Coming off UC due to house purchase question

[StrawberryKick]

Hi all

I'm a single, full time working parent to 2 DC. I currently receive a small amount of UC because I private rent and pay childcare.

My grandparent recently passed away, their house was sold and my parents have very kindly offered to gift me some of the proceeds (around £20k) as a deposit to buy a house. I was amazed that I could get a mortgage and have had an offer accepted on a small property (we live in a cheap area).

I don't have those gifted funds in my account yet, the solicitor says it's not necessary to do that until we complete in a few months time and I don't have any savings of my own bar a few hundred so I am still receiving UC (around £200 per month).

My question is, obviously I need to come off UC as soon as the house purchase goes through as I know I'm not eligible as a home owner but do I need to tell them exactly why or can I just say I don't want to claim anymore? The amount of paperwork they wanted when I did my claim a few years ago totally stressed me out and I'd assume they would want every single document to do with the deposit and sale. I wouldn't be claiming when the deposit hits my account so wouldn't be claiming anything I'm not entitled to

I'm just trying to spare myself some stress, and money as amazingly the mortgage will be about £300 cheaper than the rent I'm paying!!!

Thanks

I think it's probably so they have less paperwork to do, they haven't asked for a gifted deposit form or anything, just to see the funds in my parents account now and then said they need to see it in my account on completion day

From what I gather, it's only equity in additional/rental properties that's classed as savings.

Plenty of people have mortgages and claim UC. Give DWP a call.

Sorry to jump in on your post but I have a bit of a question about gifting money for a deposit.
A family member has offered to gift me deposit for a house purchase but it's in the region of 80k and everything I've read says that I would have to pay tax on that. Is that true? Tbh I've not got the money to pay tax on quarter of that.

What kind of tax? Solicitor hasn't mentioned that to me.

You can still UC as a homeowner (I have) as its about your circumstances and income, not whether you own or rent. However, you can't with that much money in your account.

They told me it's because of the amount. Think your amount is ok.
If I exept a smaller amount won't be able to buy anything near where I am, only looking at 2 beds but house prices are ridiculous around here. And not a chance my LO's dad would let me move out of this area 😤

Just did a quick Google and I think it's ok as a gifted deposit, it's only if it's gifted to you and you make money on it, so if it's in the bank earning interest.

What have you read? Do you have any links? If you are gifted £80k from someone you will not have to pay tax. If the person gifting you the money dies within 7 years of the gift there may be inheritance tax to pay but that will depend on the deceased's circumstances, and the amount drops each year after year 3.

You won't get the same amount of UC as you will no longer receive anything towards housing

They don't count equity that you live in as savings, no.

Your parents will still have to sign a form saying it's a gifted deposit and they still have to answer all the questions about how they got the money. Even if the money will come from you to the solicitors. I'm guessing you just haven't got to that stage yet

You'll be entitled to more UC as the work allowance when your renting is £379 and when you own and aren't claiming housing costs its £631.

www.gov.uk/universal-credit/how-your-wages-affect-your-payments

Impossible to know this as op would lose her rent element making overall UC potentially much lower. Very unlikely to be getting more than she is now.

She can earn more though before they take off deductions.

This. Surely your parents can transfer the money direct without it touching your account? Then surely you’ll still be eligible for the help you get towards childcare?

And congratulations! That must feel so good to be able to have your own property-the end of any uncertainty with landlords etc

It is the case. I know because I gave money to my son. It never went anywhere near his account, it was transferred directly to the conveyancing solicitor.

Solicitors need to understand the source of the funds they are receiving. OP is their client so they would have done ID checks on her when they took her on. They do not want to do ID checks on the parents, hence wanting it to come via her bank.

Its worth running the figures through a benefit calculator, because the amount you receive is so low its possible that it will be a zero award once the rent element is removed.

I just wanted to add - when I sold my house and claimed UC while living in rented I had to show proof to UC of the money going into my account and proof of house sale. They said I could continue to receive UC for 6 months or until the sale on the new house completed. I was also still able to claim a small amount of UC as a homeowner.

So even if the money goes into your account before being transferred to the solicitor, at worst you might have your UC payments paused until you have a meeting with them.

If you put your wage and age of your children here people might be able to do a calculation. The first £631 of your wage is not affected by deductions when you have a mortgage.

I think these rules could be different because op is not selling a house and having a lump sum form that to purchase another. It is not the same situation at all.

Ok well it's not always the case then. Some solicitors won't let you do that

Oh o had no idea, I'm sorry for being misleading!

Can I ask though, what is Luke like in real terms of how much more someone would get? So many people have said they don't get any help becsue they own, when actually they get more in their pocket than someone so gets rent contributions

Do they? I was always under the impression you receive more if you rent. Because you don't get any help from UC towards monthly mortgage whereas you do with rent

I thought best what the poster meant about the work allowance being higher, they would get more?

Not more overall as obviously the renter had to pay the rent but more in their pocket?

Maybe i misunderstood