Universal Credit and property on rent

atlantis187

Say for example if some was living with parents in their house but had their own property which was being let out.
How would this affect them under universal credits? They are currently receiving child tax credits for 2 children based on a household wage of just under £20k.

Thanks

princessdon

Depends on equity and declared income.

atlantis187

Property is probably worth around £150k and the rental income is £650 a month with £95k remaining on mortgage

Ravenshade

There are some parts of the benefits that it shouldn't affect, like JSA or ESA (but it may, it will need to be declared under 'other adults') however it is likely to affect Housing Benefit. It is also considered household income.

atlantis187

I'm specifically asking about child tax credits under the new universal credits systems. Will it affect this benefit and if so by how much?

sammyjammy

Its likely the equity in the property will be considered as capital, the income from the rent I don't know. Nobody can tell you how much it will or won't affect you. It's a long way off anyway (longer than anybody thinks!), do you intend to stay with your parents and rent it indefinitely?

princessdon

Both the equity and profit from rental (less interest part of mortgage and allowable expenses). The equity will be too high for universal credits.

Are you declaring your rental profit now to tax credits as that would be the same, only equity would affect universal credit.

BigAunty

atlantis187 wrote: »

I'm specifically asking about child tax credits under the new universal credits systems. Will it affect this benefit and if so by how much?

Child tax credits are scrapped under UC which rolls up a number of disparate benefit payments into a single payment, therefore your question makes no sense - they won't exist in their own right.

UC does bring in consistency to capital rules for means tested benefits which means it will operate more like Income Support or Housing Benefit does now and that landlords will be affected in the way that they were not previously.

AFAIK, capital in a property that a person owns but does not occupy will therefore be factored into UC calculations. The quirk in tax credits which mean low income/high capital households qualify for it will not exist under UC which is premised on it being awarded to low income/low capital households.

Hopefully another poster can give you a link to the proposal or policy documents for UC and you can identify the capital rules in it.

atlantis187

Yes we do intent to live with parents for the foreseeable future.
Even though there it equity in the house it's not the same as having hard cold cash in the bank is it.
This feels totally unfair new system

BigAunty

atlantis187 wrote: »

Yes we do intent to live with parents for the foreseeable future.
Even though there it equity in the house it's not the same as having hard cold cash in the bank is it.
This feels totally unfair new system

Whereas other people find it incredible that the the public purse is subsidising landlords.

scootw1

atlantis187 wrote: »

Say for example if some was living with parents in their house but had their own property which was being let out.
How would this affect them under universal credits? They are currently receiving child tax credits for 2 children based on a household wage of just under £20k.

Thanks

Is that 20k with or without the rent as without would make income 27800