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Unusual claim (help?)
GhostHunter_3
Posts: 710 Forumite
Hi
How would me and my husband be affected if we rent a house from a family member?
To put you in the picture heres a summary:
About 2 years ago we owned the property we are now hoping to move back into and rent.
When we 'owned' it we paid a mortgage. Its a 2 bedroom house. We couldnt keep up the mortgage repayments and fell behind by £1,000 so we were threatened with reposession.
When we previously lived there we had full Council Tax Benefit as we were both self employed and the business brought in a low income.
I couldnt claim Income Support/Job Seekers Allowance as it would stop our Working Tax Credit awards, and this is what was paying the bills (but not the mortgage). Infact we would end up with nothing as my husbands self employment would cancel out all entitlement for me. We paiy our own National Insurance as self employed.
Around that time my husbands Nan had sold her own house as she was moving to a new care home. From the sale of her house she bought our house outright at a ruduced cost (saving us from reposession at the last minute) ploughing the money into a trust fund.
She also bought us a static caravan at a nearby site, which we moved to and have been living in since.
The house was rented out to other tenants whose rental was used to pay for some of the care home fees. The current tennants contract is due to expire next month and we have been given the chance to move back in and rent it.
The rental for the 2 bedroom property will be £400 per month (plus bills). Which is well below the area asking price (£550 - £650 acording to local papers and letting agent) for such a place. Again the money will go towards the fees for the care home as the relation is self funding and gets no help from the government.
Bearing this in mind my questions are:
Will this make it difficult for us to claim Housing Benefit and Council Tax Benefit (because we are related to his Nan)?
How can we show this is a genuine case and not a 'con'? I am worried they will think we are trying to fiddle extra money from the benefits.
Will they take into account or be able to see we previously owned / mortgaged the property? How will this affect us?
What other benefit may we be entitled to claim?
My husband and I are currently both registered as Self Employed, (we pay our own National Insurance). Even though our hours are few.
I receive aprox. £200 a month tax credit benefit (I think thats from both of us).
The business brings in aprox £300 a month but it can be far less or a little more, we do not draw wages from the business as it self funds itself.
My husband also has a part time job in the evenings doing some cleaning work (2hrs X 5 days) and earns around £150 - £200 a month.
I am hopefully due to start doing the same job with him by the end of the month and would therefore also be bringing in £150 - £200 per month.
Will this affect us?
Sorry theres so many Questions but I am getting prepared and anxious as this time I want it to be successful.
THANK YOU!
Heddwen.
How would me and my husband be affected if we rent a house from a family member?
To put you in the picture heres a summary:
About 2 years ago we owned the property we are now hoping to move back into and rent.
When we 'owned' it we paid a mortgage. Its a 2 bedroom house. We couldnt keep up the mortgage repayments and fell behind by £1,000 so we were threatened with reposession.
When we previously lived there we had full Council Tax Benefit as we were both self employed and the business brought in a low income.
I couldnt claim Income Support/Job Seekers Allowance as it would stop our Working Tax Credit awards, and this is what was paying the bills (but not the mortgage). Infact we would end up with nothing as my husbands self employment would cancel out all entitlement for me. We paiy our own National Insurance as self employed.
Around that time my husbands Nan had sold her own house as she was moving to a new care home. From the sale of her house she bought our house outright at a ruduced cost (saving us from reposession at the last minute) ploughing the money into a trust fund.
She also bought us a static caravan at a nearby site, which we moved to and have been living in since.
The house was rented out to other tenants whose rental was used to pay for some of the care home fees. The current tennants contract is due to expire next month and we have been given the chance to move back in and rent it.
The rental for the 2 bedroom property will be £400 per month (plus bills). Which is well below the area asking price (£550 - £650 acording to local papers and letting agent) for such a place. Again the money will go towards the fees for the care home as the relation is self funding and gets no help from the government.
Bearing this in mind my questions are:
Will this make it difficult for us to claim Housing Benefit and Council Tax Benefit (because we are related to his Nan)?
How can we show this is a genuine case and not a 'con'? I am worried they will think we are trying to fiddle extra money from the benefits.
Will they take into account or be able to see we previously owned / mortgaged the property? How will this affect us?
What other benefit may we be entitled to claim?
My husband and I are currently both registered as Self Employed, (we pay our own National Insurance). Even though our hours are few.
I receive aprox. £200 a month tax credit benefit (I think thats from both of us).
The business brings in aprox £300 a month but it can be far less or a little more, we do not draw wages from the business as it self funds itself.
My husband also has a part time job in the evenings doing some cleaning work (2hrs X 5 days) and earns around £150 - £200 a month.
I am hopefully due to start doing the same job with him by the end of the month and would therefore also be bringing in £150 - £200 per month.
Will this affect us?
Sorry theres so many Questions but I am getting prepared and anxious as this time I want it to be successful.
THANK YOU!
Heddwen.
0
Comments
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From a council websiteHousing benefit is not awarded to you automatically - you must claim it. You cannot claim housing benefit if you live with and pay rent to, a close relative or in-law. If the relative from whom you rent the flat does not live there you can claim housing benefit provided that the tenancy is let on a commercial basis. Benefit is usually awarded from the Monday following the date a claim is received by the council.
The fact that you rentteh house from a relative shouldn't effect your council tax benefit claim, as long as you meet the rules for HB above. (most of the rules are the same).
