Deprivation of assets: gifts, care and what councils look at

What deprivation of assets means

When a council works out what someone pays towards their care, it carries out a financial assessment, often called the means test. It looks at their capital (savings, investments and sometimes property) and their income.

Deprivation of assets is when a person has deliberately reduced their capital or income in order to pay less towards their care. If the council decides this has happened, it can assess the person as if they still had the money. The money they no longer have, but are treated as having, is called notional capital, or notional income for income.

Most gifts are not deprivation. The official guidance in England says deprivation should not be assumed, and that people should be able to spend the money they have saved as they wish. What matters is why and when something was given away.

The detail in this guide comes from the statutory guidance for England, issued under the Care Act 2014. Wales, Scotland and Northern Ireland have their own rules and guidance on deprivation, built on similar ideas. If the person lives outside England, check with their council or, in Northern Ireland, their Health and Social Care Trust.

What councils look at

Before deciding that deprivation has happened, councils in England are told to consider questions like these:

• Motivation. Was avoiding care charges a significant reason for the timing of the gift or spending? A gift can have several reasons. The question is whether avoiding charges was a significant one.
• Foreseeability. At the time, could the person reasonably have expected to need care and support?
• Expectation of paying. Could they reasonably have expected to have to pay towards that care?

The guidance makes the point that it would be unreasonable to find deprivation where, at the time, the person was fit and healthy and could not have foreseen needing care. A gift made by someone in good health, long before any diagnosis, is very different from a large gift made the month after a dementia diagnosis.

There is no fixed look-back period in England

Many people believe councils can only look back seven years. That figure belongs to Inheritance Tax, which is a separate set of rules (see our guide to the 7-year rule). The English care guidance sets no time limit. In practice, the further back a gift was made, the harder it usually is to argue that care was foreseeable at the time. But there is no date after which a gift is automatically safe.

Common forms deprivation can take

The guidance gives examples of how capital can be reduced, including:

• a lump sum given to someone else
• sudden large spending that is out of character
• transferring the title deeds of a property to someone else
• putting money into a trust that cannot be undone
• turning money into something the means test ignores, such as personal possessions

Each of these is only a question, not a finding. Using money to pay off a debt the person really owed is not deprivation, even if the debt was not yet due.

Two illustrations

These are made-up examples to show how the questions work. Real decisions depend on all the facts.

Margaret is 72, healthy and living independently. She gives her son money towards a house deposit, as she did for her daughter years earlier. Five years later she has a stroke and needs a care home. She had no reason to expect care when she made the gift, and there is a family pattern behind it. A council would be unlikely to see this as deprivation, especially if the reason was written down at the time.

Peter has been diagnosed with a progressive condition, and a care needs assessment is under way. Shortly afterwards, a large share of his savings is transferred to his children. Here care was foreseeable and the timing is close, so the council is likely to ask questions. It could assess Peter as still having the money.

What can happen if a council finds deprivation

First, the council can charge the person as if they still had the money. That can leave them with a bill they cannot pay from what they actually have. Second, in England, where money was transferred to someone else to avoid charges, that person can be asked to pay the council the difference. They cannot be asked for more than the benefit they received.

It is also up to the person to show the council that they no longer have an asset. Evidence such as a deed of gift, receipts for spending, or proof that a debt was repaid can help.

Why keeping the reasons for gifts matters

A council may ask about a gift years after it was made, when memories have faded. A short note written at the time carries much more weight than a recollection. For each significant gift, it helps to record:

• the date, the amount and who received it
• the reason, in the giver’s own words if possible, such as a birthday, a wedding, or help with a house deposit
• the giver’s health and care situation at the time, including any diagnosis or care assessment
• any pattern, such as similar gifts to other children in the past
• evidence, such as a bank statement or a signed note

If an attorney is making gifts on someone’s behalf, there are separate, tighter rules. Our guide to being an attorney explains them.

If a large gift is being considered while care is likely, or a council has raised questions, you may want to speak to a solicitor or a regulated adviser who specialises in care fees before going further. For how the limits themselves work, see our guide to paying for care.

How Seventide helps

When a gift is recorded for someone who is receiving care, or whose profile shows a diagnosis or recent care assessment, Seventide shows a warning before saving and asks you to note their health and care situation and the purpose of the gift. That statement is stored with the gift. A deprivation schedule lists gifts from the last seven years with their statements and a risk indicator, which is a guide only and never a legal decision.

This guide explains published guidance in general terms. It is not legal or financial advice, and only the council can decide whether deprivation has happened in a particular case. The rules differ between the UK nations. For decisions about gifts, property or care fees, you may want to ask a solicitor or a regulated financial adviser.

Official sources

• GOV.UK: Care and support statutory guidance (England), Annex E: deprivation of assets
• NHS: Paying for your own care (self-funding)
• Welsh Government: Charging for social care
• mygov.scot: Financial assessments for care
• nidirect: Paying your care home fees

Last checked: October 2026, figures for the 2026/27 tax year.