Unexpected Legacy Problem

xylophone

You could look into a 'deed of variation', where you effectively alter the will to disinherit yourself in favour of someone else.

http://www.dootsons.co.uk/wp-content/uploads/2015/01/Dootsons-Deeds-of-Variation-sr.pdf


"However, if a beneficiary is receiving means tested benefits, a Deed
of Variation cannot be used to redirect his entitlement from the deceased’s
estate to prevent benefits being disallowed because under these
circumstances it will be seen as a gift from the beneficiary."

Biggles

Laurensalive wrote: »

Seek legal advice.

I don't think he wants that. I think he wants illegal advice.

G_M

Unexpected Legacy Problem

I don't understand the problem. You have clearly been short of money - hence making multiple claims on the the tax-payer.

Now you have some money. You don't say how much, but 'some' money must be better than (almost) no money.

So it is a benefit to you, not a problem!

Inform the relevant government departments of your change in circumstances.

Freecall

mad_rich wrote: »

You will be no better off as a result of it, which is not very appealing.

If the OP is able to support themselves (even for a while) then does that not of itself make them better off?

Many people receive great satisfaction, contentment and a feeling of well-being from being able to do just that.

Sam_J12

I believe money invested within a pension fund will not be taken into account when your means tested benefits are calculated, so you could put the money into a pension fund for later and you will also receive a contribution from the government in the form of a small bit of tax relief. That could be an option. But I am not confident in what I am saying here, so you really should take some advice on this.

masonic

Sam_J12 wrote: »

I believe money invested within a pension fund will not be taken into account when your means tested benefits are calculated, so you could put the money into a pension fund for later and you will also receive a contribution from the government in the form of a small bit of tax relief. That could be an option. But I am not confident in what I am saying here, so you really should take some advice on this.

That shouldn't be a problem, but would only take care of £2,880 per year for someone who is unable to work.

mad_rich

Freecall wrote: »

If the OP is able to support themselves (even for a while) then does that not of itself make them better off?

Many people receive great satisfaction, contentment and a feeling of well-being from being able to do just that.

That's a very good point.

(Although I'm trying to remember the last person who said 'No money for me thanks, I've got satisfaction' )

missbiggles1

You're allowed £6k in capital without means tested benefits being affected, even up to £16k you only lose some money on a sliding scale so you'll definitely be better off.

Eco_Miser

Freecall wrote: »

If the OP is able to support themselves (even for a while) then does that not of itself make them better off?

No it doesn't. It merely means there is a little more money for the government to re-direct into something else. Not enough to reduce taxes.

Freecall wrote: »

Many people receive great satisfaction, contentment and a feeling of well-being from being able to do just that.

Yes, I chose not to claim the contribution-based benefit I was entitled to when I was made redundant, though the contentment etc. was more from the avoidance of hassle than being able to support myself per se.

The OP, on the other hand, is going to have the hassle of claiming again, and of proving that they spent their inheritance wisely and did not deprive themselves of assets.

Basically they're facing 100% tax on their inheritance, unless they can spend it in ways that are neither a deprivation of assets, nor a replacement for the benefits they are currently receiving - which, presumably, is why they're asking for advice..

Sam_J12

masonic wrote: »

That shouldn't be a problem, but would only take care of £2,880 per year for someone who is unable to work.

I don't think this is quite correct. £2880 per year is the maximum the OP can get tax relief on, but there is no limit to the amount that s/he can contribute to a stakeholder pension. If it means s/he retains more means tested benefit then it is worth considering.