My mother has advancing senile dementia and can no longer look after herself in her own flat in her sheltered accommodation so my wife and I have decided to have her come and live with us and our two young sons. We have decided to do it on a three-month trial basis. My mother has a state pension with a top-up pension from my late father's job so is not impoverished. My wife and I do not earn very much but as I work at home as a writer I have decided to cut back my paid work to give more time to looking after my mother. My mother, my brother and three sisters (one of whom has power of attorney for my mother) have all agreed that my mother will be able to and will want to (and indeed with need to) make a contribution to our household expenses, her share of utilities, food and so on, plus a small amount in return for my lost earnings as I take on more of her care. Can anyone tell me if this is taxable? And would it affect any allowances I might be eligible for as a part-time (or indeed eventually full-time) career and self-employed person? Has anyone any experience of this?
Thanks.