Everyone has a gifting allowance for inheritance tax purposes and up to £3,000 a year can be given away to any one individual while an unlimited number of £250 gifts can be given to different individuals each year. For any other assets given away the person who has given the assets away must survive for seven years before they become free of IHT.

Of course people who are young and healthy can give away assets without any complications but those who are considering disposing of their assets should always be aware that a local authority will often look unfavourably upon a situation in which a person begins to show evidence of a lavish lifestyle in contrast to how they lived before. In those circumstances the local authority may investigate further and could come to regard it as a deliberate "deprivation of assets".

The best way to prepare, or to provide a little certainty into preparing for the inevitable costs that will be incurred is to save up and again there are measures that can be taken to make the best preparations. So, couples can take action by keeping their savings separate, as, by doing so the local authority would not have the right to use the assets of a spouse to fund their partner's care fees, so joint accounts should be avoided wherever possible.

Also, those owning property jointly should consider moving from owning as joint tenants to being tenants in common. The difference is that under the joint tenancy a surviving partner automatically owns the whole of the property on the death of their spouse or partner. This makes it impossible for any of the value to be excluded if that person subsequently goes into care. However, with tenants in common each person is able to specify in their will who is to receive their share of the property.

Another alternative for some who would otherwise be faced with the unwelcome prospect of selling their home to pay for care may be to release equity from it with the debts to be paid after death. A benefit of this method is that the person who moves out and into care can rent out the house and money raised in this way can contribute towards that person's care costs. If that person's assets exceed the nil-rate band for IHT, which is currently £325,000 per individual or £650,000 for a married couple, reducing the value of the home could save that person's beneficiaries having to pay inheritance tax on some of the excess.