Funding Renovations to Home of Elderly Relative in Care

Hi my mother-in-law moved in to a residential care home over the summer. Her former home is not in a great state of repair. We are in the process of setting up a Deferred Payment Arrangement with the local authority to fund her on-going care. My in-laws owned the property as tenants in common, with equal shares. My father-in-law is no longer with us and his 50% passed to a trust with my mother-in-law and his daughter (my wife) as the trustees. We have LPA and believe that it would be in our mother-in-law’s best interests to renovate the property for rental. This would provide additional income for her and would reduce the debt under the DPA. Just getting started with all of this and wondered if anyone had any comments on the following.
1 - Is this broadly sensible?
2 - What implications would it have for income tax for my mother-in-law and eventually Capital Gains Tax and Inheritance Tax?
3 - What would be the best way of financing this renovation? I am assuming that it’s unlikely that my mother-in-law could raise the financing. We possibly could but I am concerned as to how we would protect our investment.
Any advice appreciated.

Do NOT muddle things up by using your own money.
This is definitely a question for a solicitor, or failing that, the Carers UK Helpline.


This is definitely a question for a solicitor

Seconded … expert , legal , advice.

What implications would it have for income tax for my mother-in-law and eventually Capital Gains Tax and Inheritance Tax?

Just three considerations out of several … value , as a b.t.l. investment or with vacant possession ( As is or improved ) … can differ greatly on some manors.

Perhaps an indication of the market value of all scenarios from a local estate agent before seeking legal advice ?

If a deferred payment arrangement with a LA , any prohibitions on the property within the proposed agreement ?
( If a bank / building society , there would be without their prior written consent … letting for one. )

Just had a thought, I think it could be argued that the value of MIL’s half should be totally disregarded! Was this considered or legal advice sought?

Yes I agree. We’re just looking for a way of avoiding having to sell what started as my wife’s family home over 50 years ago.

The local authority have agreed to disregard the 50% of the property that my FiL left in trust. To some extent it’s irrelevant as we’re trying to avoid being forced to sell the house. If MiL’s care bills end up being a sum we can’t finance then we’ll have to sell the house even if 50% is disregarded.

I believe they should have disregarded the whole property.

You need to take proper legal advice about this. In other situations where there are joint owners, they have disregarded the whole house as they can’t sell half a house.

Don’t EVER believe that the LA are telling the truth. I reclaimed £8,000 on mum’s behalf because they hadn’t applied some rules properly.

For what it’s worth … IN ADVANCE OF TAKING LEGAL ADVICE … Department of Health on property disregards :

Guidance given to LAs … 10 pages worth.

I know that where a property is owned jointly, different rules may apply, but I’m not sure where.
(I have the dreaded lurgy at the moment, hence my nocturnal posting). Will try and think where I’ve read it.

AGE UK Factsheet 38 , BB ?


Property and paying for residential care ;

About this factsheet.

This factsheet explains how your property is treated in the local authority financial assessment if you go to live permanently in a residential care home.

It covers the possibility of delaying the sale of your home to pay care fees via a deferred payment agreement.

Other factsheets cover different aspects of the charging system if you are placed by a local authority , for example :

Factsheet10, Paying for permanent residential care.

Factsheet 58, Paying for short term and temporary care in a care home, covers short-term circumstances such as respite care.

The information in this factsheet is correct for the period August2019 to July2020,but rules and figures sometimes change during the year.

The information in this factsheet is applicable in England.

If you are in Scotland, Wales or Northern Ireland, please contact Age Scotland, Age Cymruor Age NIfor their version of this factsheet. Contact details can be found at the back of this factsheet.

30 pages worth … in .pdf. format.

Just reali8sed that the book I needed was on shelf above me (after reorganisation).
It’s called “Community Care, Practice and the Law” by Michael Mandestam, 4th edition. On page 291/2 he deals with shared ownership. It details a case Chief Adjudication Officer v Palfrey, and another Ombudsman’s case.
I suggest that you order a copy of the book from your local library.

My summary is as follows.
How much is half a house worth? Probably not a lot if someone else owns a substantial chunk. However, if you sell the house as a whole, then mum gets a half share, which would then have to be used on fees.

Chief Adjudication Officer and Another v Palfrey ?

Coming right up :


Chief Adjudication Officer and Another v Palfrey; Same v Dowell, Same v McDonnell: CA 17 Feb 1995

March 15, 2017 dls Off Benefits,

References: Ind Summary 10-Apr-1995, Gazette 15-Mar-1995, Times 17-Feb-1995

Coram: Hobhouse LJ

Ratio : Property was acquired by joint owners to provide accommodation for both joint owners. That purpose would be defeated if one of those acquiring the property were to insist on a sale while that purpose was still subsisting. > The value of a joint interest in a house when calculating benefits entitlement was the market value of that half share, not one half of the value of the whole. > There was ‘nothing obscure or abstruse in the conclusion that the amount of capital which the applicant’s joint possession of that dwelling house represents may fall, for the time being, to be quantified in a nominal amount.’ In this case the value was nil.

Statutes: Trusts of Land and Appointment of Trustees Act 1996
Jurisdiction: England and Wales
This case is cited by:

Cited – Wilkinson v Chief Adjudication Officer CA (Bailii, [2000] EWCA Civ 88)

The claimant owned a half share in a property. It was said that this brought her disposable capital above the limit to make a claim. She had inherited it, but had transferred it to her brother in satisfaction of her mother’s wishes. . .

An away win ?

1995 … I wonder if any subsequent judgements since then have reflected a different view.

( " Please ! No more digging ? " )

Sorry Chris, but these rules don’t apply in the same way when someone goes into a home!!

Fair enough … just providing the sp on said case quoted.

Back to that AGE UK factsheet ?

Although I have not read it , my monies on the answer being within it !

If Bad Gateway is running today , a nice little win double ?

Old topic, locked, usual reasons.