Sorry to ask.. Ltd and Hb

mummytofour

Please don't have a go at me..
I'm a full time carer and there is no way I can work at the moment due to the demands of the children.

I moved from my mortgaged house due to abuse from the neighbours, towards my children and the house is on the market. I now rent and have been getting HB while the house sells. I hope to have some money from the sale soon.
I really want to do something to provide for my and the kids future with the money, not just waste it.

If things go to plan I may get about 50k. There is a property which has come on the market (studio) for 45k it's rented out at £390 per month, round here nothing comes up in the price bracket, even a studio would normally be 60k plus.
If I set up a limited company to purchase this property, I would then be employed as a director would I be able to claim HB based on my earnings? Or would it be seen as depriving myself of capital? So I could not get HB?
I'm also wanting to set up a small business offering another service which I'm in training for, so combined I would meet the working hours for tax credits and both business would work round my children's needs but together I would still be on a relatively low income to start with.

So my main question is, starting a limited compony to purchase property (spv) would I be able to claim HB?? I don't want to be on benefits long term, I want to provide for my childrens the best way I can.

Thank you

ab1982

Yeah I'm sure that would be fine.

[Deleted User]

Spending your own money instead of the states to live on and feed the kids is wasting it?

BigAunty

Hats off to your for your inventiveness for trying to find obscure ways to increase your current benefit entitlements.

Please confirm your current benefits to help forum members review your options. Off the top of my head, as well as child maintenance, feel free to correct me, but I believe it is

Housing Benefit
Council Tax Benefit
SMI on a previous property
Child Tax Credits
Child Benefit
Income Support
DLA/PIP
Carers Allowance


To date, your proposed methods to increase your income and minimise the impact on your benefits from the capital in your property, includes:-

1. Hoping to claim working tax credits based on caring for your children, for which you already receive child tax credits, DLA/PIP, income support, carers allowance for this role

2. Hoping to retain the Direct Payments that should be paid to a person supporting the children and gain WTC for the role by registering yourself as a care provider.

3. Now you hope to ring-fence potential future 50k capital by investing it in a buy to let property. To clarify, you wonder if its purchase via a Ltd company suddenly means that you aren't the owner (for the purposes of means tested benefits) but are the owner (for the income/capital, from an investment perspective)?

I expect you would like to know whether you could quality for WTC from the time you spend on the admin/maintenance of the property, the time you spend on it as a landlord, too?

Have you ever considered re-training as a welfare rights advisor?

tomtontom

Excellent idea mummy. How about employing the pet dog as a cleaner, to minimise that income some more? The budgie as a handyman?

But seriously, how about you do what the rest of us do and live off your own money for once? Even with that £50K you'll still bring in more in benefits than most families earn.

Poppie68

mummytofour wrote: »

Please don't have a go at me..
I'm a full time carer and there is no way I can work at the moment due to the demands of the children.

I moved from my mortgaged house due to abuse from the neighbours, towards my children and the house is on the market. I now rent and have been getting HB while the house sells. I hope to have some money from the sale soon.
I really want to do something to provide for my and the kids future with the money, not just waste it.

If things go to plan I may get about 50k. There is a property which has come on the market (studio) for 45k it's rented out at £390 per month, round here nothing comes up in the price bracket, even a studio would normally be 60k plus.
If I set up a limited company to purchase this property, I would then be employed as a director would I be able to claim HB based on my earnings? Or would it be seen as depriving myself of capital? So I could not get HB?
I'm also wanting to set up a small business offering another service which I'm in training for, so combined I would meet the working hours for tax credits and both business would work round my children's needs but together I would still be on a relatively low income to start with.

So my main question is, starting a limited compony to purchase property (spv) would I be able to claim HB?? I don't want to be on benefits long term, I want to provide for my childrens the best way I can.

Thank you

Well whatever else we can say about her she is consistently inventive!!!:rotfl:

Guest101

Poppie68 wrote: »

Well whatever else we can say about her she is consistently inventive!!!:rotfl:

Indeed, going through the OP started threads shows a consistent level of creativity

fed_up_and_stressed

tomtontom wrote: »

Excellent idea mummy. How about employing the pet dog as a cleaner, to minimise that income some more? The budgie as a handyman?

But seriously, how about you do what the rest of us do and live off your own money for once? Even with that £50K you'll still bring in more in benefits than most families earn.

Don't forget employing herself to look after her own children !

BigAunty

mummytofour wrote: »

If I set up a limited company to purchase this property, I would then be employed as a director would I be able to claim HB based on my earnings? Or would it be seen as depriving myself of capital? So I could not get HB?

AFAIK, income (the rental income minus legitimate tax deductible expenses like agency fees, repairs, cost of gas safety certificate, wear and tear allowance) will be taken into account for all means tested benefits like HB, council tax benefit, income support, child tax credits. This would reduce them.

AFAIK, the full capital will still be taken into account as you cannot shrug off its impact by purchasing it through a Ltd company. This would wipe out everything you are entitled to apart from PIP/DLA, Carers Allowance. At the moment, it wouldn't impact tax credits but in the move to Universal Credit, tax credits get scrapped and there is new means testing so you would get no entitlement to UC if your capital is over 16k.

However, I'm sure Housing Benefit Officer can confirm if this is the case.

I don't think that operating the buy to let through a Ltd company is necessarily automatically considered 'deprivation of capital' as that is about intentionally depriving yourself of capital to maximise benefit entitlement. However, deprivation of capital is a complex area so do seek expert advice.

I assume that you would be the Company Director therefore its not about gifting the property to someone else (unless you are intending for a friend or relative to be the Company Director? Please confirm if this is the case).

I also assume that when it comes to claiming HB, and the form asks 'do you own a property' you would tick the 'Yes' box as you would be owning it through a Ltd company as a company asset so would want to admit its ownership to avoid committing benefit fraud.

I think the best way of continuing to maximise your current benefit entitlements, which other posters have estimated are around 50k net per year, or equivalent to a taxable income of around 77k, is to put the cash you receive from the sale of your former family home into a pension.

Or to look into spending it on a series of home improvements, car, training courses, holiday and other normal household expenses like food, rent, council tax until it falls naturally below the threshold.

A pension, or spending capital on normal living costs, is about the only legitimate way I can think of to get rid of your future 50k capital but do seek expert advice on this.

The problem with parking the 50k in a pension is that when you receive the pension in, say 30 or 40 years time, is that you will lose pretty much pound for pound any housing benefit and council tax reduction you may be due then. Meaning that you won't actually get that investment back directly if you are still dependent on state support when your children become adults. But do seek proper pensions advice from a financial advisor as perhaps you could get a lump sum back from it when the pension matures.

BigAunty

Apart from a pension, or the OP having to pay her own rent, council tax, groceries and household bills directly for a period of time, can any other posters think of a helpful way that the OP can legitimately get rid of a future capital windfall so that she can continue to receive her benefits uninterrupted and with no impact whatsoever?

I'm struggling to think of any options where the OP can increase her benefits or retain them if she gets a windfall of 50k. Perhaps there is something I have overlooked?

I think we should all pitch in with ideas. It somehow feels that whenever the OP is proactive and comes up with an idea to increase her income, we are naysayers who say that her scheme won't work because benefit rules won't permit it. It would be nice if we could be proactive for once and help her with her mission.

NYM

Buying a 'Studio' through a Limited company suggests to me that it is business premises she's thinking of, rather than a BTL property?

I know that I don't always read things properly on here so apologies in advance...:o