Tax Relief is available to those who pay for Nursing home fees. If the person in the nursing home is on a lower tax bracket a member of their family claim the tax relief at higher rate by if they pay the nursing home fees themselves. My query is that if the person in nursing home has not qualified for Fair Deal Scheme as they have savings what is the impact is the impact on any future application of fair deal if this money has been "gifted" to a family member who uses it to pay the nursing home fees in order to get some benefit of tax relief ? Is this "gift" taken into account on assessment even though the proceeds of the gift were actually used to pay the nursing home in first place.
Tax Relief, Gifts & Fair Deal
- Thread starter benny74
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Brendan Burgess
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If the person gifts the money to the payer, then the payer cannot claim tax relief on it.
The Financial Assessment for the Fair Deal Scheme adds back any gifts given within the last 5 years.
If the person paying the fees is going to get a bigger inheritance, it makes sense.
Otherwise, it probably doesn't.
If you pay my fees of €60,000, then I will have €60,000 more cash and so in each of the following years, the state will pay 7.5% less or €4,500
If the state is making no contribution anyway, because I have a valuable house, then it might make sense for a relative to pay it.
Brendan
The Financial Assessment for the Fair Deal Scheme adds back any gifts given within the last 5 years.
If the person paying the fees is going to get a bigger inheritance, it makes sense.
Otherwise, it probably doesn't.
If you pay my fees of €60,000, then I will have €60,000 more cash and so in each of the following years, the state will pay 7.5% less or €4,500
If the state is making no contribution anyway, because I have a valuable house, then it might make sense for a relative to pay it.
Brendan
If I pay fees from my income I should be able to claim tax relief ? If some of that income is a gift from a parent in a nursing home I should only pay CAT If gift value goes above threshold ? Am I compliant in doing this ? I am not sure what tax rules I am not following....guidance please thank youb
If you pay the fees, you can claim the tax relief at your marginal rate. If your parent gifts you money each year, lifetime CAT limits apply, over €3,000 per annum. Max €310k lifetime. 6 years in a nursing home could exhaust the lifetime limit so any inheritance after death would be taxed at CAT rates. That's the tax side.
The HSE will seek only the previous 6 months' bank statements so may never realise you have been gifted the money.
The HSE will seek only the previous 6 months' bank statements so may never realise you have been gifted the money.