Families can claim for the cost of gratuitous care given to elderly relatives
A recent decision of the Court of Protection has made clear that the Court in appropriate circumstances will allow payments for care given by family members. In Re HC: The Public Guardian v CC 23 April 2015 Senior Judge Lush allowed payments for care by family members which were less expensive than alternative care regimes. He set out the Court’s approach which was that:
- As long as the allowance is affordable the Court will take the commercial cost of care and reduce it by 20%
- There is a further reduction of 20% to take account of the fact that HMRC do not consider such an allowance as income liable to income tax but rather as voluntary payment
It is important to realise that family members cannot just pay themselves as that would be very open to abuse. It does make clear however that in many cases the Court will give permission and this could have significant knock on effects for tax and care planning.
If you have any queries please contact Trevor Price at the Penrith office.