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Child Tax Credits and Inheritance

Hi there,

My mum died in December 2016 and when her estate was divided up equally between me and my siblings, we each received approx £10,000. This was a one off payment, not an *income* as such. I'm now renewing my tax credits and really confused as to whether I have to declare it as such. On the renewal form it states:

Trusts, settlements or estates

You will receive an R185 form with all the necessary information from the trustees or administrators.


I only received a cheque, no form, from the solicitors who dealt with everything when she died and I'm really confused! If it's helpful, the money has gone, I paid off my credit cards and bought a new (secondhand) car.


Can anyone help?


Thanks in advance!

Comments

  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
    It's isn't income for tax credits as it isn't taxable income for income tax purposes.
  • xylophone
    xylophone Posts: 45,426 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    https://www.gov.uk/government/publications/trusts-and-estates-certificate-of-deduction-of-income-tax-r185

    Re R185 - as you received a lump sum bequest from the will rather than taxable income from a will trust etc, the form is not relevant to your case.

    But do you need to declare the bequest just for information purposes?
  • Thanks for your responses.

    I really don't know Xylophone, not sure what to do...
  • sheramber
    sheramber Posts: 20,993 Forumite
    Tenth Anniversary 10,000 Posts I've been Money Tipped! Name Dropper
    You inherited a lump sum.

    You didn't receive an income from an estate so it is not included as income for tax credits.

    if you had received a sum that had been invested and you were paid the interest that had accrued that would be income that you needed to include and you would have received the form 185 showing the interest received
  • Just a wee update...

    Got through to HMRC after a 20 min wait, who informed me that Sheramber you are correct, the capital doesn't have to be declared. the only thing that would be counted as income would be the interest, there wasn't any so nothing to declare!

    Thanks for all your responses.
  • cavyslave
    cavyslave Posts: 180 Forumite
    Seventh Anniversary 100 Posts
    I'm just about to inherit a considerable sum of money and I too receive child tax credits as well as widowed mother's allowance. Does the same thing apply? And what about council tax because at the moment I only pay £17 per month due to my tax credits?
  • xylophone
    xylophone Posts: 45,426 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I'm just about to inherit a considerable sum of money and I too receive child tax credits as well as widowed mother's allowance. Does the same thing apply? And what about council tax because at the moment I only pay £17 per month due to my tax credits?

    According to your previous post the allowance and tax credits are about to end?
    My husband died in 2007 when our son was 9 years old. Since then I have been receiving Widowed Parent's Allowance and Child Tax Credits, but he leaves full time education this year and I know the payments will stop. I'm nearly 56 years old, will I be transferred on to JSA as I'm not employed at the moment. Thank you.

    Presumably you will need some sort of reassessment of your circumstances very shortly?
  • cavyslave
    cavyslave Posts: 180 Forumite
    Seventh Anniversary 100 Posts
    edited 13 May 2017 am31 6:32AM
    xylophone wrote: »
    According to your previous post the allowance and tax credits are about to end?



    Presumably you will need some sort of reassessment of your circumstances very shortly?

    Thanks Xylophone, yes that's correct but I will shortly be receiving a tax credits application form for NEXT year in which I will have to declare any earnings from THIS tax year. That's why I was asking.

    There is a sum of £800 in the account at the moment. I haven't touched it in any way, but would that count for instance for tax credit purposes?
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
    cavyslave wrote: »
    Thanks Xylophone, yes that's correct but I will shortly be receiving a tax credits application form for NEXT year in which I will have to declare any earnings from THIS tax year. That's why I was asking.

    There is a sum of £800 in the account at the moment. I haven't touched it in any way, but would that count for instance for tax credit purposes?

    The annual review form is for this year's claim, not next year's. It will ask for your actual income for last year and an estimate for this year if changes are expected.

    As said earlier in the post, inheritance isn't income for tax credit purposes. If the inheritance gains any interest then the interest is taxable income (unless in an ISA).
  • cavyslave
    cavyslave Posts: 180 Forumite
    Seventh Anniversary 100 Posts
    Sorry, I meant April - April
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