Sorry to ask.. Ltd and Hb

Poppie68

NYM wrote: »

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

I'm under the impression it's a studio flat and not a business premises.

Poppie68

BigAunty wrote: »

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.

Most people would want to be proactive in actually getting themselves off benefits this woman is consistently looking at ways to work around the benefit system to add even more benefits to her already sizeable payments.
The system really needs an overhaul because people like this don't want to earn their money when the system allows them to make a career of claiming money from the taxpayers.

antrobus

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? ...

You'd be seen as depriving yourself of capital.

Plus of course, it is very likely that the authrorities would regard the rental income as being yours anyway.

NYM

Poppie68 wrote: »

I'm under the impression it's a studio flat and not a business premises.

I did say I don't always read properly before I press 'send' :rotfl:

I think you're right now that I've read it again..:D

BigAunty

NYM wrote: »

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

Good point. I assumed, like yourself, it is a residential property but the OP can confirm.

My understanding is that some residential property landlords do purchase their properties through a limited company for tax purposes (rather than benefit claim motivations) but that this tends to be business people with a property portfolio, rather than a single property at the lowest end of the property market.

However, I'm not sure it would make any difference to her benefits whether it is a commercial or residential property but Housing Benefit Officer will know.

NYM

BigAunty wrote: »

Good point. I assumed, like yourself, it is a residential property but the OP can confirm.

However, I'm not sure it would make any difference to her benefits whether it is a commercial or residential property but Housing Benefit Officer will know.

No...I think you were right first time...;)

CheepCheep

What sort of income will you earn from this investment?

Even if you have no mortgage because the property is bought outright you will have costs, so depending on the level of income, this will affect your housing benefit, but how much rent will your studio generate? if it's only say £400 per month, minus costs (such as insurance, property maintenance, etc) your income may only be £200 per month, below any income thresholds for HB.

Also you could be a self-employed director, you do not necessarily have to be an employed director of the Ltd company, otherwise the company will have to register as PAYE and you'll have to potentially calculate and pay taxes, NI, etc which will add more costs, as opposed to completing a self assessment at the end of the year.

BigAunty said about ticking the yes box to owning a property, but you wouldn't have to as it is the ltd company that owns the property, and as the ltd company is a separate legal entity, the property is not yours.

Poppie68

CheepCheep wrote: »

What sort of income will you earn from this investment?

Even if you have no mortgage because the property is bought outright you will have costs, so depending on the level of income, this will affect your housing benefit, but how much rent will your studio generate? if it's only say £400 per month, minus costs (such as insurance, property maintenance, etc) your income may only be £200 per month, below any income thresholds for HB.

Also you could be a self-employed director, you do not necessarily have to be an employed director of the Ltd company, otherwise the company will have to register as PAYE and you'll have to potentially calculate and pay taxes, NI, etc which will add more costs, as opposed to completing a self assessment at the end of the year.

BigAunty said about ticking the yes box to owning a property, but you wouldn't have to as it is the ltd company that owns the property, and as the ltd company is a separate legal entity, the property is not yours.

That won't work for her, she wants to also use the directorship for claiming WTC, she wants to wring the taxpayers dry!

BigAunty

antrobus wrote: »

You'd be seen as depriving yourself of capital.

.

OK, well we all know that the deprivation of capital rules are a minefield and decision makers review each claim on a case by case basis.

However, the OP did not indicate that she was transferring the ownership of the property to another person (which may be classed as deprivation of capital if a decision maker was able to provide evidence that this was done intentionally to maximise benefit entitlement).

She indicated a preference to buy it through a Limited Company. This requires a Company Director to operate it.

The OP needs to confirm if she planned to be the Company Director, in which case the beneficial ownership of the property, I assume, can be traced back directly to her for tax and benefit purposes. The way I see this is that the Ltd company is simply a transparent window back to her, not a diversion. Sure the Ltd Company is an intermediary or proxy but I don't see how it divests the OP from ultimately having that capital.

However, OP needs expert advice and perhaps will get it from Housing Benefit Officer who deals with those who operate a Ltd company and then claim HB.

Or whether the OP planned for someone else to be the Company Director, in which case perhaps it is potentially straying into Deprivation of Capital territory as I can't see how this is any different from the OP receiving 50k in cash and then putting someone else's names on the land registry deeds when a property is purchased with that money.

She could perhaps ask her local council Housing Benefit office about her buy to let plans to see if there would be any negative impact on her HB (and by extension, all other means tested benefits like income support, tax credits, council tax, etc).

BigAunty

I thought of another option.

OP could buy a shared ownership property for owner occupation (but only if she passes the financial tests, such as whether the housing association or mortgage lender will take into account her benefit income as criteria).

That way she can park the 50k into her next family property while claiming HB for her portion of the rent.

Is this a workable solution or will a Housing Association only offer this type of shared ownership scheme to those in employment?