Renting out the donor's property
Guidance from Estate Advisory Group
Letting can keep a home in the family and still pay for care. It also makes you the manager of a tenancy on somebody else's behalf.
When letting beats selling
- The donor may return home, or has said they want to keep it.
- Rent, with a deferred payment agreement, can cover care fees without a forced sale.
- The market is poor and the donor's cash reserves can bridge the gap.
What you take on
- Gas safety, electrical checks, EPC, deposit protection and the right-to-rent checks.
- Landlord insurance — a standard policy will not cover a let or an empty property.
- Income tax on the rent through the donor's self assessment.
- Notifying the mortgage lender; consent to let is usually required.
Best interests, recorded
Letting to family is a conflict
If a relative becomes the tenant, use a market rent, an independent valuation and a proper tenancy agreement, and consider asking a co-attorney to make the decision. See conflicts of interest.
Common questions
Does rental income affect the local authority assessment?
Yes, rent counts as income in a financial assessment for care, and the property's value may count as capital depending on who lives there.
Can I use a letting agent?
Yes, and it is often sensible. The fees are a legitimate expense of the donor's estate.
Read next
Ready to make yours?
Answer five quick questions to see whether our service suits you. No account and no payment needed.
This is general information about how Lasting Powers of Attorney work in England and Wales. It is not legal advice about your situation. What we do and do not do.
Published by Estate Advisory Group