Can I avoid care fees by giving away my property or assets?

Gifting your home or other assets to avoid care fees

Arranging care in later life can be incredibly expensive.  Anyone who has assets above a certain level - including, in some cases, the value of their home - will usually have to pay for some or all of their care themselves. 

Care fees have been rising above the rate of inflation for years: the average weekly quoted fee for self-funders reached £1,302 per week in 2025, according to care consultancy Carterwood. And more than half retirees in our 2026 survey said they were worried they won’t be able to afford care in the future.

You might consider giving your property or other assets to friends or family to reduce the value of your assets and increase your chances of receiving state-funded care in later life. But this can be viewed as ‘deliberate deprivation of assets’ and carries significant risks.

Here, we explain what you need to know, including the rules around gifting your property and assets and the risks.

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What is deliberate deprivation of assets?

If you apply for local authority funding, the council will carry out a financial assessment to determine how much you should pay towards the cost of your care. 

This will involve an assessment of your income and assets, as well as assets you’ve held in the past. The council will consider the following things to decide whether you deliberately gave away your assets to avoid paying care fees:

• Whether you knew you needed care and support
• Whether you knew you would need to contribute money towards your care fees
• Whether avoiding care fees was a significant motivation for giving away your assets.

Here are some more examples of actions that could be considered as deliberate deprivation:

• gifting money or expensive items, such as a piece of jewellery that has recently been purchased, to family members or friends
• gifting property by transferring it into someone else's name
• selling an asset, such as a property, to someone for less than its true worth
• a sudden and substantial increase in spending that’s out of character with your normal spending
• putting money into a trust or tying it up in some other way

Is there a 7-year rule?

Unlike 'the seven-year rule' that applies to inheritance tax, where gifts given seven years before a person dies are tax-free regardless of their value, there is no equivalent time limit for deliberate deprivation of assets. 

Local authorities can look at any gifts made in the past, but will usually focus on the time between the person realising that they needed care and when they sold the assets.

They will also consider the value of gifts. The asset would have to be worth a significant amount for the local authority to investigate. Giving away a £300,000 property, for example, would significantly affect your total capital whereas smaller gifts - such as giving someone a £300 ring - would have minimal impact.

It all boils down to intention and whether you could reasonably have known that you might need care when you made a gift. 

For example, if you fell ill, were assessed as needing residential care, then signed your property over to a relative the following week, that would look suspiciously like deliberate deprivation.

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What's the penalty for deliberate deprivation of assets?

If you are found to have 'deliberately deprived' yourself of assets, the value of these assets can still be taken into account in the local authority's financial assessment, even though you no longer own them.

The value of the assets that you used to have is called 'notional capital'. This can be added to your remaining assets to come up with an overall value for the financial assessment. 

So, in the example of transferring ownership of your home, not only could you end up having to pay for your care, you might no longer own a house to fund those costs.

Can local authorities claw back care costs?

If a local authority initially funds your residential care costs and later rules that you had 'deliberately deprived' yourself of assets, it has the power to claim care costs from the person to whom the assets were transferred.

Legally, local authorities have the power to recover costs by instigating court proceedings. However, a local authority should only do this after it has tried other reasonable alternatives to recover the debt.

You have the right to appeal if you feel that an unfair decision has been made. If you want to make a complaint or appeal a decision, you should contact your local authority.

Can I avoid care fees by putting assets in trust?

Setting up a lifetime trust involves transferring the legal ownership of assets, such as money or property, to someone else. 

It is sometimes suggested that transferring your property into a lifetime trust could help you to avoid care fees. But there is significant risk that this will be considered as deliberate deprivation of assets, meaning you’re unlikely to qualify for financial support from your local authority.

For inheritance tax purposes, the act of placing assets into a trust is treated in the same way as making a gift. In other words, the assets could be subject to inheritance tax if you die within seven years - but if you live for longer than that, it falls out of your estate for inheritance tax purposes.

Lifetime trusts are most useful for someone who wishes to put money aside for the future for a family member who can’t manage money for themselves. For example, because they are permanently disabled or are too young.

• Find out more: inheritance tax and trusts

What are the risks of gifting money or assets?

• It's permanent: there's no going back. Once you have given a gift to someone, you can't change your mind.
• Loss of financial security: assets might be needed for other unforeseen costs in the future. You might want to move house or pay for care in your home, for example. If you have disposed of assets, you might not have money when you need it for other things.
• Loss of choice and control: reducing assets will leave you financially vulnerable and limit the choices you have in the future.
• Relationships can change: someone that you trust to 'hold on to' a valuable asset, or own your property 'in name only' and pass money to you at a later date, might not always live up to their end of the bargain.
• Divorce/bankruptcy: you might give your house to someone on the understanding that you can continue to live there. If the person receiving the gift gets divorced or goes bankrupt, however, the house may have to be sold to form part of a divorce or bankruptcy settlement. This could leave you homeless.
• Capital gains tax: if you make a profit when transferring an asset you may be liable for capital gains tax.

Where can I get legal advice?

You should seek legal advice if you're considering gifting any assets, particularly transfer of a property.

The Law Society of England and Wales has produced detailed guidelines for solicitors on gifts of property and their implications for long-term care. If you live in England or Wales, make sure that any solicitor you speak to is aware of these guidelines.

Which? Legal can provide legal advice on handing over property to family or friends.

The Which? Money helpline can provide guidance on your options for paying for care, and how moving into a care home can affect your income and benefits.