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Original poster

Do you lose your benefits if you inherit?

58 replies

AngelEyes46 · 27/04/2012 22:47

Just that really? A friend gets approx £600 per month in working family tax/child tax credits. Her ex pays a certain amount towards the house/kids etc. She has come into an inheritance and is worried that she may lose her benefits? Anyone know?

OP posts:
Original poster
AngelEyes46 · 01/05/2012 21:19

So if she paid off her mortgage (or moved taking on a bigger mortgage), paid off all debts (leaving her with very little cash), i.e. asset rich, she could potentially keep her benefits. She has been in contact with HRMC again who have said that benefits are not touched if she inherits but any interest on the income will be. She would also need a say if she buys a 2nd property (either in the uk or abroad)

OP posts:
thekidsrule · 01/05/2012 21:29

if she is living in the property then yes she can use the money to pay morgage of.and debts mine were cc,overdraft

and i was on income support very means tested and child tax credit

not sure if she could move and take on bigger morgage

um the second property i very much doubt it

basically i paid mine of in the house that was/is my home so i ended up asset rich but cash poor,but my benefit didnt change and once those were cleared it made so much difference financially and mentally

IllegitimateGruffal0Child · 01/05/2012 21:42

A second property? Really?

chenin · 02/05/2012 09:51

Please don't tell me someone can buy a second property and still receive benefits? Doesn't that go against everything that benefits are supposed to be for?

margerykemp · 02/05/2012 10:05

It won't affect her entitlement to working or child tax credit or child benefit or dla. If she claims ESA/ib/IS/JSA/HB/CTB she will lose these.

margerykemp · 02/05/2012 10:08

Marianne- you really need to go back and challenge that, even 10 years ago an inheritance wouldn't affect wtc/ctc.

adamschic · 02/05/2012 10:43

At one point in history, capital did affect WTC/CTC then they changed it to only take into account income on capital. I think this was when mine was about 8 so that would be a fraction over 10 years ago.

It was a huge help and I was able to cut my hours from full time to 4 days a week so I could do the school run/doctors appointments etc. Thank you labour government RIP.

thekidsrule · 02/05/2012 13:52

marg,you are wrong i was and am claiming IS and didnt lose it as i have posted circumstances on this thread,so i know it is possible and done so

was three years ago,maybe its changed but was very possible then

margerykemp · 02/05/2012 14:32

The only way you can keep it on is is to use it to pay off debts, but even this is a tricky thing to do and needs to be declared, getting and keeping a capital sum ends means tested benefit claims

thekidsrule · 02/05/2012 17:54

yes they will stop the claim when you get the money,pay your morgage of keep all paper work and then re apply.it took me about 2 wks to get reinstated

keep all paper work as they will o through it thoroughly,worked for me,maybe if its mean tested benefits phone then and have a chat,i really dont see a problem,but like i said mine was 3yrs ago

sorry should of made that clear about the claim stopping then restarting

NEScribe · 04/08/2014 10:29

My parents are on very low income and my father has just heard of an inheritence. He may need to go into care in a year or so. Can they use the money to jointly buy their council house since they would get a large discount. That means if he does go into care, my mother can stay in the house and they won't be able to force her to sell. So if he ends up in care for a number of years, my mum will have to use his half of house to repay care fees when she sells. But hopefully his share could pay for a better care home?
And at least she would get half of house value?
Alternative is to stay as they are and will lose their benefits so the money will be gone in about 3 years and they will be back on benefits.
They are both over 75 so not sure if allowed to use it to buy their home? They have always wanted to own their own home and love the house they are in.

