Claiming Universal Credit and Having additional properties

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Hello. Can someone please explain how this works as I am being a but thick..
I may need to claim Universal Credit in the very near future. I have 1 DD.

Me and STBXW have 2 rental properties. They are both in negative equity and the rent we receive only just covers mortgage and insurance. No profit is made.

I don't know how to input this on the UC application as I don't receive an income for them.

Can some kind person please help me.

Thank you

@IcedSpice

Are you able to live in one of the properties

Yes good idea- a property you are living in will be disregarded as capital for Uc. Who owns the house you currently live in op ? is that in negative equity too ?

You need to get advice on your situation. This includes whether your income from rent will count as income or capital. That could be through Citizens advice or another organisation. You must disclose all capital and income. What you are looking at is how it will be treated for benefits purposes. Link is for England and Wales

www.citizensadvice.org.uk/helptoclaim/

I am aware that income from lodgers and tenants of your own home is disregarded for UC - the regulations treat them, in effect, as not existing, so they wouldn’t be counted as occupying a room for the bedroom tax for example.

I’ll admit that it’s a while since I worked with UC and never dealt with anybody in this situation but as far as I recall you do have to declare income from letting another property.

I agree that you need to take proper advice

I've just looked this up in the CPAG handbook, and it's not its usual model of clarity.

It says that if there is no tariff income (which there isn't imo, because the value of the properties is less than the liability on them, so no capital value) the rental income is ignored.

If you're running the properties as a business, the income should be reported as self-employed earnings and the income is what's left after deducting expenses. However, you still need specialist advice.

I'd still get specialist advice though, OP! I have my supervision later, so may run it past my manager (mainly because I'm intrigued).

You can't claim U.K. if you have assets over £16k disregarding the equity in the home you live in. You need to sell them before you can claim state help

Uc obviously!

The housing element of uc isn't payable anyway if you own.

If you are currently working (paye type job) and you are made unemployed you can claim jsa for 6 months which is not means tested in the same way, they don't look at assets. I could claim that no issues

@gogohm

You can't claim U.K. if you have assets over £16k disregarding the equity in the home you live in. You need to sell them before you can claim state help

If you read the links posted above - if they are in negative equity then the OP won't be over 16k.

@LakieLady

I've just looked this up in the CPAG handbook, and it's not its usual model of clarity.

It says that if there is no tariff income (which there isn't imo, because the value of the properties is less than the liability on them, so no capital value) the rental income is ignored.

If you're running the properties as a business, the income should be reported as self-employed earnings and the income is what's left after deducting expenses. However, you still need specialist advice.

I'd still get specialist advice though, OP! I have my supervision later, so may run it past my manager (mainly because I'm intrigued).

It is less common that people run a property business as a trade - not entirely impossible but most people declare it as property income on their tax return.

Someone doing that would probably know that is what they are doing as they would be self-employed.