Care Home Fees and Later-Life Planning in Aberdeen and Stonehaven
The prospect of paying care home fees can cause considerable concern for individuals and their families. The rules are complex, and it is important to understand how care costs are assessed and the risks involved in transferring or reorganising assets.
There is no guaranteed way to protect assets from care home fees. However, appropriate legal planning can help ensure that your affairs are properly organised, your wishes are clearly recorded and relevant exemptions and allowances are considered.
How are care home fees assessed in Scotland?
If you move permanently into a care home, the local authority will normally carry out a financial assessment to determine how much you should contribute towards the cost of your care.
The assessment may take account of your income and capital, subject to applicable exemptions and disregards.
Capital can include:
- Savings and bank accounts;
- Shares and investments;
- Land and buildings, including your home in some circumstances; and
- Assets you have given away but which the local authority decides should still be treated as belonging to you.
Capital limits
From 6 April 2026, the capital limits in Scotland are:
- Upper capital limit: £36,750
- Lower capital limit: £22,750
If your assessable capital is above the upper limit, you will generally be expected to meet the full cost of your accommodation, although you may still qualify for free personal care and, where applicable, free nursing care payments.
If your capital is between the upper and lower limits, you may receive local authority assistance but will be treated as having an additional weekly income from your capital.
If your capital is below the lower limit, it will generally be disregarded, although your income will still be assessed.
These limits are reviewed periodically and may change.
Will your home be included?
Your home is not automatically included in every assessment.
It may be disregarded where it continues to be occupied as a main residence by, for example:
- your spouse or civil partner;
- your partner;
- a relative aged 60 or over;
- an incapacitated relative; or
- a child under 16 whom you are liable to maintain.
Other disregards may also apply depending on the circumstances.
Where someone moves permanently into a care home and the property is not otherwise disregarded, its value will normally be excluded for an initial 12-week period.
Free personal and nursing care
People in Scotland who have been assessed as requiring personal care may qualify for a contribution towards the cost of that care regardless of their capital.
From 1 April 2026, the weekly payments are:
- £260.30 for personal care; and
- A further £117.10 for nursing care, where nursing care is required.
These payments will not necessarily cover the full cost of living in a care home.
Deliberate deprivation of capital
You cannot necessarily avoid care charges by giving away your house, money or other assets.
A local authority may decide that deliberate deprivation has occurred where a significant purpose of a transaction was to avoid or reduce care charges.
Transactions which may be investigated include:
- gifting or transferring a house;
- giving away substantial sums of money;
- selling property for less than its proper value;
- placing assets into a trust; or
- making unusually large or irregular expenditure.
The local authority should consider all the circumstances, including:
- The reasons for the transaction;
- The person’s health and circumstances at the time;
- Whether care was already required or reasonably foreseeable; and
- The timing of the transaction.
A transaction is not necessarily deprivation merely because it reduces a person’s assets. However, a genuine purpose unrelated to care fees will not necessarily prevent a finding of deprivation if avoiding care charges was also a significant purpose.
Is there a seven-year rule?
There is no seven-year rule for care home fees.
The seven-year period sometimes associated with lifetime gifts relates primarily to inheritance tax. It does not prevent a local authority from investigating an earlier transaction.
There is no fixed period after which a transfer is automatically safe from examination. The timing of the transaction is relevant, but it is not conclusive.
What happens if deprivation is established?
If the local authority concludes that you deliberately deprived yourself of an asset, it may assess you as still possessing its value. This is known as notional capital, and there is no fixed time limit preventing the authority from investigating an earlier transaction.
A separate six-month rule may, in certain circumstances, allow the local authority to recover care charges from the person who received an asset where the disposal took place within six months before the person entered permanent residential care. This does not mean that transfers made more than six months earlier are protected from the deprivation-of-capital rules.
Gifting your house
It is legally possible to transfer ownership of a house to a child or another family member during your lifetime. However, this should not be done on the assumption that the house will then be excluded from a future care-fee assessment.
An outright transfer can involve significant risks:
- You will no longer own or control the property;
- The recipient could sell or mortgage it;
- It could be affected by the recipient’s divorce, bankruptcy or death;
- You may require the recipient’s cooperation before moving or selling;
- There may be tax consequences; and
- The local authority may still treat you as owning its value under the deprivation rules.
Independent legal advice should be obtained before any transfer is completed. Specialist tax or financial advice may also be required.
Placing your house in trust
Trusts can be appropriate for succession planning or for making provision for particular beneficiaries.
However, placing a house in trust does not guarantee that it will be excluded from a care-fee assessment.
The local authority may consider:
- Why and when the trust was created;
- What rights the person retained;
- Who may benefit from the trust;
- Whether the person continues to occupy or control the property; and
- Whether avoiding care charges was a significant purpose.
Trusts may also involve tax consequences, administration costs and a loss of control over the property. They should not be established without detailed legal and, where appropriate, tax advice.
Survivorship destinations and Wills
Many jointly owned Scottish properties contain a survivorship destination. This usually means that, on the death of the first owner, their share passes automatically to the survivor.
A survivorship destination will ordinarily take precedence over the deceased owner’s Will in relation to their share of the property.
In appropriate circumstances, joint owners may consider removing the survivorship destination so that each share instead passes under the relevant owner’s Will.
This may be relevant where:
- Either owner has children from a previous relationship;
- The owners wish to benefit different family members; or
- Provision is required for a vulnerable beneficiary.
Removing a survivorship destination does not remove either owner’s share from their estate during their lifetime and does not prevent that share from being considered in their own care-fee assessment.
Its possible effect arises only after the first owner has died. Any arrangement must also address the survivor’s right to remain in the property and the practical consequences of shared ownership.
Equity release
A lifetime mortgage may allow a homeowner aged 55 or over to release money from the value of their home while retaining ownership.
Equity release may assist with meeting expenditure or care costs, but it is not necessarily a means of protecting assets from assessment. Cash released and retained may itself be treated as capital.
Equity release can affect inheritance, benefits and future housing choices. Advice from a suitably authorised financial adviser should be obtained before proceeding.
Powers of Attorney and later-life planning
Later-life planning is not limited to questions about care fees.
It should normally include consideration of:
- A continuing and welfare Power of Attorney;
- An up-to-date Will;
- The ownership and survivorship provisions affecting your home;
- Provision for a spouse, partner or dependent; and
- Arrangements for managing property and financial affairs.
A Power of Attorney must be granted while you have the legal capacity to understand and authorise it. It is therefore preferable to put one in place before it is urgently required.
Obtaining advice
There is no arrangement that can guarantee that your assets will be excluded from a future care-fee assessment. The applicable rules and financial limits can also change.
Legal advice can nevertheless help you:
- understand how the current rules may apply;
- review the title to your home;
- check whether it contains a survivorship destination;
- prepare or update your Will;
- put a Power of Attorney in place;
- consider appropriate provision for family members or dependants;
- understand the legal risks of gifts and trusts; and
- identify when specialist tax or regulated financial advice is required.
Care funding and later-life planning solicitors in Aberdeen and Stonehaven
Our solicitors can advise on Wills, Powers of Attorney, property ownership, survivorship destinations, trusts and wider succession planning.
We will explain the available options and their legal consequences. Where regulated financial, investment or tax advice is required, we can recommend that appropriate specialist advice is obtained.
To discuss care funding or later-life planning, please contact one of our solicitors by calling 01224 581581 or complete our online enquiry form and a member of our team will be in touch.
This article provides general information only and does not constitute legal, tax or financial advice. Care-funding decisions depend upon individual circumstances and the rules in force at the time of assessment. Capital limits and payment rates quoted are correct as at August 2026.