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Original poster

Tax Credits and house ownership

39 replies

BurntOutGirl · 28/01/2023 08:40

Hi. Hoping someone will be able to advise.

My parents owned their house outright as Tenants in Common. My Dad died in 2013 and his 50% was shared between my sister and l (25% each).

DH then left and we got divorced. Due to my low income l was awarded Tax Credits.

I know that l will soon be made to move over to Universal Credits and this is where l am worried.

My DS are currently 19 and 15yrs. The 19yr old has extra needs and is still in FT education as he has an EHCP. However from August -, when he turns 20yrs my benefits for him will cease. I will incease my hours but l can't go FT as he still needs input.

From what l have read l will get Transitional Protection for the first year. My concern is after that. Am l correct that as l "own" 25% of my Mum's house l will not be entitled to any Universal credit help? Despite me not receiving any "rent" from my mum... afterall it is her house!

Is it possible to sign my share over to my sister so l would be eligible for help?

OP posts:
DressingForRevenge · 28/01/2023 08:42

You would get UC, but nothing towards the mortgage. But where do you live now?

Original poster
BurntOutGirl · 28/01/2023 08:46

Northampton.

From what l have read, UC assume that as l own a house l don't live in - l receive rent for it. ... which they then deduct from my award

OP posts:
DressingForRevenge · 28/01/2023 08:56

I mean, are you renting now or living in another outright owned house?

I don’t think the assumption of rental income is correct.

Mirroredlove · 28/01/2023 08:59

If you sign it over to your sister you will be even more screwed because that would be classed as deprecating assets.

your mum will have to sell so you can put your money into a property you live in then you can claim benefits or you will have to move in with her. I’m sure there’s more options but this is why inherited houses should be sold when they are shared.

gogohmm · 28/01/2023 09:11

Once your dc turns 20 he will qualify for uc in his own right, also is he claiming pip, can claim that now

NancyVicious · 28/01/2023 09:48

Is there any caveat to the inheritance stating that your mum is entitled to live in the property until death?

Original poster
BurntOutGirl · 28/01/2023 12:23

DressingForRevenge · 28/01/2023 08:56

I mean, are you renting now or living in another outright owned house?

I don’t think the assumption of rental income is correct.

I have a mortgage on my own home.

OP posts:
Original poster
BurntOutGirl · 28/01/2023 12:30

Mirroredlove · 28/01/2023 08:59

If you sign it over to your sister you will be even more screwed because that would be classed as deprecating assets.

your mum will have to sell so you can put your money into a property you live in then you can claim benefits or you will have to move in with her. I’m sure there’s more options but this is why inherited houses should be sold when they are shared.

I have my own mortgaged property that l live in.

Would it still be classed as deprivation of assets if it's done over a year before l go onto UC?

The inherited house can not be sold as my Mum still lives there

OP posts:
Original poster
BurntOutGirl · 28/01/2023 12:32

gogohmm · 28/01/2023 09:11

Once your dc turns 20 he will qualify for uc in his own right, also is he claiming pip, can claim that now

Yes. He does get PIP. He will be starting a Supported Internship in September.

OP posts:
Original poster
BurntOutGirl · 28/01/2023 12:32

NancyVicious · 28/01/2023 09:48

Is there any caveat to the inheritance stating that your mum is entitled to live in the property until death?

Not that I'm aware of

OP posts:
riotlady · 28/01/2023 12:33

www.entitledto.co.uk/help/own-other-property

This suggests that the property can be disregarded if your mum is old enough to receive pension credit (she doesn’t have to actually receive it, just be the right age)

kerosene20 · 28/01/2023 12:34

It should be set up in the will that the executors own the half until your mum dies and then you get it. You need to see a solicitor to get advice on the specific wording in the will.

Original poster
BurntOutGirl · 28/01/2023 13:52

riotlady · 28/01/2023 12:33

www.entitledto.co.uk/help/own-other-property

This suggests that the property can be disregarded if your mum is old enough to receive pension credit (she doesn’t have to actually receive it, just be the right age)

Mum is 76yrs

OP posts:
riotlady · 28/01/2023 14:32

BurntOutGirl · 28/01/2023 13:52

Mum is 76yrs

Show quote history

Then it looks like it would be disregarded but the only way to know for sure would be to talk to DWP when you get moved over and explain the situation- although as pp suggests you might want to confirm the wording of the will first.

