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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To think sister needs to declare inheritance

98 replies

CanIhavedessertfirst · 02/02/2018 20:29

Ok, this is a bit of a looooong story, so bare with me.

My sister lost her dad in November (we have different dads) and inherited £27,000. He had a council property and she has now acquired the tenancy and, as it was her father's home, she wants to say there for the foreseeable and I think it's most definitely the security she needs.

We have now lost our grandparents and are both set to inherit a sum of money each, adding to the capital she will have.

My sister receives esa and also housing and council tax benefits, she has always lived at home and never had such a large amount of money. She is by no means stupid, she is very careful with budgeting and saving, but I think she's being a tad naive in this situation.

I met with her today and she said her step mum (also received £27,000) has been spending her share so that she doesn't have to declare it to the dwp (am I wrong in thinking they will find out eventually?). My sister hasn't spent her share (she's a little more savvy) but hasn't told the dwp she has come into money. Today the tenancy was signed over to her and the housing association are aware her dad has passed away. She said she had to show bank statements, etc.

I worry she has done the wrong thing and she is going to end up in trouble. We have only just started speaking again, after almost a year (family stresses and shit) and neither of us speak to my mum, so basically I am the only family she has left. I don't know what to do, because I feel like I'm not in any position to tell her what to do (she's 26) but equally I know this probably counts as fraud. She says her dad and his solicitor were clever and that may be true, but she's my little sister and I worry.

Can anyone give me some advice? My husband thinks I should mind my own business and let her deal with any fall out, but I don't want to let her down by knowingly letting her get into shit.

OP posts:

saladdays66 · 02/02/2018 22:22

She says her dad and his solicitor were clever and that may be true

I have no idea what that means in this context. That they have tried to avoid paying tax? Sounds like the estate was below the IHT threshold anyway. But your stepmum needs to declare her money too.

Original poster

CanIhavedessertfirst · 02/02/2018 22:35

@saladdays66 I have no idea how a solicitor could do anything "clever", so I don't know if that is something my sister said to shut me up when I was giving her advice. I don't really know the stepmum, as my sister and I have different dad's, so she's not really anything to do with me. I only really know her to say hello to

OP posts:

PUER125 · 02/02/2018 22:40

Magpiemagpie, and Awwlookatmybabyspider, you are incorrect in thinking the Probate Office notifies the DWP about the content of someone's estate. Probate deals with the size of the estate and who is dealing with the administration of it. It is nothing whatsoever to do with the beneficiaries of the estate, so would have no details to pass on to the DWP.

Wauden · 02/02/2018 22:53

So she is on benefits and who is paying for her? Uh, taxpayers... working hard every week.

SingaSong12 · 02/02/2018 22:58

I volunteer at CAB. She could phone/go to local office. My general feeling is that if you think something might affect benefits tell HMRC, DWP or Council depending on the benefit. If it doesn't change things that's fine. If it does it avoids overpayments or other consequences. (Not here but for some people they don't report a change that might make them better off, then lose money because they can't get the extra payments backdated.)

Do not assume that any organisations will communicate about the change, tell each individually. That includes within a department - if there is a change that affects Personal Independence Payment (PIP) and Jobseekers Allowance tell each section just to make sure even though both are paid by DWP.

Original poster

CanIhavedessertfirst · 02/02/2018 23:02

@SingaSong12 I'll give her a text tomorrow and suggest she makes an appointment with CAB, I think that is great advice. I've received guidance from them myself and I found them really knowledgeable and helpful.

OP posts:

Original poster

CanIhavedessertfirst · 02/02/2018 23:08

@Wauden as much as I agree, I don't really want to go down that route with my sister, as I think telling her that is just going to cause another rift between us, and we've only just made up. I just want her to keep the roof over her head and not end up on trouble, and I know that means declaring it and hopefully she does that after receiving some advice.

OP posts:

Wauden · 02/02/2018 23:24

CanIhave, yep, I get it. I was just venting after a long week...
Blood, getting back together, inheritance, money, tax, and so on and on - been there. And back. Jeez, what a journey.

Original poster

CanIhavedessertfirst · 02/02/2018 23:27

@Wauden vent on! If it wasn't my sister, I know I'd be feeling the same as you...especially after a long week!

OP posts:

MountainDweller · 03/02/2018 00:19

Yes it’s a shame you can’t treat yourself a little bit. I would love it if my Mum could use some of hers to fly business class down under to visit relatives (she’s not really well enough to go economy). Also she is worried that she’ll lose her house in her 80s as once she’s spent her inheritance her pension credits won’t be enough to live on. It’s a worrying time. I noticed a PP mentioned you could use it for essential house maintenance though which is good.

