Hi Cinder, welcome to TP
We discussed this topic a few time, there's a link below to a recent discussion and links to some fact sheets on it.
If you put "extension" into the search box (top right) you'll find all the discussions we've had, there was quite a lengthy one (but I can't find it right now) where the implications were discussed fully with respect to; would it be deprivation of assets if you extended your house but your MIL needed to go into care not long after, so you end up with an extension and you're MIL's assets have been spent?
A lot of more knowledgeable people on here made comments, I'll see if I can find it later and post a link.
K