Gifted money for house and universal credit

[HELPNEEDHELP12398765]

I'm hoping someone might be able to help me. My husband and I have separated. I am in the family home with the kids at the moment whilst he is renting. I work part time and am claiming universal credit.

He wants to sell the house (jointly owned) so that he can buy somewhere else. I however would prefer to stay in the family home to minimise disruption to the kids and there might be the option to buy him out with help from family. They have said they might be able to gift me the money to buy him out rather than me inheriting money from them further down the line. It would be approx £80k.

I understand if they died within 7 years of gifting the money there would be inheritance tax implications but my worry right now is how it would affect my universal credit claim. As I would have savings of over £6k as soon as it hits my bank before it gets transferred to STBEX to buy him out, would my benefits stop and how long for? Would it be seen as deprivation of assests if I was gifted it and used it to buy STBEX out?

Can they not just pay it straight over to him?

Can your parents buy his share? Then gift you their share later

Universal credit is for people who don’t have savings or large sums gifted to them. So maybe you won’t be eligible?

I don't think it would be deprivation of assets if it's towards the value of a house but I think it needs to be explicitly clear that the money is for that. A paper trail may be needed.
Or ask your family if they can just send it straight to him?

@Ariela

Can your parents buy his share? Then gift you their share later

That could be an option, I hadn't thought of doing it like that.

@MeetMeAtOurSpot

Can they not just pay it straight over to him?

Maybe, I wasn't sure how that would work, if it would mean they then owned part of the house rather than me. I think I probably need to speak to a financial advisor about the options.

Any transfer of money towards purchase of house requires solicitor to manage deed transfer.

The money could stay with parents before solicitor requires it then go directly to him

@TorringtonDean

Universal credit is for people who don’t have savings or large sums gifted to them. So maybe you won’t be eligible?

That's my thought, that my entitlement to benefits would stop. I have had to go on universal credit for now as I don't work full time, have no savings and have children to look after. Whilst the children are young I will struggle to increase my wages significantly but I'm hoping in a few years time to be able to increase my hours at work and eventually come off universal credit.

My family would only be giving me the money now so that I could buy him out and stay in the family home with the children. If I wanted to use the money for anything else I wouldn't be able to. Instead I would be getting it as an inheritance much further down the line.

It would be a simple transfer of equity. A solicitor would draw up new deeds in your sole name, and your parents would pay money to the solicitors client account.

They would at the same time pay off your ex, and then transfer to your sole name. Money would not hit your account.

If you have a mortgage, then different, as you would have to prove that you can have your portion of the mortgage alone.

@WomblingKnobhead

Any transfer of money towards purchase of house requires solicitor to manage deed transfer.

The money could stay with parents before solicitor requires it then go directly to him

Thank you.

@fromdownwest

It would be a simple transfer of equity. A solicitor would draw up new deeds in your sole name, and your parents would pay money to the solicitors client account.

They would at the same time pay off your ex, and then transfer to your sole name. Money would not hit your account.

If you have a mortgage, then different, as you would have to prove that you can have your portion of the mortgage alone.

Yes this will be the complicated bit. I won't be able to get a mortgage on my own as I don't earn enough but with the help of family again i may be able to get a joint income sole proprietor mortgage (I think that's what it's called).

That will be a sticking point, as the lender will not release their charge (and the deeds) until their mortgage has been satified, or replaced.

JBSP mortgages are not that common, so I would speak to a mortgage advisor first.

@fromdownwest

That will be a sticking point, as the lender will not release their charge (and the deeds) until their mortgage has been satified, or replaced.

JBSP mortgages are not that common, so I would speak to a mortgage advisor first.

Yes I definitely need to speak to a mortgage advisor and see what my options might be, if there are any. I've had a couple recommendations for local ones so need to give them a call.

You may be able to stay in the house until your youngest child is 18.
Although I would urge you to take proper legal advice.

UC isn't the problem here, it is fine for your parents to transfer the gift straight to the sol. It's not deprivation of capital as you never have access to the money. The DWP don't have a problem with people buying property to live in, it saves on the overall benefits bill.

The potential issue is the mortgage, speak to a mortgage adviser to see if it is possible to get one. Barclays used to offer the kind of arrangement you're looking for, not sure if they still do.

It is a mortgage adviser you need, not a financial adviser. The latter deals with investments, insurances etc, not benefits.

@CorrBlimeyGG

UC isn't the problem here, it is fine for your parents to transfer the gift straight to the sol. It's not deprivation of capital as you never have access to the money. The DWP don't have a problem with people buying property to live in, it saves on the overall benefits bill.

The potential issue is the mortgage, speak to a mortgage adviser to see if it is possible to get one. Barclays used to offer the kind of arrangement you're looking for, not sure if they still do.

It is a mortgage adviser you need, not a financial adviser. The latter deals with investments, insurances etc, not benefits.

Thank you, I will speak to a mortgage advisor and see what is possible.

I took over the existing mortgage and he was released. Sounds a lot simpler than it was! But I don't think I'd have got the same mortgage if I'd started from scratch plus you save cost of any arrangement fees.

Just to say that we did this.
My ex used it as his deposit.
He has kindly stayed on the mortgage AND been able to get a new mortgage (it's not treated as a 2nd home purchase as he doesn't own the home). The only effect is it limited his borrowing to x4 not x5 salary.
Tips are that your mortgage company will need to send their OK (called compliance) addressed to the solicitor if you're using one. They sent it to us so land registry rejected it.
The transfer form seemed quite complicated. I wasn't sure which bits needed filling in tho my guess turned out to be accurate. But we still paid the solicitor £1200!!