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The Pitfalls of Nursing Home Fee Avoidance Schemes
Clients should be wary of schemes designed to avoid the future payment of nursing home fees by using various methods, including lifetime settlements. These schemes are highly vulnerable to challenge by Local Authorities operating under the National Assistance (Assessment of Resources) Regulations 1992, particularly where ‘deliberate deprivation’ can be established.
It should be noted that the CRAG provisions provide guidance for Local Authorities on how to interpret these regulations, including advice in relation to the disposal of assets as a means of avoiding care home fees, and how this should be dealt with. Recent cases and the above regulations and guidance demonstrate that deliberate deprivation and schemes to facilitate this will be actively pursued by the Local Authorities and are to be avoided. There remain a number of accepted methods of providing tax-efficient lifetime gifting on which we would be happy to advise.