Universal credit tax credits & buy to let home.

leveller2911

tomtom256 wrote: »

Well it would be easier to get at the ISA then the equity in the current housing market.

I guess they play by the rules but personally speaking I don't agree with it.Someone can have no savings,make no attempt to save but get a 100% mortgage (going back 4 yrs admittedly) and through no endevour they could have £50k in equity through HPI and yet someone who works 15 hrs a day and manages to save £50k ,invest in ISA's (encouraged to by both previous governments) can't claim because of their savings.Some ISA's have a 90 day notice period and a house can sell within 3 months;).

Just my opinion but I think if thats the case then the house should be advertised for sale immediately or at least the Government should do is place a charge on the property. Savers always get the sh 1t end of the stick i'm afraid, such is life.

PS:I haven't got £50k in savings BTW..:D

skintandscared_2

leveller2911 wrote: »

I guess they play by the rules but personally speaking I don't agree with it.Someone can have no savings,make no attempt to save but get a 100% mortgage (going back 4 yrs admittedly) and through no endevour they could have £50k in equity through HPI and yet someone who works 15 hrs a day and manages to save £50k ,invest in ISA's (encouraged to by both previous governments) can't claim because of their savings.Some ISA's have a 90 day notice period and a house can sell within 3 months;).

Just my opinion but I think if thats the case then the house should be advertisedfor sale immediately. Savers always get the sh 1t end of the stick i'm afraid, such is life.

PS:I haven't got £50k in savings BTW..:D

I'm only disappointed I can "like" this post just once...

princessdon

leveller2911 wrote: »

I guess they play by the rules but personally speaking I don't agree with it.Someone can have no savings,make no attempt to save but get a 100% mortgage (going back 4 yrs admittedly) and through no endevour they could have £50k in equity through HPI and yet someone who works 15 hrs a day and manages to save £50k ,invest in ISA's (encouraged to by both previous governments) can't claim because of their savings.Some ISA's have a 90 day notice period and a house can sell within 3 months;).

Just my opinion but I think if thats the case then the house should be advertisedfor sale immediately. Savers always get the sh 1t end of the stick i'm afraid, such is life.

PS:I haven't got £50k in savings BTW..:D

As I said earlier - TC don't look at capital - they look at actual income (ie interest from savings). That is why the loophole is being closed.

I know someone who was made redundant 3 years ago with over 70K - Started their own business (claims to losing on paper) and not only do they still get TC on their wife's part time job, they DEDUCT their loss from their wifes salary. Eg earn say £14K Pa - Loss of 4K - so they only claim an income of £10K. Add their 70K in the bank to this .. yet get about £330 PW in tax credits.

That is why they are chaging under UC (Hence OP worrying) but for now I could have millions in a none interest account and claim!

It's got nothing to do with cash V home. It's income (ie interest or rental profit).

leveller2911

skintandscared wrote: »

I'm only disappointed I can "like" this post just once...

Made me chuckle...........:D

I just think we should all play by the same rules but Society isn't fair and just is it......

Icequeen99

Tobermory wrote: »

Do you have some background information as to who would qualify for transitional protection and who would not ?

The details known so far are that those who are 'managed migrated' to UC from tax credits will get transitional protection. Those who move because of a change of circumstances will not. As yet the list of changes that trigger a move are not known.

IQ

princessdon

Icequeen99 wrote: »

The details known so far are that those who are 'managed migrated' to UC from tax credits will get transitional protection. Those who move because of a change of circumstances will not. As yet the list of changes that trigger a move are not known.

IQ

That is the thing isn't it. A family that say "earn a few pounds more or less or who have a new child, or whose childcare changes (say child going to school) *may* trigger this. Others can stroll on till affected.

I have always been open and honest - The use of capital is a long time coming and should have been in from the start!

If they have any sense = the new rules will ask about capital and auto trigger a review!

Notmyrealname

makavelianz wrote: »

basically my mortgage payment on that house is 350 a month and i recieve 450 a month. i was hoping to stay with parents another few years before i move out. looks like a drastic change.

Oh My God.

YOU CAN ONLY CLAIM THE MORTGAGE INTEREST AS AN EXPENSE, NOT THE WHOLE PAYMENT ON A REPAYMENT MORTGAGE.

I have a £60k interest only mortgage on a property I let out. The interest is £233 a month.

You may receive £450 a month and pay out £350 a month but unless all of that £350 a month mortgage payment is interest, in law you make more than £100 a month.


Going on the interest I pay on my £60k mortgage, you are probably only paying around £190 in interest at the absolute most. Therefore your profit is actually:

£450 - £190 = £260

And not the £100 you think it is.

What have you been putting on your tax return as income from the property, £1200? If you have, you've been breaking the law and committing tax evasion. Also you've been committing benefit fraud if you told tax credits your income from property was only £1200 a year as well.

After taking off an average amount for the Landlord Gas Safety check (you do get one done don't you?) and Landlord insurance, your income for tax and benefits purposes for the property is more like £2600-£2800 a year, not the £1000-£1200 you think it is. The fact you pay out £4200 a year in actual mortgage payments is irrelevant as you can only claim the interest portion as an expense - the capital portion is classed as profit.

MissMoneypenny

leveller2911 wrote: »

Its an interesting question you pose.

Hopefully someone will clarify if it would be the case that having £50k equity in a rented out property means they can claim benefits but someone who has saved £50k in ISA,s etc can't claim?.

The anomaly of the welfare payments Tax Credits not being means tested, is being rectified under Universal Credits.

Tax Credits is an income based welfare payment and will be included with other income based welfare payments, to form the new Universal Credit.

zagfles

leveller2911 wrote: »

I guess they play by the rules but personally speaking I don't agree with it.Someone can have no savings,make no attempt to save but get a 100% mortgage (going back 4 yrs admittedly) and through no endevour they could have £50k in equity through HPI and yet someone who works 15 hrs a day and manages to save £50k ,invest in ISA's (encouraged to by both previous governments) can't claim because of their savings.Some ISA's have a 90 day notice period and a house can sell within 3 months;).

That would only apply if it was the house they lived in, it wouldn't apply to a rented out house, that would be treated the same as any other savings.

There's no real advantage to the house you live in going up in value, because you need it to live in so can't just sell it! If the govt took account of equity in the house you live in people would be forced to sell and they'd end up paying more in housing benefit/LHA over the long term. Plus a lot of people won't be able to find somewhere to rent because landlords don't tend to like renting to benefit claimants.