of the idea that others, who have done little to deserve it, should benefit from the hard work of their parents, surely it's better that the parents, who have after all done the hard work, should benefit from their own labours? I used to get very cross with my grandmother who, when I suggested that she might turn the heating up throughout the house so she didn't have to put an overcoat on to go upstairs to bed, or that she might have a cleaner in once a week to save the backache that ensued when she dusted and vacuumed, or that she should buy the nice piece of salmon (which she loved) rather than the catfood fish she insisted on for herself (whilst equally insisting that I had salmon), would come out with something like "I don't know why you want me to spend all my money, it's coming to you in the end." She couldn't understand that it was more important to me that she should be comfortable in her old age, especially as they had lived very frugally, always saving for 'a rainy day', rather than there being an inheritance for me. When 'the rainy day' came along she refused to use what they had worked for simply to enable me to be able to lead a lifestyle they would have abhorred.

SRD wrote:Despite having benefited from it myself I'm not overfond of the idea that others, who have done little to deserve it, should benefit from the hard work of their parents, surely it's better that the parents, who have after all done the hard work, should benefit from their own labours? I used to get very cross with my grandmother who, when I suggested that she might turn the heating up throughout the house so she didn't have to put an overcoat on to go upstairs to bed, or that she might have a cleaner in once a week to save the backache that ensued when she dusted and vacuumed, or that she should buy the nice piece of salmon (which she loved) rather than the catfood fish she insisted on for herself (whilst equally insisting that I had salmon), would come out with something like "I don't know why you want me to spend all my money, it's coming to you in the end." She couldn't understand that it was more important to me that she should be comfortable in her old age, especially as they had lived very frugally, always saving for 'a rainy day', rather than there being an inheritance for me. When 'the rainy day' came along she refused to use what they had worked for simply to enable me to be able to lead a lifestyle they would have abhorred.

I agree with you SRD, I've told my parents (when the subject came up), that if there was more than £5 left, then they've miscalculated!

My gran was the same as yours, part of her dislike of spending money (from her point of view) unnecessarily came from her upbringing - living through two world wars and the great depression and being the only bread winner for her parents.
I had to smile one day when I went round to help her work out how to use her new vacuum cleaner. She'd bourght it on one of those buy now, pay later, no interest deals (she'd have never borrowed money if she had to pay interest!). After telling me that she'd have to pay for it in six months, she looked straight at me and said "You never know, I may never have to pay for it!" and she smiled. I knew she meant that she may be pushing up daisies by that point.
As far as she was concerned, it was important to her that there was something for her children to inherit, and even though her family thourght that was a bit daft, we respected her view.
She went into a residential home at the age of 95, her house was sold to pay it, but due to some good (or maybe lucky) investments that my Dad sorted out, there was a reasonable amount left over when she died just shy of 101 years.
I suppose my point is really, that just as much as she enjoyed reading her bank statements (and checking how much she earnt in interest) her kids have enjoyed spending it! The money she left maybe hasn't made a huge difference to her children, but it has, up to a point, improved the lives of all three children and their families.

I am sure any parents would rather have the money they invested in their house be used by their children rather than the anonymous profiteers who run the old persons home.

Governments are starting to worry as we enter the decade where, for the first time ever, two generations of the same family will be of pensioner age for extended periods.

There have always been exceptions where long lived parents see their own children become pensioners. But now it will be the norm, not an exception.

Our Labour government has suddenly realised that the large piggy bank the conservatives left them has been squandered on buying Green votes and scraping into power.

When Labour get tossed out next election (it will be a blood bath) the conservatives will have to introduce tough measures to ensure we can provide the care and pensions for the aging population.

First off will be raising the retirement age, that will deal with two generations of retirement age. I've never understood, as work has got less strenuous and life expectancy not only longer but more likely, why retirement age hasn't steadily drifted upward.

SRD wrote:First off will be raising the retirement age, that will deal with two generations of retirement age. I've never understood, as work has got less strenuous and life expectancy not only longer but more likely, why retirement age hasn't steadily drifted upward.

might be less strenuous but poss more stressfull and if you a manual worker your body wear out just as quick depends on the job you do

also whilst making older people work longer less jobs avialble for the younger ones to take

I'm still working well passed retirement age. Were trying to get a couple of youngsters to train up - no luck so far after about 5 months.

Why is the matter of money never easy? We have the opposite problem with Mum. In her 80s, she now finds herself with pensions from my Dad & Stepdad, that puts her with a massive income. It's worrying her silly and there seems such a stranglehold on what she is allowed to give away to her family. I'm not bothered about it but some of the younger ones could really do with a hand. She can't understand why she isn't free to do what she likes with her own money.

She doesn't like to talk about how to deal with it (normal for her generation) but she doesn't want to see so much of it going in inheritance tax. She pays massive tax bills as it is. I'd like to see her making charitable donations but again, we aren't sure about the rules on that. I'd never realised before that there were such restrictions on what you can do with your own money, without the taxman poking his beak in!

At the moment the only advantage I can see is that, should she need to go into a home, she will be able to take her pick and that is something to be very grateful for but the worry this money is causing is really stressing her, not what was intended at all. Apart from stressing her, I'm constantly getting my ear bent over it. She may appear to be in an enviable position but she isn't happy with it at all and would far rather have her Husband back.

My Husband is still working, 67 next week and will carry on until they tell him to stop. I only work as his assistant now but that has freed me up for much needed support to my D-I-L, stuck a million miles away from family and friends, in the long months when my son is at sea and I have now been booked for full-time child care next year when they move down here and next month I am putting my toe in the water with step grandson. His Mum is a college lecturer and she's just gone back to work after maternity leave and I think her parents are maybe finding it a bit much to have the little one all the time.

That's another thing, so many women have to go back to work, after having a baby, yet the cost of childcare has soared to ridiculous amounts. There is a whole army of Grandparents, now full-time minders, for their grandchildren. There is an awful lot wrong with this world and it will take a better Government than the one we have, to sort any of it out.

Another 4 years until I get my pension, yet my best friend, just 3 months older, will have to wait another year. Nothing seems fair, or sensible anymore.

well if your mom draw cash and gives it to her grankid tell them to trickle feed it into there account and if any nosey people come around none of there business lost it at gambling horse slot machine etc

When you grew up with, truly, nothing, even less than nothing and then in your 80s to have so much money thrown at her, it's a bit hard for her to get her head round it all and the tax and inheritance tax thing completely fries her brain. I had never realised how horrible a situation it is as she is being made to think all the time about whether she will live another 7 years, or not. The whole thing is really bothering her.

In a way she is already giving to charity, she loves clothes and to fills her time, she keeps buying them and then decides she doesn't like them, so sends them to the Charity Shops. There must be some very well dressed women in Stourbridge & Halesowen now. I'm taking her away for a few days, when we get back I think I'm going to have to sit her down with someone, who knows what's what, to give her some peace of mind because she is driving me mad with it and all I get out of it is an expanding waistline, as she wants to buy me lunch everytime I see her.

Not sure I made my point clear but what cheeses me off is, if you pay tax on your money, when you get it, why one earth are you not then free to do with it as you will?