Universal Credit & Capital

thecoffeehouse204

Have been in a panic the last few days after reading that under the new Universal Credit any capital will be taken into account unlike the Tax Credits we currently claim where it isn't.

Last year my husbands nana passed away and left to him part ownership of the land she had inherited a few years earlier, she was tenants in common 50% of with another unrelated person. So 25% to was to go in his name and 25% to his sister. Looking at the land registry documents we were sent the value stated in 2005 when his nana inherited that land was listed at under £100,000. As far as we have been made aware the land is virtually worthless as due to historic mining on the area the council have stated that no building is allowed on the land. There was mention at one point of a local farmer being interested in renting the land but only for a nominal amount as being local he knows the land is worthless. I think £50 a month was mentioned which when split isn't going to be any help.

Now i'm starting to think that being named on this land is going to be a huge millstone round our necks when UC comes in as they will take is as capital and we will end up not being entitled to anything and at the moment we rely very heavily on what we get in tax credits. I'm assuming due to deprevation of assets rules its too late to get the land transferred into trust for our little girl so i'm trying to work out what our options are as I can't see anyone wanting to buy a 25% share of a worthless piece of land. We currently receive £297 a month TC/WTC.

As much as it pains me our best option is probably going to be selling our house and downsizing as due to getting on the property ladder early in life I made quite a profit on my 1st property so our current home has a bit of equity in and our current mortgage is just a bit more than our TC income so that would be problem solved right there. But i haven't really looked if there is anything available for that price that is family friendly.

Just wondering before we start investigating the selling route if anyone knows where HMRC would get their valuation figure from for the land to work out our capital? And if it will be looked at any differently because my OH being a tenant in common we can't just sell up and get the money out of it to support ourselves. Obviously if he was the sole owner that's what we'd be doing straight away.

My mum suggested just not telling them about the land as she can't see how they would find out about it anyway but I really don't want to commit benefit fraud just for the sake of £3.5k a year.

It's just so frustrating as the land was due to go into my MIL's name but she decided just to split it between OH and his sister as it would eventually come to them anyway - wish i'd known about this UC ruling then!!

Any advice would be welcome. TIA

princessdon

From what you say the value if planning won't be given for residential is low. Get 2 local estate agents to value the land.

thecoffeehouse204

Just hoping someone can offer some more advice with regards to this.

Since my last post we have obtained a valuation the land and my husbands share of the land works out around £6,500. We have had many discussions with the 50% owner who refuses to buy us out, will not let us sell our share on to another party and won't even entertain the idea of selling the whole plot (despite interest from someone). She is working on the belief that if the land is removed from the green belt and building was to be allowed the land could be worth £1.5 million. Now that would be great if we had any idea of timescales but it has been mentioned that this might not even happen in our lifetime. Meanwhile we will have to suffer the millstone of having our UC reduced because of a stupid plot of land that isn't generating us any income!!!

Has any information been released as to how the reduction in UC will be calculated on capital between £6k and £16k?

We're hoping that we won't be moved onto the new payments for sometime yet and maybe our little girl will have started school in which case this won't be a problem but just in case it comes in sooner we're trying to do some forward planning. We've already had to make the hard decision not to have another child as under the new rules we just couldn't afford it (so at the minute it sickens me to see others on benefits who just keep popping out children with no thought of how they're going to pay for them - but that's another story!)

TIA to anyone who can point me in the right direction.

paddedjohn

Is there a clause somewhere that says you can't sell your interest in the property without this persons permission?

thecoffeehouse204

Unfortunately yes, unless ordered by a court and after speaking to a solicitor he said the cost involved in forcing a sale through the courts would cost more than the lands value so it's a none starter. Wish we'd realised what we were signing up to but of course at the time capital / savings had no effect on tax credits so we just thought we were sitting on a nice nest egg for future generations.

Mojisola

thecoffeehouse204 wrote: »

Unfortunately yes, unless ordered by a court and after speaking to a solicitor he said the cost involved in forcing a sale through the courts would cost more than the lands value so it's a none starter. Wish we'd realised what we were signing up to but of course at the time capital / savings had no effect on tax credits so we just thought we were sitting on a nice nest egg for future generations.

I think that may be a good thing for you. If you own something but can't sell it for reasons beyond your control, there's a chance that its value will be disregarded.

princessdon

You can easily argue market value is lower than £6,500 after fees, legal let alone the share issue.

I can't see what you are worrying about as you will be under the £6,000 without any shared ownership to lower yet again.

rogerblack

To answer the above question on rates of withdrawl - which hasn't been yet - £1 for every 250 pounds over £6000.