Thanks for the advice.

IHT is not a main concern.

If my father moved into other accomodation and we rented the original house and used said money to offset his new living cost/authority rent then I presume we children would be liable to the full (25%?) tax rate for 'non earned income'?

At what point would CGT be payable if at all in that situation?

Max's advice about the IHT is correct as the house will be classed as a GROB (gift with reservation of benefit) because the gift was conditional upon him residing in it rent free. Had he paid the full market rental during your ownership then it would have dropped out of his estate for IHT purposes and this would not be the case. You could possibly have a CGT liability when or if you do eventually sell, in the future.

The gift however should not be looked at as "deprivation of assets" by the local authority, because it was gifted so long ago when care needs were not reasonably foreseen or expected.

RJRock:

Another question is whether his signing over of the house was effective in what he was trying to achieve?

It will not avoid Inheritance Tax because he is still living there. It will also mean that the children could be liable for Capital Gains Tax on a sale becuse it is not their principal residence.

I'm honestly not sure how the council will view the situation but it's a ruse that the tax authorities will actually penalise.

My father is 76 years old, is registered as disabled (a degenerative muscular condition; CMT). He lives on his own in the original family house, which approximately ten years ago he signed over to his three children via a solicitor.

For the last few years his condition has caused our family concern and has overcome his independent lifestyle, although he will not admit to it. We are keen to get my father into sheltered or housing association accommodation where there is help immediately at hand for his condition and people around looking out for him.

What means testing if any will our council demand and what general advice could you offer so that he can make the best of any move financially?

He has a full teachers pension, has savings in various forms to the tune of about £50k. To reiterate, he signed over the house about ten years ago, although he pays no rent to ‘the owners,’ his children. His thinking, we believe, was to prevent the family house being used to pay for any specialist care in his later life. Whilst we children do not see an issue, my father has held onto independent living, and the risks of living alone – he has fallen more frequently in the last few years –to avoid the inevitable for as long as possible.

Another question is whether his signing over of the house was effective in what he was trying to achieve?

Should we seek a specialist accountant?

Any help or advice gratefully appreciated.