inheritance and benefits

billywilly

SnooksNJ wrote: »

I was unaware David Cameron and his family are on benefits.

No but the Cameron family avoided having to pay a substantial amount of money to HMRC by using that method of tax avoidance which is on a par with legally distancing themselves from an inheritance in order to continue to claim benefits - all is fair in love, war and where HMRC, DWP and the LA is involved.

SandraScarlett

The benefits that people receive have been paid for through the taxes of others. I'm sure lots of us have a nice warm fuzzy feeling, knowing that we can continue to pay tax, whilst Miss X receives her benefits, plus an inheritance.


I absolutely agree with the poster who suggested that Andy starts posts, under new AEs, just to provoke an argument.


xx

billywilly

SandraScarlett wrote: »

The benefits that people receive have been paid for through the taxes of others. I'm sure lots of us have a nice warm fuzzy feeling, knowing that we can continue to pay tax, whilst Miss X receives her benefits, plus an inheritance.


I absolutely agree with the poster who suggested that Andy starts posts, under new AEs, just to provoke an argument.


xx

If the law allows that to happen then there is nothing wrong. It's all about how you do it that is the question.
People seem happy that people avoid paying taxes, yet mention benefits and all hell breaks lose!

GirlFromMars_2

Wow, apparently I agree with Billy/Andy. I think inheritance planning is something more people should think about properly. The rich take full advantage of it, so why shouldn't the rest of us?

Sure, a deed of variance is not the way to go, and what the "OPs friend's sister" wants to do is fraud; but talking to your loved ones and making sure their intentions are honoured with a well written will, that takes into account the beneficiary's real life situation is common sense.

Sure, some people may want to leave their relatives money to live off to take a break from benefits. But I suspect most people's intentions are different & when they write their will they believe they are giving their loved one's a chance at something they wouldn't otherwise receive.

billywilly

GirlFromMars wrote: »

Wow, apparently I agree with Billy/Andy. I think inheritance planning is something more people should think about properly. The rich take full advantage of it, so why shouldn't the rest of us?
.

Exactly

Planning at any stage of life is vital. Even if you can't 'lose' the inheritance, there are ways that you can use it to gain the advantage of it always being there AND be allowed to continue receiving full benefits - buy/part buy a home with it is one of them. The house you live in is exempt and as the equity is always there you get the best of both worlds. Even if you already own your own property, there is nothing stopping you selling and buying a more upmarket property to shield your capital/inheritance in.
The most efficient way I saw an inheritance being used was to part buy a new home (shared ownership) and claim HB on the rental portion as well as keeping the benefits you already were getting before the inheritance. Brilliant I thought, still having the capital as and when you need it.

poppasmurf_bewdley

hammergirl wrote: »

Hi this is my first post so I hope I am in the right place. Sorry if its too long.


A friend is the executor for her mother's estate. The beneficiaries are my friend and her sister. My friend works but her sister is on benefits - housing, income support (or whatever the equivalent is now called) and child benefit. The sister is married and her partner is classified as sick.


The estate includes a house which will mean the sister is above the capital limits when she inherits 50%. She does not want to come off benefits and so has been trying to find different ways to keep the money without affecting her benefits. My friend has made it clear she has a legal duty to deal with the estate in accordance with the will and that she won't do anything dodgy.


The latest proposal by the sister is to officially disinherit herself. My friend says this will require a statement witnessed by a solicitor. She obviously has to protect her position as she will inherit the full estate if her sister decides not to take her share. The sister has asked my friend to pay her share to her adult daughter ( my friend's niece). It is clear to all of us that this is an attempt to hide the inheritance and that the sister has made an arrangement with her daughter. The money will not be spent by the daughter.


My friend does not want to be implicated in any type of fraud. Her sister has four children and so she would not pay the money to just one in any case as she feels this would not be right. She feels her sister is trying to pass the problems onto her. If it were me I would just keep the full 100% and risk falling out with my sister as she is clearly trying to defraud the system.


My question is what if any are the legal implications for my friend?

The way I understand this, if someone declines an inheritance, they are not entitled to request it goes somewhere else.

They would have to accept the inheritance and then give it away, thereby opening themselves up to the deprivation of capital rules.

Mojisola

poppasmurf_bewdley wrote: »

The way I understand this, if someone declines an inheritance, they are not entitled to request it goes somewhere else.

They can if they do a deed of variation but, as has been said above, that would be seen as deprivation of capital.

poppasmurf_bewdley

Mojisola wrote: »

They can if they do a deed of variation but, as has been said above, that would be seen as deprivation of capital.

I wasn't talking about a Deed of Variation, but just a plain old "I don't want it" statement.

From what I can see, Deeds of Variation have a lot of rules and regulations, amongst them being (1) that all the beneficiaries of the will must agree to the DoV, and (2) there are only certain reasons why a DoV can be used - and aiding benefit fraud certainly isn't one of them.

NYM

The Government is reviewing the use of DOV. Expect changes in the Budget.

Mojisola

poppasmurf_bewdley wrote: »

I wasn't talking about a Deed of Variation, but just a plain old "I don't want it" statement.

From what I can see, Deeds of Variation have a lot of rules and regulations, amongst them being (1) that all the beneficiaries of the will must agree to the DoV, and (2) there are only certain reasons why a DoV can be used - and aiding benefit fraud certainly isn't one of them.

No, only the beneficiaries affected by the change have to agree and they don't have to give a reason.

A DOV could be done even if the intention was to keep claiming benefits - it's just that the claimant would be in trouble when this was discovered by the DWP.