Hello,
An elderly and infirm relative lives in an annexe and has limited expenses, courtesy of care provided by family members. The relative gifts money out of surplus income on a regular monthly basis, with statements written and signed to formalise arrangements.
At some future stage the relative may need to pay for their own care, from accumulated capital. This would reduce the scale of their own estate and consequent IHT liability.
The question relates to the acceptability of forgoing income through gifting, and subsequently reducing accumulated capital through spending. The relative is concerned that this may be perceived as IHT evasion rather than avoidance.
This is of course somewhat different from the more commonly asked question on deprivation of capital for state support in personal care. I wonder if HMRC opine on personal spending choices and resultant outcomes. Hence would they be likely to take issue with the scenario presented?
Any thoughts appreciated.
L.
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