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

Tigsteroonie

zagfles wrote: »

There are no capital rules in tax credits

No rules yet.

Not sure if anybody spotted this in the government's white paper about Universal Credit, which will incorporate CTC & WTC:- (p67 final paragraph)

Universal Credit will have the same capital rules as currently apply to Income Support. There will be an upper capital limit above which there is no entitlement and a lower limit below which capital is fully disregarded.

Oldernotwiser

zaksmum wrote: »

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

However, the capital value of her share of the property will stop all means tested benefits completely, apart from tax credits.

zaksmum

Oldernotwiser wrote: »

However, the capital value of her share of the property will stop all means tested benefits completely, apart from tax credits.

So wouldn't that bar anyone who owned or part owned a house from claiming means tested benefits?

Tigsteroonie

zaksmum wrote: »

So wouldn't that bar anyone who owned or part owned a house from claiming means tested benefits?

When the house is sold, the equity is realised and she has the capital, it will affect her entitlement to means-tested benefits. If she intends to invest that capital into another property, I believe (but don't quote me) that she can ring-fence the money for up to six months without it affecting benefits, but after that time it will be considered capital.

skintbint_2

the house in France will be taken into account as it is not her main residence so the value of her 50% share will be used as an asset. the money from the sale of the house can be kept aside as long as its earmarked for buying another property and this has to be done within 26 wks

zaksmum

skintbint wrote: »

the house in France will be taken into account as it is not her main residence so the value of her 50% share will be used as an asset. the money from the sale of the house can be kept aside as long as its earmarked for buying another property and this has to be done within 26 wks

So it's counted as an asset even though it's not sold and may never be sold? Is it considered the same as if she already had the cash?

Oldernotwiser

zaksmum wrote: »

So wouldn't that bar anyone who owned or part owned a house from claiming means tested benefits?

If they own a second home or investment property then, of course it would.

zaksmum

But how could the owner of the second home live? The property could be on the market but not selling, they couldn't release the actual money from it to buy food and pay bills.

Can they not claim any means tested benefits at all just because of the ownership of the second property?

And what about a static caravan that's only used at weekends? Would that be classed as a second home and prevent the claiming of means tested benefits?

fluffymovie

A 2nd property is an asset which is to be taken into account for means tested benefits but there are exceptions.

If the 2nd home is occupied by a former partner who is now a lone parent
If the property is for sale (26 weeks or longer as reasonable)
If the property is occupied by a member of the claimants family who is over 60.

However, if someone has a 2nd property, even if not for sale, it will normally be taken into account. The value is obtained, 10% deducted for costs and then mortgage and other loans secured on the property are taken into account and if over £16,000, no entitlement to HB / CTB but not 100% on other benefits!

zagfles

Tigsteroonie wrote: »

No rules yet.

Not sure if anybody spotted this in the government's white paper about Universal Credit, which will incorporate CTC & WTC:- (p67 final paragraph)

Yes, but existing claimants won't be moved to the new system till sometime between 2014 and 2017 so it's a long way off.

And there is also this bit:

"The Government is committed to ensuring that no-one loses as a direct result of these reforms. If the amount of Universal Credit a person is entitled to is less than the amount they were getting under the old system, an additional amount will be paid to ensure that they will be no worse off in cash terms."

How this is done in practice will be interesting!