Tax credits & inheritance

[projectameliajane]

I received a little over £7000 in May 2014 which all went into renting a house, getting furniture & baby items for our arrival in the September - none went into savings and therefore never accrued interest in my account nor do we have any of it left (it was in the solicitors account for 3 years prior to this and accrued around £200 in interest). At the time we claimed no benefits at all so it wasn't an issue. However I've received our tax credits renewal pack yesterday and I'm completely clueless on whether or not I have to declare the actual inheritance? My understanding from the forms is it would just be any interest gained on it? I'm not sure if my thinking is right, or if I don't declare anything because interest was not accrued in my account? I have rung tax credits to query but as usual had no luck getting through! Does anyone have any idea??

No, you don't need to declare it. As you said it is only income from savings that counts for tax credits assessments.

Would it not need to go in the 'other income' section? Or do inheritances not count as income?

It's not income, it's capital, therefore you don't need to declare it.

(You could have £1m in capital and still be eligible for tax credits.......Whole other thread)

No, inheritances do not count as income, essentially because they are not taxable by the recipient.

has anyone had someone come round to talk about wat happens if your child dies or resuscitation in case stop breathing

That wasn't what I was told switchedoff

No, you don't have to declare it.
I rang them when I received mine and was paid just the same.
I was sure they'd be stopped but they weren't.

Hmmm. What were you told fiveacres?

I can see that if you get interest from the bank if you put the inheritance into a bank account, that would have to be declared as income. But the lump sum itself??

I had to fill in a form stating what my savings were including property. As such am entitled to nothing

I get CB though.

But OP hasn;t saved it - she has spent it therefore no savings. You can;t have £1million in savings unless you have managed to put it all in tax free ISA's PEP's etc. HMRC will apply a notional interest rate to your £1m and that will be deemed income I beleive.

No it's only interest above £300 that matters. With UC this will all change.

I know. I was answering switchedoff's post :)

Fiveacres - are you sure that was for tax credits? Not other benefits - JSA, UC etc? I'm almost certain (although doubting myself now) that there is no upper capital limit for tax credits. However, you cannot claim other benefits: universal credit, JSA, housing benefit etc if you have capital / savings of more than £16k. So that does make tax credits different to everything else, which is why so many families, including middle-earners, are eligible.

Kewcumber - yes, if you put the £1m in a bank account, you would have to declare the income from it (although at, let's say 1%, the £10k would still mean you were eligible for CTC/WTC although maybe not the full amount.) However, most people wouldn't put the full £1m in a bank account. You'd spread it between: maximum contribution into your pension, maximum contribution into an ISA, pay off your mortgage, stocks and shares etc and therefore still be eligible for full tax credits it seems to me. Am I wrong?

Absolutely definitely for tax credits. Bizarre mine seems different, I filled the form in and explained I had a small source of additional income (from letting a house out) and it came back very firmly as my being entitled to £0!

If you only get 1% on £1m then you need a new financial advisor!

Stocks and shares get dividends and you have to include them.

It really isn't likely you will have any substantial savings and qualify for tax credits unless you earn very little and have made terrible investment choices. Or have used up your lifetime allowance and put the lot unto your pension.

Five acres but yours is income not capital

fiveacres

it is the rent that will have taken you over the threshold though, and this would have been considered income.
Savings are usually what you have earned already or inherited.
This is different to current earnings for the financial year.

My Mother passed away last year. My parents were tenants in common so I have inherited my mothers estate along with my brother and sister. My brother is executor, he refuses to share information with us. My mothers estate is half a house, my father who still lives there owns the other half. The property is not mortgaged. There was no cash, she was in debt. My siblings and I paid the funeral expenses and I cleared the overdraft on Dad's current account. There is a £5,700 MBNA credit card debt which they appear to have sold to Arrow Global who are using Drydensfairfax to collect. My brother has asked me for one third and refuses to tell me what advice he has taken to date to establish if the estate is legally bound to pay the debt. I appreciate the estate may be liable. My question is does anyone know from past or professional experience where we stand. I don't have any money to give anyone and can't afford legal advice. My brother is vile and as much as I love my sister she will worry herself into an early grave. They can both afford to pay if required. Any help greatly appreciated.

Hi champagnegirl I think you would be better off starting your own thread with this, maybe post in legal as well?

Thabksm . It's Inheritance I believed he had spent bit didn't. It's not classed as income so non taxable. So we are legit and whe we got it all was sorted legally .

We have a mortgage and NOT on benefits

@Champagnegirl44 any debts need to be settled before assets are distributed.