housing benefit question (long and confusing sorry)

reallylost

Hi there
This is very complicated sorry.
I dont know if anyone can help....
I went on our council website today and they say that we would be entitled to CTB and HB...great I think...
We had sold our house and the new property fell through so we are renting a house from a work colleague on a five year fixed agreement
but the problem is the rent is not paid in a normal way...
The agreement we came to was the workmate wanted a 2 storey extension on his house and said if we paid for it to be built and finished (costing approx £50,000) then there would be no rent to pay. Having made that much on the sale of our home we agreed.
So the question is can we claim HB/CTB?
The forms ask how much rent is paid and how often.
We thought that if we divided the £50,000 over the 5 years that would work out at the monthly amount.
Would this be allowed?
Also as the landlord has received no actual money would he have to pay tax on the money we have paid out for the extension as it is payment in work for rent?
I am very confused and hope someone can help.
hope to hear from someone and thanks for reading this far

clb776

the only way u could do it was to get your friend to write out a tenancy agreement saying an amount that you pay and then you claim it. As you ahd the £50000 to pay for this, and you don't need to pay rent, why would you want to claim it anyway?

you need a tenancy agreement to claim HB.

PasturesNew

You have £50k squirrelled in the bank. LHA is means tested... so you'd not get help as you can use the £50k to pay your rent.

dmg24

I agree with PasturesNew.

It is not clear from your post whether you have actually paid the £50,000 and intend to pretend to pay the relevant amount of rent each month, or whether you still have the £50,000 and intend to pay the relevant amount each month.

In scenario (1), you own the property. You cannot claim LHA for a property you own, or have an interest in (with the exception being shared ownership, which this is not).

In scenario (2), you have too much capital to claim. Also, if the property will eventually be yours, you are not paying rent, but in effect a private mortgage.

PasturesNew

dmg24 wrote: »

It is not clear from your post whether

I read it as meaning:
- they sold a house, banked £50k
- they moved into a friend's house, which the friend has "rented" to them. The friend lives elsewhere
- in negotiating rent, the friend said "rather than putting money in my sweaty hand each month, I'm building an extension on my own home so why don't you settle the bills for that when they come in"

So, it sounds like the friend/landlord is trying to hide something, from somebody there ... and OP wasn't aware that having £50k sloshing about the place would matter.

It's one big contrivance ... avoidance ... and sleight of hands going on.

flexrider

why the ell would you want to rent when i know for a fact for 50k you can buy a flat or something, (scource from round my own way they are selling 2 bedroom flats on the river near me for 50k)

just wondering,

dmg24

PasturesNew wrote: »

I read it as meaning:
- they sold a house, banked £50k
- they moved into a friend's house, which the friend has "rented" to them. The friend lives elsewhere
- in negotiating rent, the friend said "rather than putting money in my sweaty hand each month, I'm building an extension on my own home so why don't you settle the bills for that when they come in"

So, it sounds like the friend/landlord is trying to hide something, from somebody there ... and OP wasn't aware that having £50k sloshing about the place would matter.

It's one big contrivance ... avoidance ... and sleight of hands going on.

Yep, that makes more sense ... and I agree!

dmg24

flexrider wrote: »

why the ell would you want to rent when i know for a fact for 50k you can buy a flat or something, (scource from round my own way they are selling 2 bedroom flats on the river near me for 50k)

just wondering,

Perhaps the OP does not want to live where the £50,000 flats are? As they have children, I doubt that a riverside flat would be particularly suitable to their needs.

PasturesNew

flexrider wrote: »

why the ell would you want to rent when i know for a fact for 50k you can buy a flat or something, (scource from round my own way they are selling 2 bedroom flats on the river near me for 50k)

just wondering,

It's not many places where they'd be £50k. Where I am right now a mobile home costs £100k, the cheapest house for sale is at £120k.

To have made £50k by selling a house would tend to indicate that the house bought/sold probably cost closer to £200-250k.

Macro_3

There are so many problems with this one, where do you start :eek:

Quite apart from the fact that you won't get LHA, OP, are you really willing to risk that much money without any legal advice? What happens if the landlord wants you to leave before the 5 years are up? A lot can change in 5 years! What if he dies, or stops paying the mortgage, or wants to sell, or goes bankrupt? What if something happens to you and you need to move?


Ooops, just realised that you have already committed. Oh dear. I hope the landlord has permission to let the property/is declaring the income etc.

reallylost

Hi there
thanks for the replies.
I was not actually trying to pull a fast one or anything honest.:(
I may not have explained properly but I really didnt want to do anything immoral or fraudulent.
We made £26,000 on the sale of our house (sold it for £89,000 not £200-250k) and that paid for the shell of the extension and the inside would be done by us as wages come in.
we have 4 kids so a 2 bed flat would be a struggle.
There are no savings in the bank and the wage coming in is £1100 a month.
sorry if I have raised any hackles it was not my intention I was not actually wanting to claim the rent part, just the CTB but it is all part of the claim form and was struggling how to put the right thing in the right box
sorry again and thanks