Benefits if being gifted a property??

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We have a relative who is on benefits as they are autistic and unable to hold a full time job.

They are living in a council property but hate it, and for various reasons it is making their mental health worse. They desperately want to move closer to where they have family.

Another family member could potentially buy them a property in their ideal location, but we don't know if this would impact their benefits. We can't afford to cover their living costs, and they aren't able to work. They could own the property (it would be gifted to them) or they could pay rent, whichever worked best.

Does anyone have any experience of this? I'm struggling to find accurate information on if they'd still be able to claim benefits in this situation.

i know of someone who's son is severely handicapped and they bought him a home and hire care givers to provide care 3 times a day. he lives close to the parents and no one worries about eviction and yes he gets all the financial support the government has available.

Actually it is.

Yes. You are allowed to own a home. One property only. The value of that property isn't taken into account.

WTF is it then?

So I have seen this turn out really badly. One of my learning disabled patients inherited a house which he owned outright. Within a couple of years he needed to move into a care home. The property was sold to finance this. If the house had been left to his other brother his care would have been paid for by the state and his other brother would have had a house! But deceased Mum thought she was giving security to the disabled son.

Why can't he own it?

He can, but there are complex tax rules, particularly as it is not the donors own home, you can give unlimited amounts out of “income”, but not property.
However as I said there may be special allowance for disabled accommodation

You pay in to it over the years like any pension.

Jewellery, antiques or family heirlooms are not counted as assets when calculating benefits.

But a "gifted" property may be subject to iht in time, or if rented to family member cgt. Many councils restrict benefits for rentals within family, but some are not means tested (like PIP) Can those considering the purchase afford to receive a token amount or nothing in rent? For a single occupier the housing allowance would be pretty low anyway.

You definitely can rent from a relative and get it covered by hb. I know someone who does this for their relative, they are millionaires (not through property).

That said I can see why this should be the case. We are all individuals, people need to rent from someone and if they are on low income what's the difference for the tax payer to be paying someone's relative who will probably ensure them property is well kept or a greedy landlord with multiple HMO's?

Thank you all.

To clarify, there are no mansions involved, rather a one bedroom flat I suspect.

The concerns over future care costs are not something I'd considered. The gifting relative is fairly wealthy and has other assets so this hopefully wouldn't be an issue. Half of the gifting relative's money would eventually go to the lady in question, and the rest to us, a trust has already been set-up for her long term care when the relative dies. Obviously at this point benefits would end, and that's completely as it should be.

We would prefer her to own the property herself, if possible, as she wouldn't be as settled knowing it wasn't securely hers. We would need to consider who funds upkeep.

I saw her this week and she was just so upset by living arrangements, being displaced from her location, it was very hard to see. Hopefully longer term a solution can be found.

The gifted property is fine if the giver lives for 7 years. If not, and the estate doesn't have enough to cover inheritance tax there may be tax to pay on a sliding scale.

Once the 7 years have past there are no tax implications.

I am in this position and we took financial advice to make sure. There is also no stamp duty to pay on a gifted purchase.

Sorry, I stand corrected.

If anyone is interested the rules are here
www.entitledto.co.uk/help/savings

I think your wealthy relative should seek advice from a solicitor with experience in setting up discretionary trusts for disabled people. There are ways of doing it that won't affect benefits. It might be possible for the property to be legally owned by a trust with the disabled person named as the inhabitant.

The gifted property is fine if the giver lives for 7 years. If not, and the estate doesn't have enough to cover inheritance tax there may be tax to pay on a sliding scale.

Once the 7 years have past there are no tax implications.

If the house is given into a disabled persons discretionary trust then IHT does not apply so the 7 years is not an issue.
With an ordinary discretionary trust IHT does apply and again the 7 years would relevant so it's important to get specialist legal advice if going down the route of a trust.

Wouldn't it make more sense for the wealthy relative to keep ownership of the house and let him live in it? They could put in their will whoever it goes to doesn't get it until he can no longer live independently or something.

That way he's not got the responsibility of owning a house and any complications with benefits shouldn't happen.
Even if currently owning a house doesn't effect benefits, I wouldn't like to guarantee that would never change within a lifetime-you've seen the reactions here of "you could own a million pound property and still claim benefits?" And that would be a awful thing for him to have to navigate, plus if he owns it then theoretically he needs to do any repairs etc which again might be difficult to decide who is responsible for it if wealthy relative dies or decides they're not doing it.

I have support workers who help with arranging all repairs etc