We own my partners mothers house, benefits?

sparrer

You have stable jobs, several properties between you, have been able to pay lump sums ad hoc off one of the mortgages, yet you say you have considered 'telling her mum she needs to move out and find accommodation elsewhere on benefits, and then we went it out to someone else privately.' and 'Preferably we would prefer her to stay there'.

How benevolent. Your gf chose to let her mum continue living in the property when things weren't so tight. Now you say because you can't do what you want the mum might have to find somewhere else. She's going to love that, and you...

Life isn't about pushing people, particularly family, to one side while grabbing as much as you can, it's about finding an even balance. Just my humble opinion but if it were my mum I'd sell one of the other properties to make sure she had a secure roof over her head. As you have good incomes the gf can always buy another property when your 'crisis' is over.

maria6259

tombliboo wrote: »

We pay the mortgage and insurances on the house in which my partners mum lives... the mortgage is in my partners name because it was where she lived before we met and her mum lived with her.

Her mum is on benefits but we don't get anything toward the mortgage and money is getting tighter! My partner and I are not married, should we look at changing the mortgage to my name and could we get money back that way?

The only other alternative we can think of is telling her mum she needs to move out and find accomodation elsewhere on benefits, and then we went it out to someone else privately.

Preferably we would prefer her to stay there but struggling to afford the bills?

There could also be income tax implications for your partner as HMRC may deem that she is allowing her mum to pay subsidised (free) rent, in which case they may assess a fair rent and tax her (your partner) accordingly, even though she is not receiving actual rent.

Jowo_2

maria6259 wrote: »

There could also be income tax implications for your partner as HMRC may deem that she is allowing her mum to pay subsidised (free) rent, in which case they may assess a fair rent and tax her (your partner) accordingly, even though she is not receiving actual rent.

Please provide a Link to the HMRC website section that details tax payable on notional rather than actual rent, something I've never heard of before.

Jowo_2

LisaLou1982 wrote: »

Whether any money has ever changed hands in the past is here nor there.

If rent is not charged during periods of employment but is charged when the person is eligible for LHA then it will be deemed a 'contrived tenancy', not written off as neither 'here nor there' by the local authority as you suggest. The Shelter website provides this exact example as a situation which is likely to have a LHA claim rejected as contrived.

maria6259

Jowo wrote: »

Please provide a Link to the HMRC website section that details tax payable on notional rather than actual rent, something I've never heard of before.

I don't have a link. This info comes from when my father wanted to give me his house, and live rent free, but was told by a solicitor that I would still be deemed to be receiving a rent from him and that would incur tax implications.
If anyone knows any more about this I would be interested in finding out.
ps dad's house is still in his name!

Fire_Fox

LisaLou1982 wrote: »

I recently filled in the forms for my mums housing benefit claim and as far as i remember, there was no section which required to the tenant to state how much they had paid in rent in the past. The mother can prove that she lived in the property as she can get a tenancy agreement. Whether any money has ever changed hands in the past is here nor there.

The mother is not a tenant until she pays rent. The council will want to establish this is a commercial tenancy, there is nothing commercial about letting your mum live there rent free until such time as LHA is paid.

Annisele

maria6259 wrote: »

I don't have a link. This info comes from when my father wanted to give me his house, and live rent free, but was told by a solicitor that I would still be deemed to be receiving a rent from him and that would incur tax implications.
If anyone knows any more about this I would be interested in finding out.
ps dad's house is still in his name!

I suspect that the solicitor's advice had more to do with inheritance tax than with income tax.

If your father was 'gifting' his house to you - but still intending to live there rent free - then that would have been a 'gift with reservation'. If the point of the exercise was to reduce inheritance tax, then a gift with reservation probably wouldn't have achieved the result you wanted.

Jowo_2

maria6259 wrote: »

I don't have a link. This info comes from when my father wanted to give me his house, and live rent free, but was told by a solicitor that I would still be deemed to be receiving a rent from him and that would incur tax implications.
If anyone knows any more about this I would be interested in finding out.
ps dad's house is still in his name!

ok, I've heard of the concept of notional capital when it comes to the DWP dealing with benefit claimants who have deliberately squandered their savings or inheritance, for example, in order to improve their eligibility for means tested benefits. That includes parents who want to gift their properties to their children hoping to avoid selling them for care home fees but find that the local authority consider that they've still got the assets that they've given away.

i've just never heard of the HMRC taxing landlords on anything other than actual rental income so I think the other poster is probably correct when they see it as an inheritance or possibly CGT tax issue.

maria6259

Annisele wrote: »

I suspect that the solicitor's advice had more to do with inheritance tax than with income tax.

If your father was 'gifting' his house to you - but still intending to live there rent free - then that would have been a 'gift with reservation'. If the point of the exercise was to reduce inheritance tax, then a gift with reservation probably wouldn't have achieved the result you wanted.

I think it was to do with IHT. However, as my dad has just under £1/2M in total including assets, I thought there would be no liability for IHT anyway, as AFAIK he can also claim my deceased mother's allowance. If anyone knows better can they please correct me.
thanks

Sorry we've got off the original thread!

zzzLazyDaisy

LisaLou1982 wrote: »

I recently filled in the forms for my mums housing benefit claim and as far as i remember, there was no section which required to the tenant to state how much they had paid in rent in the past. The mother can prove that she lived in the property as she can get a tenancy agreement. Whether any money has ever changed hands in the past is here nor there.

I suspect that you are not your mum's landlord.

Where the landlord is a relative, the question of whether the person has paid rent in the past is very relevant indeed. If they have not paid rent, but are now agreeing to pay rent in order to claim LHA, that would normally be considered a contrived tenancy, in which case LHA is not payable.

The local authority look very closely at LHA applications when LL and tenant are related.