Question:
I am a single person and have to move into a care home. My home is worth around £200,000 so I won’t receive any help in paying my care home fees. I thought I’d rent out my home but this is going to be taxable income. Is there any way my care home fees are tax deductible?
Arthur Weller replies:
See the article about this subject in July 2013 Tax Insider by Tony Granger. Unfortunately, the rental income from your home is a taxable receipt, and the care home fees are not an allowable expense. Everyone needs somewhere to live, and therefore the costs involved are not considered to be 'wholly and exclusively' for the purposes of your rental business. See: www.hmrc.gov.uk/manuals/bimmanual/BIM37928.htm, and www.hmrc.gov.uk/manuals/bimmanual/BIM37930.htm.