This link also states that property is disregarded if a relative of pension age is living in it

www.uceplus.co.uk/disregarded-capital

riotlady · 28/01/2023 14:35

Here you go, I’ve found it in the actual gov UC guidelines-

Premises lived in by a close relative The law
1 UC Regs, Sch 10, para 19

H2048 Premises that are occupied as the home by a close relative of a person are disregarded indefinitely where the close relative has

  1. LCW or
  2. reached the qualifying age for SPC1.

assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1085956/admh2.pdf

Stomacharmeleon · 28/01/2023 14:35

What is transitional protection?

titchy · 28/01/2023 14:37

In all likelihood you don't actually own 25% of your mums house. Assuming the will was made by a half competent solicitor, your mum will have the right to stay until she dies, with your dad's share being effectively held in trust. So the trust 'owns' his half. Your and your sister are the beneficiaries of the trust, but not until your mum dies, or the house is sold and your dad's share liquified.

Original poster
BurntOutGirl · 28/01/2023 14:44

titchy · 28/01/2023 14:37

In all likelihood you don't actually own 25% of your mums house. Assuming the will was made by a half competent solicitor, your mum will have the right to stay until she dies, with your dad's share being effectively held in trust. So the trust 'owns' his half. Your and your sister are the beneficiaries of the trust, but not until your mum dies, or the house is sold and your dad's share liquified.

We are on the deeds

OP posts:
Original poster
BurntOutGirl · 28/01/2023 14:45

riotlady · 28/01/2023 14:35

Here you go, I’ve found it in the actual gov UC guidelines-

Premises lived in by a close relative The law
1 UC Regs, Sch 10, para 19

H2048 Premises that are occupied as the home by a close relative of a person are disregarded indefinitely where the close relative has

  1. LCW or
  2. reached the qualifying age for SPC1.

assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1085956/admh2.pdf

Thankyou so much! Just hope that my UC Coach will abide by this

OP posts:
Original poster
BurntOutGirl · 28/01/2023 14:51

titchy · 28/01/2023 14:37

In all likelihood you don't actually own 25% of your mums house. Assuming the will was made by a half competent solicitor, your mum will have the right to stay until she dies, with your dad's share being effectively held in trust. So the trust 'owns' his half. Your and your sister are the beneficiaries of the trust, but not until your mum dies, or the house is sold and your dad's share liquified.

I really don't want to worry Mum... it was bad enough when l was getting divorced with my XH threatening to "go after her house" if l didn't give him what he wanted as a payout.... but l believe l can request a copy of the Will from somewhere

OP posts:
Original poster
BurntOutGirl · 29/01/2023 08:40

I have now got a copy of mg Dad's Will. Does this state Mum has a Right to Stay till she dies - and so gives me added "protection" in regards UC.

Tax Credits and house ownership
Tax Credits and house ownership
Tax Credits and house ownership
OP posts:
kerosene20 · 29/01/2023 10:09

That doesn’t give your mum the right to live in and gifts the house outright to you and your sister. That’s very unlikely to be what your dad intended, poor drafting.

Mirroredlove · 29/01/2023 10:19

Where on the will does it say your mum can live there? I can’t see it.

Sounds like his half is left to the kids so she will need to buy them out

Original poster
BurntOutGirl · 29/01/2023 10:19

kerosene20 · 29/01/2023 10:09

That doesn’t give your mum the right to live in and gifts the house outright to you and your sister. That’s very unlikely to be what your dad intended, poor drafting.

Bother. In regards Mum having the right to live there as far as my sister and l are concerned it is her property. If she needed to sell for care fees or downsize, then our share would be used for her needs.

OP posts:
Mirroredlove · 29/01/2023 10:23

Her own share will be used for care needs, your dads share can’t be used as it’s not hers.

Suppose she is lucky she has nice kids really and was a good mum otherwise sounds like she could be homeless tomorrow, the whole house is not hers.