Contrived tenancy

[rumblefish23]

My in-laws bought a house for my SIL to live in and claim housing bensfit. SIL recently told me that FIL claims she pays the maximum rent so she can claim maximum housing benefit.

They have put the landlord details in a different name so FIL is not technically the landlord, this is benefit fraud right!!

Yes.

Renting to a family member who claims Housing Benefit is allowed however it can often be a condition of mortgage/insurance that full market rent is charged which may be why they are charging the 'maximum' amount of rent.

The landlord should be declaring the amount of HB received in the same way as any other income via their self-assessment. If they're not declaring it on self-assessment then they're stupid as HB has a huge paper trail and it will be a matter of when they get caught rather than if they get caught.

The fact they've put it in a different name makes it look dodgy as hell. Why not put it in their own name?

There is no mortgage on the house, FIL bought the house after selling another house. We have tried telling them if they are investigated they will be in deep shit!

Does the money go to FIL?

It is benefit fraud. Surely they know that, otherwise why have they given false landlord details,?

As far as I know housing benefit goes to the tenant then they pay the landlord.

Who is the landlord? Surely he'd be liable to pay tax on the rent they're supposedly receiving.

It's not benefit fraud if she is paying the rent
She is paying full market rent, as she has to.
Nothing wrong with that.
If your fil rented to a stranger, would you have a problem with it?
What exactly is the issue?
Your sil had to live somewhere and pay rent to someone. Why not fil?

Except if they haven't declared that the landlord is a close relative it IS a fraudulent tenancy.

From the Shelter website:

Living in a separate home
You can get housing benefit or help with rent from universal credit if you rent a property from a member of your family who lives elsewhere.

You can only get benefits in this situation if your tenancy is a commercial one rather than an informal family arrangement.

You may have to provide proof of your tenancy, such as:

- a contract
- evidence of rent payments
- how likely your landlord would be to evict you

You may be asked if your relative took a tenancy deposit or provided you with a gas safety certificate before you moved in.

england.shelter.org.uk/housing_advice/benefits/housing_benefit_renting_from_family

My son rented a property that I own ...had a proper tenancy agreement and paid market rent...Unfortunately he was made redundant and claimed housing benefit for several months which was paid with no problem as it was easily proved he was a legitimate tenant with a paper trail to prove it ...

"They have put the landlord details in a different name "

that's interesting.

it must complicate his income tax.