Can the director of a limited company with assets claim HB?

permaculture_dreamers

A bit of background, should anyone be interested: We are a couple with 2 small children, who live in rented accommodation and whose income is quite low. We have savings that we have spent many years building up, in order to fulfil a dream. We want to buy some land, in order to build it up into a business based on permaculture over time, and to enjoy working on it in the meantime. We don’t anticipate it making us any money for a long time – we just feel it would be a lovely way to bring up our small children, having them play a part in the building up of a project, which will eventually become profitable. We have chosen to spend our life savings on this, rather than a deposit for a house.
However, one of us has just been made redundant, and the future of the other’s job is by no means secure. Should the worst happen and we were both out of work, we would normally be entitled to housing and council tax benefit. Obviously, we would look for other work as soon as possible - but we need to know whether, should we need it for a while, we would be able to survive on benefits without having to sell our dream.

So, the question is, if we bought some land, would having it in the name of a business mean we avoid the problem of our assets being over the housing benefit threshold of £16,000?

Are directors of a limited company that has an asset (a 4 acre field) that is valued at over the threshold (at around £28000) eligible for housing and/or council tax benefit? The company would pay the 2 directors no income whatsoever and would make no money. Or would they be forced to sell the company or company asset (i.e. the field) in order to pay rent?


Some issues that might affect this are:

• would making the company dormant have any bearing?
• would there be a time limit to when the company had been set up, in relation to the claim (to deflect the accusation of intentionally avoiding the £16k threshold)?
• would being joint directors or not have a bearing?
• would it make a difference whether the land was originally bought in the company name, or transferred over to the company at a later date? Is it even possible to transfer assets in this way?

To reiterate, we would not want to be in a situation where we claim benefits over a long period of time – this question is simply so that if we are forced into a situation where we struggle to pay the rent due to redundancy, we could avoid having to give up a dream we have been working towards for years, just to pay the rent while we find other work.

dmg24

Now that you are aware of impending redundancies, any act which is intended to deprivate yourself as capital would mean that you would be treated as still having the capital, and therefore ineligible for means tested benefits.

terryw

Also I would imagine that the LA would consider the shares that were held in the limited company as an asset in the same way that shares in any company would be considered as an asset, and consequently HB/LHA would not be payable as the asset value was above the threshold. The HB/LHA application form clearly asks for details of all shares and investments held.

afc80

the director of a limited company can claim LHA/HB. The wages that the company pays the director is treated as earnings (presumably you pay yourself a wage).

The company is then valued by the LA and treated as capital. If the company is valued at over £16,000 you will not qualify for any help with your rent.