Deprivation of Assets: What Counts and What Doesn't (2026)

If someone gives away money or property so that the council will pay more towards their care, the council can treat them as if they still have it. This is called "deprivation of assets". But it isn't automatic: it depends on why and when the money was given away or spent.

This article explains the rules in England, which are set out in the Care Act statutory guidance. Scotland, Wales and Northern Ireland have their own rules.

What "deprivation of assets" means

Deprivation of assets is when someone deliberately reduces their savings, property or income in order to pay less towards their care. The guidance says the person must have known they needed care and support, and must have reduced their assets to cut what they would be asked to pay.

The guidance is also clear that people can spend their money as they wish ("it is their money after all") and that a council should not assume deprivation. It must first look at whether there was a good reason.

What the council looks at

Before deciding that someone has deprived themselves of assets, the council should consider:

• Timing: when the money was given away or spent, could the person reasonably have expected to need care and support?
• Motivation: was avoiding care charges a significant reason for doing it then?

So a gift made while someone was fit and healthy, and could not have foreseen needing care, should not be treated as deprivation. The same gift made just before a planned move into a care home may well be.

What can count as deprivation

The guidance lists common ways people deprive themselves of capital, including:

• giving someone a lump sum, for example as a gift;
• sudden large spending that is out of character;
• transferring the title deeds of a property to someone else;
• putting assets into a trust that can't be revoked;
• turning money into something the means test ignores, such as personal possessions;
• spending extravagantly, for example gambling;
• buying an investment bond with life insurance.

Income can be deprived too, for example by giving away or selling the right to a pension.

What doesn't count

The guidance gives examples of where deprivation should not be assumed:

• A possession you already owned. Giving a family member a painting the week before moving into a care home is not deprivation, because personal possessions aren't counted anyway. Buying a painting with savings in order to give it away would be looked at.
• An emergency admission. Someone who bought a car and then went into a care home unexpectedly, with no reason to think they would need care, should not be treated as having deprived themselves.
• Helping a partner. If a shared home is sold and part of a care home resident's share helps their partner buy a smaller home, that should not be treated as deprivation.

Proving where the money went

It is up to the person to show the council that they no longer have the money or property. If they can't, the council must assess them as if they still have it. Useful evidence includes:

• a trust deed or deed of gift;
• receipts for what was bought;
• proof that debts were repaid.

Keep bank statements and receipts, especially for larger amounts.

What happens if the council decides it's deprivation

The council will usually work out the charge as if the person still had the money or property. This is called "notional capital" (or "notional income"). If money was spent on something worth less, the difference can be counted.

If the money or property was given to someone else to avoid the charge, that person can be asked to pay the difference, but never more than they received. If several people received gifts, each can be asked to pay in proportion to what they got.

Before giving anything away

If you are thinking of giving money or property to family, or putting your home into a trust, take independent legal or financial advice first. Our related guides explain the options and their risks:

• Can you avoid care home fees?
• Giving an early inheritance
• Can a trust protect your home from care fees?
• The 12-week property disregard

Sources

• Care and support statutory guidance, Annex E: deprivation of assets (GOV.UK)
• Inheritance Tax: gifts (GOV.UK)