Allergictoironing · 03/02/2018 08:06

@Mountaindweller I think the wording was pretty close to "Yeah the garage roof thing & gutters would be fine, but not something like a brand new posh kitchen & bathroom if yours are OK"

blankets4ever · 03/02/2018 14:13

Shame her dad didn't set up a discretionary trust for her to leave his money. She would then legally be entitled to it and not affect her benefits. Many parents of sick children do this.

givemesteel · 03/02/2018 14:22

Not sure why her dad was entitled to a council house if he had £27k in savings (at least, that's assuming your sister got his whole estate).

Not sure why your sister thinks she's entitled to have a council house if she has £27k plus whatever your grandparents left you. In many parts of the country that's enough for a deposit on a flat. I have friends who privately rent with no benefits who can only dream of a nest egg that size towards a house.

But that's why our benefits system is so screwed up. Sorry but I hope your sister does get caught.

ItsAllABitStrangeReally · 03/02/2018 14:29

When my mum died my sister banked my other sisters money for her (( who was in a similar position to your sister ))

Probably shouldn't have but fuckit, it wasnt a massive amount of money ((29k )) especially when you consider my mum had worked from the age of 14 until 2 weeks before she died at 62 because she was too scared to give up work.

retirednow · 03/02/2018 14:42

Givemesteel, she and stepmum both got 27k each, I don't understand it either, no one likes a benefit cheat and I have no sympathy when they get caught.

Original poster

CanIhavedessertfirst · 03/02/2018 15:05

@givemesteel they'd been in the council house for a long time and I think the savings may have been accumulated during the few years he was ill. I honestly don't know the entirety of it or if that makes a difference, just that she said he took early retirement. I don't really know how any of this makes a difference to the amount they were left, as I have never dealt with inheritance. Retirednow is correct, however, they apparently got £27,00 each.

I have sent her some of the links this morning, but she hasn't replied as yet.

I do understand what you mean, as myself and my husband currently rent privately and a mortgage was the first thing I thought about when my grandad said he was leaving us some money, as I want to leave behind something for our boys.

I'm not justifying her not declaring it, but she's never had to pay taxes and doesn't have children, so I don't think she entirely understands it beyond how declaring it will affect her. She did say it doesn't feel like her money and she doesn't have any intention of spending it. Again, I'm not justifying that, as - like a broken record, sorry - I understand both sides of the argument.

OP posts:

Original poster

CanIhavedessertfirst · 03/02/2018 15:09

@ItsAllABitStrangeReally Your poor mum! That's really really sad! My sister was an executor of the will, along with the stepmum, so she was already named in this case.

OP posts:

MrsFantastic · 03/02/2018 15:56

It's a change of circumstances and she needs to report it straight away. She isn't entitled to any means tested benefits if she has more than £16K in savings. She needs to use her own money until the money goes below £16K and then apply again. There is a taper between £6K and £16K so the amount of benefits gets reduced. Savings below £6K don't affect benefits.

At best it will be an overpayment, which she will have to repay it. At worst she could get prosecuted for benefit fraud. When she applied for benefits she would have signed something saying that she would inform DWP/HMRC about changes of circumstances.

www.entitledto.co.uk/help/savings

www.gov.uk/benefit-fraud

Wauden · 03/02/2018 15:59

Hi again. How did she never get to pay taxes? (Thinking of my £1,800 pa council tax.)

Stickerrocks · 03/02/2018 16:05

I think she means income tax, as she gets council tax benefits.

Bramble71 · 03/02/2018 16:18

If any of her benefits are income based (CTB & housing benefit definitely are), she has more than £16K in the bank and hasn't told the DWP she will likely be committing benefit fraud. The amount of benefit lost tapers when savings are between £6K and £16K. Over £16K, all income based benefits are lost.

If she is copying her stepmam and spending to get/keep her bank balance below the £6K, she could be considered to be depriving herself of capital in order to get benefits. Again, this is against the regulations.

She needs to stop claiming benefits and live off the capital sensibly (no lavish holidays, paying off debts that aren't overdue etc) till she is back within the applicable levels and then restart her claims. She's so lucky to have 'inherited' a council house when many people are on the waiting list for years and years.

I'm sure you don't want to see your sister interviewed under caution, possibly taken to court, given a criminal record and having to repay any overpayment. If I were in your position, I'd speak to her and let her know the consequences. If she laughs you off, are you prepared to let this go on?

laura65988 · 08/02/2018 10:14

You have told her now so if it comes back to her which it will then she has to take conveniences

QuiteLikely5 · 08/02/2018 10:18

If the money showed on her bank statement she is in deep trouble. That will go to HB for her award and they will award her nothing!

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