Written and reviewed by the Oath Healthcare care team · CQC-regulated provider · Last reviewed: 11 June 2026
Somebody has said it to you already. A neighbour, a friend from church, maybe your own son: “Put the house in the kids’ names before the council gets it.” It sounds sensible. It is usually repeated with great confidence. And acting on it without understanding the deprivation of assets rules is one of the most expensive mistakes a family can make.
This guide explains, in plain English, what deprivation of assets actually means, how councils decide whether you’ve done it, why the “7-year rule” everyone mentions doesn’t apply to care fees at all — and the legitimate ways to protect your family’s position.
One thing before we start: this is general information, not legal or financial advice. For decisions about your own home and savings, speak to a solicitor or a financial adviser accredited by SOLLA (the Society of Later Life Advisers).
Short on time? Deprivation of assets means deliberately giving away money or property to avoid paying for care. There is no 7-year rule for care fees — councils can look back as far as they like. If they decide a gift was deliberate, they treat you as if you still own it. But there are honest routes: if you receive care at home rather than in a care home, your house is never counted in the means test — and if your needs are primarily health needs, NHS Continuing Healthcare can pay for everything regardless of your savings.
What is deprivation of assets?
Deprivation of assets is the legal term, from the Care Act 2014 and its statutory guidance, for deliberately reducing what you own so that the council pays more of your care costs. In plain English: giving away money or property mainly to dodge the means test.
When you ask your council for help with care costs, they carry out a financial assessment (a means test). In England in 2026, if you have more than £23,250 in counted savings and assets, you pay for your own care. Below £14,250, the council pays, though you still contribute from income. In between, you pay a “tariff income” of £1 per week for every £250 of savings.
The deprivation rules exist to stop people emptying the cupboard the week before that assessment. If the council concludes you gave something away deliberately, they assess you as if you still had it. The gift achieves nothing — except family stress and, sometimes, a council pursuing the person who received it.
The “7-year rule” myth
This is the single most common misunderstanding we hear from families. The 7-year rule is real — but it belongs to inheritance tax, not care fees. They are two completely different systems.
| Inheritance tax (HMRC) | Care fees (your council) | |
|---|---|---|
| Time limit on gifts | 7 years — survive that long and the gift leaves your estate | None. Councils can look back as far as they consider relevant |
| What matters | When you gave it away | Why you gave it away, and whether care was foreseeable at the time |
| Who decides | HMRC, fixed rules | Your local authority, case by case |
The biggest practical difference: a gift made 10 years ago can still be deprivation if you already knew care was coming when you made it. Timing helps your case — it doesn’t settle it.
How councils decide: the two questions they ask
The statutory guidance (Annex E of the Care and Support guidance, if a professional mentions it) tells councils to ask two things:
- Was avoiding care charges a significant motivation? Not necessarily the only reason — a significant one.
- At the time, did you have a reasonable expectation of needing care and support? A healthy 60-year-old gifting money at a wedding is in a very different position from someone making the same gift a month after a dementia diagnosis.
Both questions are judged on the facts: your health at the time, what professionals had told you, the size and timing of the gift, and whether it fitted an existing pattern. A grandmother who has given each grandchild £500 every Christmas for 20 years has a pattern. A £150,000 house transfer three weeks after a hospital discharge meeting does not.
What counts as deprivation — and what usually doesn’t
| Likely to be challenged | Usually fine |
|---|---|
| Transferring your home into your children’s names after a diagnosis | Normal living costs and bills |
| Large, out-of-pattern cash gifts once care is on the horizon | Modest, regular gifts you’ve always made (birthdays, Christmas) |
| Sudden extravagant spending unlike your normal habits | Repairs and improvements to your own home |
| Moving savings into trusts or products specifically marketed as “care fee avoidance” | Paying off your own mortgage or debts |
| Selling assets to family for far less than they’re worth | A holiday or purchase consistent with how you’ve always lived |
Be especially wary of schemes sold at seminars or door-to-door that promise to “protect your home from care fees” by moving it into a trust. Councils see these arrangements constantly, the trust fees are real, and the protection often isn’t.
