Fair Deal/Nursing Homes Renting House - nursing home fees

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GoldWings

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My father is in a nursing home and we are considering renting his home to help with the nursing home fees.

Would I need an accountant - I'll be the person in charge of this. Never done it before. How does the tax work? End of year?

I'm joint (enduring power of) attorney.
 
If you are reasonably financial literate, then yes you could handle the accounts and tax filing.

But this is probably the easier part of the task you are taking on - selecting tenants, managing the property, dealing with the PTRB, etc will be much more difficult, so make sure your are prepared for this
 
GoldWings said:
My father is in a nursing home and we are considering renting his home to help with the nursing home fees.

Would I need an accountant - I'll be the person in charge of this. Never done it before. How does the tax work? End of year?

I'm joint (enduring power of) attorney.
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There are generous tax reliefs available when paying nursing home costs. If possible try to utilize those and effectively reducing the cost of the care by paying for it with "Gross Income" rather than net after tax income. You can still rent out the house and use the tax reliefs.

Also consider an equity release loan on your fathers home to fun the care, if you didn't have the spare cash to fund the care costs, as these bills are sizeable. You could pay for care utilize the tax credits and your farther can repay you from the equity release loan.

40% tax relief at the higher rate, so certainly worth considering and trying to avoid paying for anything with after tax income.
 
Checkers said:
Also consider an equity release loan on your fathers home to fun the care, if you didn't have the spare cash to fund the care costs, as these bills are sizeable. You could pay for care utilize the tax credits and your farther can repay you from the equity release loan.
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You could, but that would be tax evasion and could entail serious and expensive consequences.
 
thedaddyman said:
Is your Father on Fair deal, if so it renting could have impacts there as well
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He is.
Oh I didn't think renting while on Fair deal was an issue? I thought the government was trying to incentivise renting out properties belong to folks in nursing homes. But I'm guessing the income would then be assessed and go back into the annual assessment? Gah
 
T McGibney said:
Why would someone clocking up big bills in a nursing home gift borrowed money to their children?
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so the children can pay the nursing home costs on behalf of the dad and claim the tax relief, the family end up paying 60% of the costs instead of 100%
Is it legal and not tax evasion once gifted ?
 
mickydiv said:
so the children can pay the nursing home costs on behalf of the dad and claim the tax relief, the family end up paying 60% of the costs instead of 100%
Is it legal and not tax evasion once gifted ?
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It looks and sounds like artificial tax avoidance, which the law forbids.
 
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