Active discussions

Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

inheritance, will it affect our benifits?

51 replies

JingleTits · 08/12/2010 11:56

Im posting on here cos i know more people will see it and can therfore give more advise.

Myself and my husband are in reciept of some benifits. He works and we have four DC's. Everything we get were entitled to, it's things like working tax credits etc.

My husband is due to recieve about £10,000 inheritance in the next 12 months or so. My question is will the benifits take this into account and ammend what we recieve or as its a one off payment will they leave it alone??

Does anyone know? Thanks in advance guys

OP posts:
Original poster
JingleTits · 08/12/2010 15:06

Thanks everyone, youve all been a great help Smile

OP posts:
Sullwah · 08/12/2010 15:20

curlamama if you don't know what you are talking about then its best not to give someone advice. Especially when your advice is so scarily wrong and can alarm the OP uncessarily.

Inheritance tax - threshold is much much higher than £10k

Capital Gains - don't you have to make some sort of investment first?

Windfall tax - what the hell is this?

curlymama · 08/12/2010 20:25

Fair enough, they are just things I've heard of somewhere. I did say I didn't really know what I was talking about. But I'm not the only persn that has said it should be declared, so I'm not completely off the mark.

What does it count as when you win a load of money and then you have to pay tax on it? It's got to be a simelar system, and the government is not just going to let someone be given such a large sum of money without taxing it somehow.

mummytoatribe · 08/12/2010 20:33

Curlymama my understanding regarding that is that they tax the interest but not the capital. So if you won 10 million on the lottery, the win itself is tax free but the interest from it is counted as income and therefore taxed as such.

classydiva · 08/12/2010 20:35

yep it will, you can only have 8,500 in savings. if you can get the other 1500 paid to your children and put it in an account for them, then you do not have to declare it at all.

Eddas · 08/12/2010 20:37

may I suggest putting this thread into the money matters topic. You may get some more accurate advice.

Also check money saving expert forum, I imagine they'll be a thread on there with a similar question and I think that forum is brilliant.

darleneconnor · 08/12/2010 20:39

Please dont put post like this in AIBU!

On the money matters topic you'll get advice from people wh tend to know more about these things than the random people you'll get on here.

You haven't said exactly what benefits you're getting so I can't give a conclusive answer but it will not affect your tax credits.

It is capital, not income, and as such is treated differently.

If you are claiming means tested benefits such as housing benefit and council tax benefit, it will have an impact, even if you dispose of it immediately.

I say this a s a previous benefit appeal tribunal representative.

ivykaty44 · 08/12/2010 20:44

tax credits is based on any incoem you recieve that you pay tax on, so ISA acocunts do not count as you do not pay interest on ISA interest, so you could have £20k in an isa but the iunterest doesn't count and niether does the capital as it is tax free.

Maintenence doesn't count as single paents recieiving it do not pay tax on it

if you rent a room under the rent a room schem and the rent is not more than £80 per week - you do not pay tax on that money and you do not have to declare it for tax credit purposes

christmaseve · 08/12/2010 20:47

It won't affect your benefits, I'm pleased to tell you.

If you invested it really well and gained over £300 interest on it in a year then you would declare that and it will be taken as part of your income for assessing WTC and CTC, CB.

Niceguy2 · 08/12/2010 20:57

Jesus. OP please in future post stuff like this somewhere more appropriate.

I'm shocked at the misinformation here.

Given what you've posted no one can be sure as there's not enough information.

But essentially inheritance does not affect tax credits or child benefit as it's not classed as income earned. Xmaseve is spot on in that the interest you then earn is counted as income but to be frank given current interest rates I doubt it will matter.

Bobbiesmum · 08/12/2010 21:07

I was in a similar position, inherited a lot lot more than you when my mum died and we sold her house. Virtually all of it was used immeadiately to pay off big debts I'd incurred retraining in a new proffession.
I Was relying on the childcare element of FTC to be able to afford to go to work. Declared every penny and it didn't affect my FTC at all. I was gobsmacked but no guilt/worry re fraud.

fluffygal · 08/12/2010 21:22

It wouldn't count towards tax credits, but would towards benefits such as housing benefit/council tax benefit.

I am a student and my university grant and loans don't affect my tax credits- I rung up and checked.

twosoups · 08/12/2010 21:55

OP asks question about benefits and inheritance. Lots of misinformation given.

People with more knowledge weigh in and tell her to get more accurate advice.

Misinformation continues anyway.

I'm a professional who used to give free advice on MN. I stopped giving advice because the OP often ignored it and went along with the misinformed advice of other mumsnetters.

Why does that happen? Next time I want advice, I'm tempted to qualify it..."No proper advice considered. Random musings and speculation only".

Harumph!

ApocalypseCheeseToastie · 08/12/2010 22:05

I think you have to declare anything over 16,000, their is info on the website

christmaseve · 08/12/2010 22:10

It's 16K for HB. Annoying when you do know the rules and people post incorrectly, but then again rules change so I'm never sure I'm right.

HappyMummyOfOne · 08/12/2010 22:50

Anything over £6k will affect means tested benefits like HB etc. If you pay anything more than the min payment on debts it can be seen as deprevation of capital. Moving it to childrens names when not in trust will still be classed as being accessible and therefore yours.

If you purely claim tax credits you dont need to declare it. Morally its upto you, should you spend the money and still claim benefits other tax payers are funding?

christmaseve · 09/12/2010 09:48

I remember if debts are paid off in full, even a mortgage it isn't deemed as depriving yourself of capital.

Alibabaandthe40nappies · 09/12/2010 09:54

curlymama - the way inheritance tax works, is that it is paid out of the estate before remaining money is distributed among the beneficiaries. So any tax due will already have been paid before the money gets as far as the OPs husband.

But yes, post this in money matters OP because then you stand a chance of getting some reasonably accurate advice.

Fortheverylasttime · 09/12/2010 10:43

If the £100 000 or whatever is counted as savings, don't they take into account debt? The interest on a debt is more.

Original poster
JingleTits · 09/12/2010 11:03

Thank You everyone for your advise. And i see your point about posting in money matters. Thanks again Smile

OP posts:
christmaseve · 09/12/2010 11:21

Or just ring up DSS and they will put you right.

Alibabaandthe40nappies · 09/12/2010 11:24

Forthe - why would they take debt into account? Are you suggesting that debt interest is counted as negative income and that therefore people should be entitled to more benefits?
Please tell me you aren't.

ivykaty44 · 09/12/2010 12:35

Christmaseve -why would she phone Dss to be put right?

she needs to phone every source of benifit and that might not just be DSS but other depatments

christmaseve · 09/12/2010 13:15

Dss, tax credit helpline, whatever department pays the benefits. I've lost touch which the various names.

Xenia · 09/12/2010 13:22

Just be careful about what people write above. Also do take some advice. If it is under a will then it is very very common to vary a will and perfectly legitimately after death - they even did it for Princess Diana's will - to save tax and for other reasons. The money could then go straight to the children and perhaps as said above (not sure this is lawful though) the bits you want to use to pay debts those running the estate could pay direct to those to whom you owe the debt which woudl presumably make it harder to track that you'd had it although I doubt avoid it being "yours" for benefits purposes. Balance is under the will variation and held in trust for the children.

Whereas money given by parent to child is taxed as to its interest on the parents. If money is given from grandparent or anyone else to child it is not.