Income minus living expenses

hey there, I have a question regarding tax free gifts. We sold our mums house to pay for monthly care fees, so she has a very large lump sum in her account. She also has regular monthly pension income, and we would like to gift the pension income, however in the tax free gift information it states: 'You can make regular payments to another person, for example to help with their living costs. There’s no limit to how much you can give tax free, as long as: you can afford the payments after meeting your usual living costs you pay from your regular monthly income' So my question is, do care fees count as 'usual living costs', and if so, are these costs covered by the lump sum already in her account? in which case we can gift the pension income. Thanks in advance

Hi jetset79,
By selling the house you may need to consider any potenatial capital gains that may be due:
Capital Gains Tax: what you pay it on, rates and allowances
The care home costs count as living costs but as you are paying these from the lump sum they are not paid from regular income and you would therefore need to take this into account when cosidering any gifts.
Thank you. 

Hi there, thank you so much for the reply, I am having trouble understanding a bit of it, please could you clarify what you mean by: 'The care home costs count as living costs but as you are paying these from the lump sum they are not paid from regular income and you would therefore need to take this into account when cosidering any gifts.' Does this mean we would NOT need to take the care home fees into account when considering any gifts, as they are covered by the house sale? Thank you.

Hi there ,please could someone reply to my follow up question, thanks

Hi,

That is correct.

Thank you.

Hi there. Please can you clarify whether payments towards SIPPS/Pension and Investments are considered living costs from surplus income?

Hi Tamzin,
Detailed guidance on the tax relief available on private pension contibutions is provided at:
Tax on your private pension contributions.
Thank you.