Previous properties wont effect your claim, but remember that HB and CTB take in to account savings, this includes any money held in business accounts for business use.(unless your a limited company).
As you say, your husbands income would be enough to cancel out IS. But for future refererence, if you get IS you will receive CTC for any children you have.I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.0 -
That rule applies to a previously owned homethat you now rent, its to stop people selling their house and the renting it back and claiming HB as a scam.I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.0
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Housing benefit is not awarded to you automatically - you must claim it. You cannot claim housing benefit if you live with and pay rent to, a close relative or in-law. If the relative from whom you rent the flat does not live there you can claim housing benefit provided that the tenancy is let on a commercial basis. Benefit is usually awarded from the Monday following the date a claim is received by the council
So does that mean we do not have to go through an agency? There would still be a proper private tennancy agreement (assured short/longhold contract).
With reguards to "HB and CTB take in to account savings, this includes any money held in business accounts for business use.(unless your a limited company)." No we are not a Limited Company, let alone we dont even make enough to consider charging Income Tax. We have NO savings (its been a tough few years getting back on out feet). The business accounts are at present still in arrears!
In view of the current tennants contract due to expire next month can we start making a claim now as we know what date it should be vaccant? Obviously the claim wouldnt start until after we moved in (Benefit is usually awarded from the Monday following the date a claim is received by the council. ).
Thinking even further ahead how can I guestimate the household bills so I can start a budget planner? Already knowing the postcode and layout of the property (radiators etc) Are there websites that can tell me the prices or can I call and enquire with the various suppliers? Just so I dont get a shock to find the rates have increased these past few years!
Thanks again.0 -
You should be okay as long as the rental is done on an official basis (rent book etc), as she's previousy rented it out commercially, it should give enough evidence to shows its not just being done as a scam.
The general rule with the self employed side, is that they will use your accounts to calculate your self employed income and add to that any employed/outside income.
If it comes to a positive income figure, then they'll get your average income from that. If its a negative income figure, then you'll get the full rate of HB/CTB.I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.0 -
I can assure you it will be a negative income! Thanks for the advice it really helps! Its a mobile valeting business, we have no workshop and just do the small office bits at home. The business has been running now for 5 years this year (October) and its still just self funding.
Thinking even further ahead how can I guestimate the household bills so I can start a budget planner? Already knowing the postcode and layout of the property (radiators etc) Are there websites that can tell me the prices or can I call and enquire with the various suppliers? Just so I dont get a shock to find the rates have increased these past few years!0 -
I know how you feel, my self employment income is negative as well.
From experience the general bills will most likely not be too different from where you are now, heating bills and electric bills dont vary much by property for the same people.
You can find out the full Council Tax figure from the valuation officewebsite
http://www.voa.gov.uk/council_tax/cti_home.htm
and then check the tax band on your local councils website to get the anuual rate.I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.0 -
Hi
Well infact living in a static caravan there are many bills we dont pay* and others at higher prices (because the sites consumption is comercial costs often passed onto us).
*Council tax, tv lisence,water rates, sewage rates,we dont hav e access to a landline so have to pay for mobiles and wireless internet conection (3G) which is extortionate compared to a landline with BradBand and a homephone compared to a landline. So although were saving somewhere its counteracted by added costs elsewhere if that makes sense.
Our previous 6 monthly gas bills have been £295 and £115 billed every 6 months. But in a household one can pay a fixed amount per month. I recall we used to pay around £25 a month for two of us and we didnt spare much gas or electric (our final bill was still lower than £400.)
Thanks0 -
Hiya,
Just a note as it would be advisable for you to check with your council before you claim, officially the council will not pay housing benefit on a property that you have owned in the past 5 years unless you can prove that you could not have carried on owning the prop - so they would need to see the letters about repossession etc or may not pay, the fact that you sold it at a reduced rate may go against you.
Also a Grandparent is classed as a close relative for HB purposes, this does not exclude you but does make it more complicated as they will want to be assured that the tenancy is a commercial one. They will ask questions such as would you be evicted if you did not pay the rent and they may also use the fact that your rent is reduced to make a decision that the tenancy is not commercial and not pay you benefit.
Also you say she put the house into trust, are you beneficiaries of this trust? If so you can't claim HB on the property.
I think the best thing to do would be to get down to your local welfare rights first for some proper advice as the last thing you need is to move in and then find you can't claim, they would also be able to assist if they felt your claim was wrongly refused as you would have to go to an appeals tribunal.
Good luck and let us know how you get on!
Love,
Lally
-X-0 -
Hi
Thanks, but I am a little confused now!
Where would I find my local welfare rights office?
We dont have any paperwork left from the reposession order etc. Although we do know the mortgage comany details so erhaps they may have it on file somewhere?
We had no choice other than reposession so sold it at reduced price for quick sale and nobody else was interested even though it was put on the market.
No we are not beneficiaries of the trust. Infact the trust is there as an inheritance to my husbands parents. Unless of course the main funds to keep the grandmother in the home run dry thus the house would have to be sold.
Yes we would deffinately get thrown out if we didnt keep up rent payments, we are being treated no differently than the current lodgers. It has been offered to us as a better way to live than we currently have.
Thanks
confused!0 -
Hi if you put Welfare Rights Office in Google you will get the phone number and address for your area ,and when its open,they will help you and you will be advised of all the things you can claim for.
good luck
T.A wise man changes his mind, a fool never will.
El sabio muda el consejo, el necio no.0
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