ASK THE EXPERTS: Will I have to pay sick sister’s fees for home?

By Edited By Stephen Womack

This week’s experts are HELEN KANOLIK, who runs adviser HelenK Financial in Wimborne, Dorset; PHILIPPA GEE of Philippa Gee Wealth Management in Church Stretton, Shropshire; and PATRICK HARRISON, a tax partner in the London office of
accountant PKF. Do you have a personal finance query? Write to: Ask the Experts, Financial Mail on Sunday, Room 301, Northcliffe House, 2 Derry Street, London W8 5TS. Sorry, no personal replies.

E.C. writes: My sister is in a nursing home with dementia. She is funded privately from her savings, but I am worried what happens when her money runs out. She has no pension income, so will I become liable for her fees?
H.K. replies: Your sister has to make some contribution to the care costs until her savings fall below £14,250.
But any care required from registered nurses should be paid for by the NHS, with other costs paid from your sister’s savings.
If the savings go below £14,250, the local authority may pay for all of her care. It can ask relatives to top up their payments if the costs of her existing nursing home are more than the authority would usually pay. If you or other relatives do not provide this top-up, your sister may be moved to a cheaper home.
It is worth checking that all appropriate State benefits, such as attendance allowance, have been claimed. You could consider using her savings to buy a long-term care annuity to reduce the potential need for top-ups.

Loan dilemma

M.P. writes: My daughter is registered disabled. She hoped to work in education, but even two mornings a week is proving beyond her. She has an outstanding student loan. Are there any circumstances in which it could be cancelled?
P.G. replies: If your daughter stops working and is earning less than £15,000, her loan repayments will cease automatically, but you should be aware that interest will still be added. Where a loan was taken out in or before academic year 2005/06, the debt is written off at age 65.
For more recent loans, outstanding balances are written off after 25 years (35 years for those living in Scotland when the loan started).
You can ask for the loan to be  cancelled earlier. This may be possible if your daughter is medically certified as permanently unable to work and receives a disability-related benefit.

CGT cloud over a couple planning to get married

J.R. writes: My partner and I have each lived independently in our own homes, but we want to move in together and marry. We plan to keep both homes, but if we sell one later would we have to pay tax on the sale profits?
P.H. replies: A married couple can have only one ‘main residence’ for tax purposes. If you have more than one home, you can elect which is your main residence. You must make the election within two years of starting to have multiple homes.
Provided the ‘unelected’ home is sold within 36 months of it ceasing to be the main residence, the sale is exempt from capital gains tax.
Beyond this, tax relief is in proportion to the time spent  living there.