What happens if the council decides you deprived assets?
- Notional capital. You are assessed as if you still own what you gave away. If you gifted £50,000, the means test runs with that £50,000 counted — money you no longer have.
- Recovery from the recipient. In some circumstances, councils can pursue the person who received the asset for the unpaid care charges — particularly for transfers made shortly before care began.
- Debt recovery. Unpaid assessed charges are a civil debt the council can take to court.
You can challenge a deprivation decision — first through the council’s complaints process, then the Local Government and Social Care Ombudsman. Challenges succeed where families can show the gift had a genuine independent purpose and care wasn’t reasonably foreseeable. Good records help enormously.
The part nobody mentions: care at home changes the maths
Here is the rule that surprises almost every family we meet: if you receive care in your own home, the value of your home is disregarded in the means test entirely. The house only enters the calculation when someone moves permanently into a care home — and even then it’s disregarded while a spouse or partner (and in some cases another relative) still lives there.
So for many families, the question isn’t “how do we hide the house?” It’s “does mum actually need to leave it?” Visiting care at home starts from £25/hour, and live-in care from £1,100/week — frequently comparable to care home fees, with no means-tested house and no leaving home.
Legitimate ways to plan for care costs
- Check NHS Continuing Healthcare first. If your relative’s needs are primarily health needs, the NHS can fund care in full — no means test, assets irrelevant. Start with our CHC checklist or the free eligibility checker.
- Claim Attendance Allowance. Not means-tested, not deprivation-relevant, and widely under-claimed — up to £5,600 a year towards care needs.
- Ask about a care needs assessment and a financial assessment before assuming you’ll get nothing. The thresholds catch more people than families expect.
- Consider a Deferred Payment Agreement if residential care does become necessary — the council covers fees secured against the home, repaid later, so nothing is sold in a hurry.
- Keep gifting normal and documented. Continue patterns you’ve always had; note the reason for any larger gift at the time you make it.
- Take regulated advice for anything bigger. A SOLLA-accredited adviser or a solicitor who knows the Care Act — not a seminar selling trusts.
Frequently asked questions
Can I gift my house to my children to avoid care fees?
You can give your house away — but if avoiding care fees is a significant reason, the council can treat you as still owning it. You’d also lose legal control of your own home, which causes real problems if a child divorces, faces bankruptcy, or dies before you.
Does the 7-year rule apply to care home fees?
No. The 7-year rule applies to inheritance tax only. For care fees there is no time limit — councils consider why a gift was made and whether care was foreseeable, however long ago it happened.
How far back can the council look?
There is no statutory look-back limit. In practice councils focus on the period when care needs were foreseeable, but a transfer made years ago can still be questioned if care was already on the cards then.
Can I spend my own money however I like?
Broadly yes — normal spending on living, repairs, holidays and paying your own debts is fine. What gets challenged is sudden, out-of-character spending or giving once care is approaching.
Is my home counted if I get care at home?
No. For care in your own home, the value of the home is fully disregarded in the financial assessment. It is only potentially counted for permanent residential care, and even then disregards apply while a partner or certain relatives live there.
What savings can I have before paying for care in England?
In 2026 the upper capital limit in England is £23,250 — above that you self-fund. Below £14,250 your capital is ignored and you contribute from income only. Between the two, you pay £1/week per £250 of savings.
Worried about care costs? Talk it through before you act
The worst decisions about care fees are made quickly, on hearsay, under pressure. Before you transfer anything, it’s worth one conversation about what your family would actually pay — and what funding you may already be entitled to. Our care advisors do this every day, free, with no obligation.
- 📞 Cambridge: 01223 755887
- 📞 Redbridge & East London: 020 3949 4333
- 📞 South Essex: 01268 206550
- 🌐 Or start with the free NHS Continuing Healthcare eligibility checker
We’re CQC Rated Good, family-run, and we publish our prices — visiting care from £25/hour, live-in care from £1,100/week. If care at home keeps your house out of the means test and your mum in her own kitchen, we’ll tell you. And if you’d be better served by advice we can’t give, we’ll tell you that too.