court123 · 17/08/2014 11:34

Hi I'm a single mom our mom and dad worked all there life to buy there house our dad dialed over 10yrs ago and our mom is end of life she has left everything in her will 50/50 to me and my Brother I am on benefits as unable to work just yet our mom wants me to buy the council place I live and for my Bro to take a mortgage and finish paying the house off the money as he lives there now I be getting is 60.000-70.000 which is just enough to buy my home. Can I do this and still carry on with my befits and they wouldn't have to pay rent and gives me more flexibility to work part time
time and not be in dept. I have no1 to baby sit and starting nursery witch can only be 4 days where I live

court123 · 17/08/2014 11:35

Sorry about the spelling mistakes productive on my phone

IDontDoIroning · 17/08/2014 11:49

You can buy a house to live in or pay off your mortgage if you have one - obviously you would not then be entitled to housing benefit as there is no longer any rent to pay and I assume the housing rent element of universal credit would be the same but I would stand corrected.
Council tax benefit or what ever it is called now is payable to house owners who have a low income and not a great deal of cash in the bank. I think that the other income based benefits don't take the house you live in into account but for cash savings or shares they take a notional income against it.
Non income based benefits would not be affected.

Anyone coming into money should in the first place pay off their debts. You would not be accused of depriving yourself of capital by doing that obviously you should keep all paper work etc.

Buying or replacing a modest car shouldn't be seen as deprivation either but again keep paperwork.

Small cash gifts to family or children for special birthdays or weddings etc could be demonstrated as normal and not intentional deprivation but setting up accounts in children's names and putting a large proportion of the total in there would be.

Also buying a buy to let property or other investments will either be seen as deprivation of capital or the rental or other investment income will be taken into account.

Also lying about it /hiding it is fraud and you could very well be found out sooner or later and could involve paying back the benefits received or even being prosecuted.

mumstheword56 · 15/09/2014 18:43

My friend separated from her partner and moved out of her house. The mortgage was in her name as he was bankrupt and she moved into rented accommodation with her two children and claimed benefits but not housing. The house is in the process of being sold and, although the equity will be paid into her bank account, she has got to pay it straight to her ex (as he paid for the house) and she will be back to her current position.. The sum is in the region of £60,000 which, she may get £5,000 for debts he also had in her name. Will she lose her benefits even though the money is going in and out of her account on the same day?

amsingleagain · 16/09/2014 21:39

I get WTC and CTC. I am about to sell my house. Have split with my partner. Once I have pid him off from what he put in, and I am in my new property I will have possibly 40k. I plan to spend 20k renovating new property, and was going to pay 20k off mortgage. Do I have to declare that to HMRC?

morethanpotatoprints · 16/09/2014 21:46

You still get tax credits or you did do a while ago.
They are interested in income earned I believe.
Other benefits are different though and you can't keep these over a certain amount.
tell your friend to call the helpline and ask, its not like she'll gain anything by keeping it quiet, they'll only make her pay money back if she's had too much.

morethanpotatoprints · 16/09/2014 21:54

Of course you can have a second property and receive tax credits, I'm not sure about benefits though.
If your income is under the threshold it doesn't matter where it comes from.
As long as you declare all income both earned and unearned you aren't doing anything wrong.

sanfairyanne · 16/09/2014 22:06

court123, prob better to start a new thread on this. everyone will just answer the original op

RabbitSaysWoof · 17/09/2014 22:34

My land lord is a single parent, owns her own house, mine and another 2 at the moment and receives tax credits.

morethanpotatoprints · 17/09/2014 22:44

It doesn't matter what you have or own if you only receive a small income you are entitled to top ups.
An inheritance isn't an income, although of course inheritance tax or capital gains may be required over a certain amount.
It is also important to realise that although many people like to class it as so WTC/TC are not benefits.

ilovechristmas1 · 20/09/2014 20:37

My land lord is a single parent, owns her own house, mine and another 2 at the moment and receives tax credits.

i do think in these circumstances the landlady should NOT recieve tax credits,surely the rent she recieves is classed as income??

unless i suppose she is morgaged up to the hilt and dosent make a profit after expenses Hmm

marymary3 · 06/09/2015 12:15

Hey - why wasn't Circular A32/2004 included here re children's capital?

zicoson · 24/06/2016 10:18

hi if getting half the money from sale of house solic holding onto it has would b looking to use it buy a house when let jobmarket what happens to jobseekers allowance thanks

zicoson · 24/06/2016 10:21

hi there