Would savings effect WTC & CTC

TheHamill3

I have to sell my mum and dads house as they have both passed on, long story short me and my brother and sister will be looking at 20k each.

I currently recieve with my partner Working tax credits and child tax credits as i only earn about 9k per year and she earns 8k per year.

How would recieving this kind of money effect out entitlement, as i really dont want to have to use that money to live off, i would rather either:
A.) Give all the money to my 2 year old son for when hes older.

B.) put the money into seperate ISA's.

C.) Save the money for a future mortgage deposit for a new house for my family.

Obviously i would like to save the money in ISA's for a future house, but would i have to declare the savings when re-applying for WTC & CTC? If so, any idea how much of this entitlement i would lose? and is there anyway to go about avoiding this.

Option 4 would be to let my brother keep my share until called upon....

Any advice would be great.
Thanks,
Mike

Aarons_mummy

It used to be that WTC was effected by savings but only by any interest earned on it however I'm not sure if this has since been changed. )PDF file at the bottom is very recent and doesn't seem to have changed any).

Calling up the tax crdits helpline may give you an answer but as most seem to have experienced you receive different information from different people so just for your own records I would advise you to keep a log of dates/times and employee numbers of staff you speak to just incase there is any problem at any point (not saying there will be but you just never know).

I know for means tested benefits anything accessible over £2000 (I think is the figure it may be higher though) has to be declared even in a childs name, especially as it will be passed to you and not directly to your son, however again whether this effects your entitlement is another question.

What about capital?

We will not normally take capital (that is, deposits in current and savings
accounts at banks and building societies, most lump sum payments and the
value of property, shares and other investments) into account when we work
out your entitlement to tax credits.
However, in some cases where the income tax rules treat capital as income

The Tax Credit Helpline
will be able to give you
more information about
what types of income
count for
tax credit purposes.
Page 23

and tax it as such, you will be expected to include the taxable amount as
income in your tax credit claim. This can happen if, for example, you hold
shares in a UK company and the company gives you a stock dividend (new
shares) instead of a cash dividend. This is part of what we call 'notional
income'.

From the tax credit PDF file, if you google working tax credit and savings it's around the 4th link down, the booklet that tells you about CTC/WTC how it's calculated etc.

Oldernotwiser

Savings don't affect tax credits (apart from the interest) but, if they did, giving away the money would be considered as deprivation of capital and you would be assessed as if you still had it.