tax credits/flat rental/benefits??

onthecase

Hi My son is about to have his first child in October. His relationship with his girlfriend hasn't been easy, she wanted nothing to do with him at first, but things are better.

The problem I have is that my son has his own mortgaged flat, which he can't sell yet as he's in considerable negative equity, but his girlfriend has a rented house paid for on benefits. She refuses to move in with him as she says the flat is too small and not suitable (4th floor).

He is thinking of renting out his flat and taking on the rent on his girlfriends property.

Does anyone know please if he would still be eligible to claim working tax credits once they are together or would the fact that he rents out his flat be classed as income, even though it would only just pay the morgage on it?

I am also worried that if he takes on the rent on his girfriends house, but can't let the flat, he'll be looking at paying for two properties, which he obviously could not afford to do.

Any help very gratefully received!

karenx

Depends on their joint income for working tax credits, limit is just under 18k. They might not be eligable for the rent on the other house as along with their income the rental income will be taken into account also. So may make them over the limit

onthecase

Thanks. He's over the limit for working tax credits. Could he claim child tax credits as he would be the sole provider? And again, I assume the rental of the flat would count as income?

karenx

Yes it would be a joint claim for child tax credits and depends on his income as to how much they will get.
Unsure but I think it would be taken into account also