Any benefits for if there is a part share in a holiday home

GrumpyGrandPa_2

About three years ago I bought a holiday home in France to rent out. The house was put into the names of my two daughters for IHT purposes. One of my daughters is separating from her partner. Her current family home is in joint names and it is possible that she may be entitled to some equity in it but probably not enough to buy a house. She has three children (5, 7 & 10) and is training to become a teaching assistant. The earliest she is likely to be employed is May 2011 and part time at that.
My question:
Is she eligible for any benefits in view of the fact that she will have a pre tax rental income of about £2500 pa from the holiday home and possible equity of £100k that may take some months to materialise?

Oldernotwiser

GrumpyGrandPa wrote: »

My question:
Is she eligible for any benefits in view of the fact that she will have a pre tax rental income of about £2500 pa from the holiday home and possible equity of £100k that may take some months to materialise?

One would certainly hope not!

Vader123

GrumpyGrandPa wrote: »

Is she eligible for any benefits in view of the fact that she will have a pre tax rental income of about £2500 pa from the holiday home and possible equity of £100k that may take some months to materialise?

£100k of equity removes her from means tested benefits.

So.

No.

Vader

McKneff

Things like this have a way of coming back and biting you in the bum, consider yourself bittin.

zagfles

She'll be entitled to child tax credit. She might be getting some now, but if her partner was the main earner, it could increase substantially.

There are no capital rules in tax credits, she'll need to declare the income from the holiday home and it may reduce what she gets a bit, but if her income remains below about £16k or so she'll get CTC at the full rate (about £7500pa with 3 kids). Any maintenance her ex pays, bizarrely, does not reduce tax credits.

GrumpyGrandPa_2

Thanks for your help. Her soon to be ex is the main (only) earner and works away from home Mon - Fri. It's only now that the last child has gone to school that she is able to seek work. £100k will not buy a house and no employment record for the last 7 years means no possibility of a mortgage in the present climate. I guess that she needs to use any equity in the present family home to rent a house.

dmg24

Which part of the country are you in? Has she looked at shared ownership?

Oldernotwiser

GrumpyGrandPa wrote: »

Thanks for your help. Her soon to be ex is the main (only) earner and works away from home Mon - Fri. It's only now that the last child has gone to school that she is able to seek work. £100k will not buy a house and no employment record for the last 7 years means no possibility of a mortgage in the present climate. I guess that she needs to use any equity in the present family home to rent a house.

I've just realised that I've been misreading the post and that the £100,000 is the likely equity from the sale of the marital home, not from the sale of the French property!

Surely if she has £100,000 and the money from the French property, this is likely to give her enough to buy somewhere?

zagfles

Oldernotwiser wrote: »

I've just realised that I've been misreading the post and that the £100,000 is the likely equity from the sale of the marital home, not from the sale of the French property!

Surely if she has £100,000 and the money from the French property, this is likely to give her enough to buy somewhere?

Alternatively, could she stay in her current house and buy her partner's equity out with her share of the French property? Obviously this all depends on the amount of equity in both and how they split things, but given he works away does he really want the house?

This could be a good deal for both - she'd have the current house and all the equity, and the big advantage that property which you live in does not count as capital for the purposes of benefits, so assuming no other savings she should be able to get income support or income based JSA, plus mortgage interest support, plus counil tax benefit, as well as tax credits. And he'd get an income producing asset rather than what normally happens, a equity share in a house he doesn't live in and produces no income.

skintbint_2

remember the property in France is an asset in her name and will be taken into account as such, as well as the income which would probably impact on the Income Support or income Based JSA, also you state she is training does she recieve funding, grants etc?

zaksmum

The marital home has not yet been sold so there would be no requirement to declare the POSSIBLE 100K equity to the authorities until/unless she actually receives it.

The £2500 pre tax rental amount would have to be declared but would not be too much to stop her claiming certain benefits.