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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Lump sum. Is this fraud?

30 replies

ItsAllAboutTheLighting · 30/11/2021 21:12

Applying for student loan and they want my husbands earnings from 2019/20

That year we sold a house DH inherited and bought the house we're in.

One of the questions is "did you receive any other taxable income or lump sum"?

I didn't think we need to declare it because it was a house sale and purchase. We never actually received the money it went from solicitor to solicitor and house was bought outright.

But DH thinks we do (which I must admit, does sound correct in theory).

It's just the answer yes, and we received a lump sum makes it sound like I don't need a student loan when I most definitely do...

OP posts:
Original poster
ItsAllAboutTheLighting · 30/11/2021 21:14

What I mean is, it sounds like saying yes means that we still have that lump sum...

OP posts:
ArdoCycle · 30/11/2021 21:16

I think the correct answer is yes you did receive a lump sum, because of the inheritance - if you think about it you now won’t have a monthly mortgage payment, which would presumably help towards uni fees?

PatriciaHolm · 30/11/2021 21:22

I think the key thing here is "taxable".

The proceeds from your home assuming it was your main home are not taxable, so no, you don't have to declare it.

GertrudePerkinsPaperyThing · 30/11/2021 21:23

I would think you didn’t need to disclose it but I’m no expert

ImAVaccinator · 30/11/2021 21:24

I agree with PatriciaHolm, taxable is the key word and you won't have paid tax on it so it's non declarable. I had similar with child tax credits this year and they told me house sale money isn't counted.

EasyLikeSundays · 30/11/2021 21:32

No you definitely don't need to declare that

DeepaBeesKit · 30/11/2021 21:44

Did your DH pay tax on the value of what he inherited?

The proceeds of the house sale wouldnt be taxable if it was your primary residence (eg your main home, that you lived in)

Original poster
ItsAllAboutTheLighting · 30/11/2021 21:53

@ArdoCycle

I think the correct answer is yes you did receive a lump sum, because of the inheritance - if you think about it you now won’t have a monthly mortgage payment, which would presumably help towards uni fees?
We do have a mortgage.
OP posts:
Original poster
ItsAllAboutTheLighting · 30/11/2021 21:55

It wasn't our main home, it was empty.

So we do have to declare it because he did pay tax on it?

Annoying thing is, we have his 2020/21 earnings but they don't want those ones.

OP posts:
HippeePrincess · 30/11/2021 21:55

Also if income is vastly different then you can ask for a current year assessment

Original poster
ItsAllAboutTheLighting · 30/11/2021 21:57

I think that's what I need to do.

OP posts:
CurlyhairedAssassin · 30/11/2021 21:58

Sounds like you should have paid capital gains tax on it.

chesirecat99 · 30/11/2021 22:03

Yes, you do have to declare it if he paid tax on it.

However, if your income this year > 15% less than the year used to assess your student loan, you can apply for a current year income assessment. You have to apply using the 2019/20 income first though.

media.slc.co.uk/sfe/currentyearincome/index.html

Original poster
ItsAllAboutTheLighting · 30/11/2021 22:05

Ok so I can do both.

I can send the first one, along with the second one with a covering letter explaining?

There's way more than a 15% drop in income.

OP posts:
Boombastic22 · 30/11/2021 22:05

You own a second home but you still want a student loan? I guess it’s not a grant but if it’s means tested then sounds like you should declare.

GremlinDolphin4 · 30/11/2021 22:09

You most probably paid capital gains tax on the inherited house so will have to declare it?

HollowTalk · 30/11/2021 22:24

You didn't receive a TAXABLE lump sum though, did you?

Doobydooo · 30/11/2021 22:24

Declare the income for 19/20 and include the house sale figures. Is this your first year of study? Then complete and upload the cyi form with his estimated income for this tax year.
They will then contact him around May of next year to confirm actual figures and request evidence to ensure you've not been under/overpaid.
Taking around 3 weeks to review if you already have an approved application right now.

PatriciaHolm · 30/11/2021 22:31

You only pay CGT when selling an inherited home if the value of the home has increased since you inherited it. If you sold as soon as probate was complete, that's unlikely.

user1471457751 · 30/11/2021 22:44

Did you have to pay inheritance tax or anything like that?

fiftiesmum · 30/11/2021 22:53

This is for a loan not a grant. He will get the basic loan regardless of your income and a loan for fees.
It is quite possible that your income might still be too high to get the extra means assessed loan.

tara66 · 30/11/2021 22:57

I think the threshold for IHT is GBP350,000 and there is no tax on sale of a property if that is your only one.

Original poster
ItsAllAboutTheLighting · 01/12/2021 08:41

@fiftiesmum

This is for a loan not a grant. He will get the basic loan regardless of your income and a loan for fees. It is quite possible that your income might still be too high to get the extra means assessed loan.
Believe me, it's not ☹️
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Original poster
ItsAllAboutTheLighting · 01/12/2021 08:42

@Boombastic22

You own a second home but you still want a student loan? I guess it’s not a grant but if it’s means tested then sounds like you should declare.
Do I?! Where is this second home that you speak of?

I will sell that one and pay off the mortgage on this one!

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Original poster
ItsAllAboutTheLighting · 01/12/2021 08:43

Seriously though, thanks for your help.

It's been really really helpful. I know what to do now @chesirecat99 you helped a lot.

OP posts: