Families sometimes give money to children, or change who owns the house, before a parent moves into care. The council can look back at that decision, and there is no cut-off date after which it is safe.
What the rule is
Councils in Scotland follow national guidance on charging for residential accommodation. It says that if the council believes a resident has deprived themselves of an asset to reduce their charge, it can treat them as still possessing it.
The asset that is assumed to remain is called notional capital. It counts toward the same £36,750 limit as actual savings. Our guide to care home fees in Scotland explains the limits.
The test
Avoiding the charge doesn't have to be your main reason for giving something away. It has to be a significant one. The council looks at all the circumstances, including what you knew about your health and likely care needs when you made the decision.
The burden is on you. If you can't show that you no longer hold an asset, the council treats you as if you do. The guidance lists what counts as evidence: a trust deed, a deed of gift, receipts for spending, and proof that debts were repaid.
What counts as giving something away
The guidance gives examples. A lump sum paid to someone else, as a gift or to repay a debt, is one. Transferring the title deeds of a property to someone else is another. So is putting money into a trust that can't be revoked.
It also lists large spending on something like an expensive holiday, converting capital into something that would be ignored in the assessment, such as personal possessions or an investment bond, and living far beyond your means. Paying excessive sums into a funeral plan is on the list too.
What isn't treated that way
Ordinary spending isn't. The guidance gives an example of a person with £24,000 who pays off a £3,500 home improvement loan before moving to a care home. It says it would not be reasonable to treat that as deliberate deprivation.
It also says the council should consider deprivation only when the resident has stopped holding capital that would otherwise have counted. Giving away something the council wouldn't have counted anyway, such as a ring that would have been ignored, doesn't raise the question.
Timing
There is no fixed look-back period. The guidance says deprivation can be considered for resources disposed of at any time. What changes over time is the question of purpose.
A person who gave money away when fit and healthy, and could not have foreseen needing a care home, is unlikely to be treated as having acted to avoid the charge. A person who gave a car to their son two weeks before entering a home, knowing they were about to be admitted, is. The guidance uses that exact example, with a car bought for £10,500.
What happens if the council decides you did
It assesses you as if you still held the asset. The notional capital then reduces each week by the extra you pay because of it.
If the asset was transferred within six months before you entered the home, or while you were there, the council can also look to the person who received it for the charges that result. That power comes from section 21 of the Health and Social Services and Social Security Adjudication Act 1983.
Trusts and gifts
Gifts made for inheritance tax reasons are caught too. A gift that is free of tax after seven years can still be deprivation for care fees. Our guides to gifts and the seven-year rule and to whether a trust protects a home from care fees look at each side.
What to do
Plan early, keep a written record of why you made each decision, and take advice before moving anything significant. A power of attorney lets someone act for you if you can't. Long-term care planning looks at your home, savings and income so that nothing is done in a hurry.