Do my partner’s actions count for senior asset testing?

My mother owned a stock portfolio for many years, and it was always in her name. Her second husband does not dispute ownership. He now needs a retirement home and she has no assets or income other than the shares. She is in her 80s. His only asset is a share of the house. Are his actions considered part of the asset test for his elderly care? We believe that she cannot afford to pay her expenses and live on her own, and it will be worse if she has to sell the shares to pay the deposit for the accommodation. She seems to be between a rock and a hard place.

Rachel Lane, senior care guru, says all assets owned by a couple are taken into account, regardless of their name. The exception is the house which is exempt as long as one of them lives there.

Asset testing for couples in elder care can be a minefield.Credit:Simon Letch

If they claim to be separated and live apart (strict criteria apply), assets and income are assessed on the basis of legal ownership. Although at first glance this may seem attractive, you must consider all the consequences in terms of the cost of care and the implications for pensions. It can also be considered in any family law case.

This is a very complex area and specialist financial and legal advice should be sought. It is possible to pay part or all of the accommodation costs by daily payment instead of paying a lump sum, it is also possible to pay part of the lump sum and deduct the remaining daily payment. If she needs to sell small parcels of stock to get by, the capital gains tax should be minimal.

I have a beachfront vacation home purchased in 2008 that has only been used for family vacations and has never been rented out. Its value has increased tremendously recently, which raises the question of whether to sell it or not. I’m not clear on the capital gains tax on a vacation home versus permanent residence. In addition, if the holiday home is bequeathed to my children, would they be liable for CGT based on the considerably increased current value?

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Since the property was acquired after August 20, 1991, any expenses incurred on this property since you purchased it may be added to the cost base for CGT purposes. These include rates, property tax, maintenance and insurance. You will need to add these items, deduct the answer from what you think is the net selling price, and then apply the 50% reduction to arrive at the taxable capital gain.

If the house was jointly owned, half of this gain would be added to each person’s taxable income in the year the contract of sale was signed. Death does not trigger CGT, the house will pass to your beneficiaries at your base cost, and they will owe CGT if they sell it.

I am 68 years old and have $635,000 in a super account and $129,000 in a retirement income stream. I put money into my super from the sale of a rental property using the three year advance rule because I am still working. There is a surplus of $80,000 that I cannot put into super until 2025 because I have exceeded the cap of $330,000. As my husband is 75, the money cannot go to his supermarket. I would like to buy 10 year insurance bonds with the remaining money, but I don’t know what to buy or how to get them.

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