Claiming tax relief on Fair Deal Loan Repayment

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Dee1976

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Hi,
A relative recently passed away who was under the care of a nursing home funded by the Fair Deal scheme. I have lived in their home for 6 years and have now inherited this house. Rather than sell the house to repay the Fair Deal loan of approx €112k, I intend to pay the loan and remain in the house.
My question is, am I entitled to claim this payment through health expenses?
The payment is collected by Revenue, the website states once the loan is repaid, you or your estate can claim the amount in health expenses but I'm not sure if this applies once another person is paying.
I have contacted revenue several times and the people I have spoken to said they didn't know.
Any help on this would be much appreciated.
 
Dee1976 said:
the website states once the loan is repaid, you or your estate can claim the amount in health expenses but I'm not sure if this applies once another person is paying.
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I was not aware of that, but it seems reasonable.

A person can claim tax relief at their marginal rate on their nursing home expenses.
A person can claim tax relief at their marginal rate on the payment of nursing home expenses for someone else.

So the state paid your relative's nursing home expense by way of a loan.

It seems reasonable that if you now pay them by repaying the loan, you can claim tax relief on such payments.
 

Nursing home and additional nursing care expenses

This page outlines how to claim relief on nursing home expenses under certain circumstances
www.revenue.ie www.revenue.ie

Ancillary State Support Scheme (Fair Deal Loan Scheme)​

You may wish to defer your healthcare costs. You can do this if you have Irish land or property assets. The HSE provide you with a loan, using your assets as security.

The loan is paid directly by the HSE to the nursing home. You cannot claim tax relief on the amount paid by the HSE to the nursing home.

The loan is due to be repaid:

  • when you sell the asset used as security
  • upon your death.
When the loan is repaid, you or your estate can claim tax relief on the amount repaid.
 
My wife had this query a couple of years ago.

She emailed revenue via her "My Account" and asked - and was told "no".

I emailed Revenue via ROS and asked the same question, and was told "yes".

As I file our Form 11, I went with the answer that I had received - and printed off the correspondence, just in case!
 
Thanks both. @Shirazman could you
Shirazman said:
My wife had this query a couple of years ago.

She emailed revenue via her "My Account" and asked - and was told "no".

I emailed Revenue via ROS and asked the same question, and was told "yes".

As I file our Form 11, I went with the answer that I had received - and printed off the correspondence, just in case!
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Thank you, so as with me, nothing really concrete from Revenue. I was told no today by a woman in Revenue, but she wasn't sure. She spoke to colleagues and they said "it was an agreement between my relative and HSE so not mine to claim"
Very confusing as I will be the relevant accountable person.
Were you able to claim back? I'm not sure of next steps.
 
Dee1976 said:
Thank you, so as with me, nothing really concrete from Revenue. I was told no today by a woman in Revenue, but she wasn't sure. She spoke to colleagues and they said "it was an agreement between my relative and HSE so not mine to claim"
Very confusing as I will be the relevant accountable person.
Were you able to claim back? I'm not sure of next steps.
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Don't know if this will work; the attached is the bones of the reply that I received.

1689004036713.webp
 

Attachments

Last edited by a moderator:
Brendan Burgess said:
It's not health expenses by the way. Health expenses attract tax relief at 20%.

Nursing home fees attract tax relief at your marginal rate.

Brendan
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Thank you, so tax relief in that case at 40%. It does seem pretty straight forward from the Revenue website but when I've called to confirm this it's been anything but. If I pay the outstanding loan then according to their site direction I can claim relief on the payment but nobody in Revenue has confirmed this so I was hoping somebody had experienced same and maybe a how to on it.
 
Hi, I have a Q about claiming tax relief on nursing home loan too, our solicitor recently repaid nursing home loan from my dads estate, I spoke to our tax accountant who could not see how tax relief could be paid on the figure as no tax had been paid on that lump sum. But I know revenue commissioners do say “When the loan is repaid, you or your estate can claim tax relief on the amount repaid”, we have already claimed tax relief for nursing home costs during his final year of life, so there no tax paid “left” to reclaim for that year.
Would his estate be claiming at 40% for this current tax year even though he is no longer alive?
Or would it be over the time period that he was in nursing home care? Or his final year of life? (In hindsight it may have been wise to repay the nursing home loan from my own savings and claim full 40% tax relief)
40% of nursing home loan value is a lot of money any suggestions/advice v welcome, thank you
 
Hi has anyone been through the above process of claiming tax relief on the repayment of the Fair deal loan.(On behalf of a parent).

Could you advise if the relief can be backdated to the years it was incurred ? ie if the loan was taken out 4 years ago and repaid this year can you apportion the relief across the period or only in the current year?

Do you get relief from PRSI and USC also? So potentially 52%?

Thanks in advance
 
@Banquo

The tax relief is on income tax only - so max 40%. There is no relief on PRSI/USC.

I haven’t been through this myself however I’m pretty sure you can only claim against tax paid in the year the loan is repaid. Might be worth a call to revenue to confirm.
 
Is there a double dip happening here if the CAT is based on the value minus the fair deal loan? Or what do you expect the base cost of the property to be on a future disposal?

Maybe there's a structuring opportunity there is there is a gap.
 
Villaines said:
Maybe there's a structuring opportunity there is there is a gap
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There should definitely be a way to optimise the position if the loan is partially paid by the estate to offset any income tax payable by the deceased in the final year of their life, and the remainder paid by the beneficiaries - although you would need to do the maths to make sure it works out and nobody is disadvantaged. The people involved would need to know what they’re at, or have good advisors.

It’s also really important to discuss this with the executor and the solicitor involved in administering the estate, as it looks like in the AnneB81 post above the solicitor did a solo run and repaid the loan before discussing it with the heirs, thereby limiting their options.
 
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