Quote from Help the Aged :

"It is illegal to make over property or savings to another person in order to qualify for financial help from your local council. This is called deprivation of assets. If your local council believes that you have deliberately given away assets in order to reduce or avoid care home fees, it has the power to treat you as still having those assets – known as notional capital.

There is no set time limit within which giving away property or savings is treated as deprivation of capital. However:
- If the transfer took place up to six months before you moved into the care home, the local council may try to claim the fees from the person you have given your assets to.
- If the transfer took place more than six months before you moved into the care home, the local council may consider whether it is possible to recover the fees from you personally. This means that you could be given a bill for your home fees, even though you don't actually have the money any more.

The local council will be more interested in the intention behind any transfer of assets than how long ago the transfer took place. If a main reason was to avoid paying for care fees it might investigate, even if the transfer took place a few years ago."

You should be OK from an inheritance tax point of view if they are charged a market rent under a proper tenancy agreement and the rent is paid regularly. Basically you need to be able to control what happens to the property - so no agreements to not sell whilst they are alive.

thank you for your comments,oh dear that doesnt sound very promising then.

For both inheritance tax and care costs, if your parents still live in the property, it will be usually be considered still their property. Any rental agreement to get round this would have to be at market rent and the rent would need to be paid regularly. Even then, it's not something that you could be certain about.

My opinion is that your parents would need to move out of the property and gift the property some years before needing care to be certain about being able to pass on the inheritance.

has the method of buying a stake in parents home and renting property back to parents to avoid loss of property if and when they need residential car;e changed since your original advcie back in 2007 please?what are the implications and how best can loss of prperty due to care costs be avoided?

thx CEL.