can i rent out inherited property and claim tax credits

redrosierosie

I am due to inherit a property, I'm a single parent and currently rent. At the moment I do not want to move as I am self employed and will lose my job and I don't want my child to move school and our whole life is in the area that I live in now. Can I rent out the inherited property to pay my rent and still claim working/child tax credit or will they take the total value of the property as savings so I won't be entitled to any benefits. Many thanks for your help

missbiggles1

Tax credits are assessed on income, not capital.

redrosierosie

I didn't know that thank you

redrosierosie

Unfortunately it would seem universal credit which I haven't been transferred to as yet takes into account capital, so if I have over 16.000 in capital then I can't claim anything. Best to look at what may happen in the next few years!

Darksparkle

You'll have the declare your profit from your rental income.

teddysmum

Darksparkle wrote: »

You'll have the declare your profit from your rental income.

...and have the responsibilities of a landlord, for a property which is not nearby (assumed as the OP says she doesn't want to move area), so may be difficult to personally manage.

System

Can you transfer ownership of the property to a self-invested pension?

xylophone

Had you thought of selling the property and buying one in your area of choice?

Brighty

The rent you receive, minus any expenses (the rent you pay is not an allowable expense) , will be included in your income for tax credit purposes, so depending how much that is and how much you earn from work, your tax credits could reduce or disappear. As already stated, once you move to UC, you would cease to be eligible because of the equity in the house

Brighty

redrosierosie

sadly the properties in the area I live in are very expensive, I have cheap rent as I've lived here for a long time and it hasn't kept up with market value.

redrosierosie

Thanks for the replies guys, its helping me sort out in my head the various options. It's not a problem declaring the profit as income and I had already calculated for this and I would still get tax credits according to their calculator. The property is close enough for me to manage but the area is very different to where I currently live.