My parent fell very ill last year to the extent that they were hospitalised for several months and now needs to live in a care home. Whilst in hospital we knew that to finance the care we had to do something as the pension would not cover the expense. So, we decided to let out the family home and use the income to pay for the care bill. It seems to me to be quite unfair that they should pay tax on rental income that is solely being used for their care. My question is would there be any relief available to set against the rental income to bring the tax exposure down?

I appreciate your argument, but unfortunately the tax rules say that what you spend for living accommodation is not a business expense, but a personal expense, since everyone needs a place to live, and so cannot be offset against the rental income. See http://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim37928