HMRC told me inheritance classed as other income???

Critchy

I'm after some advice about inheritance and working tax credit/child tax credit please!!!!

I know there's loads of threads about this but I'm still confused (doesn't take much!)

I'm a single mum who works part time and I claim both WTC & CTC. My mum unfortunately passed away last year and I inherited £3000 from her bank account. She had a house which I have taken a mortgage out for so that I could buy my sister out. Thing is I put the £3000 down on the 'other income' part of my renewal (which they reduced to £2700) and now my WTC has been reduced drastically!! I'm panicking because the amount I received last year went towards my income for the mortgage and I'm now worrying I'm not going to be able to afford the mortgage

I did some research online and most said inheritance shouldn't be included and I put the money in an ISA so even the interest wouldn't be taxable? I rang tax credit helpline today to enquire and he told me that it is classed as other income but he'd remove it for next year so they'd increase again then?!

If that is the case, fair enough but if it's not then I could really do with the extra help!!

Any advice would be gratefully received!! TIA

WillowCat

No it's not "other income", the money you received is capital and did not need to be declared on your form. Any taxable income from it would need to be declared, but as you say you have put it in an ISA then there will be no taxable income. You need to get back in touch with them and explain you made a mistake on the form.

Critchy

Thank you so much! I have just rang them back and explained again and he said they would only include if it was on some kind of inheritance form? We've been through probate and never received any such form so he said they'd remove it and it will go to Head Office to be verified?!

Fingers crossed it gets removed!! Thanks again for the prompt reply ��

Darksparkle

They are probably referring to this:

"Income from trusts, settlements and estates
You can get the figure from form R185 that the trustees or administrators will have given you. Include the amount before any tax was taken off (add together the ‘net’ amounts and ‘tax paid’ or ‘tax credit’ amounts)."

https://www.gov.uk/government/publications/trusts-and-estates-certificate-of-deduction-of-income-tax-r185

Won't apply to you though but their guidance isn't clear on it for possibly new advisers.

mynameisjonas

Hi i rang up to declare £1500 in inheritance today after putting cheque in the bank. i am on universal credit as a single parent and on the phone i was told my next universal credit payment would probably be nil. he was very reluctant to help me understand and stated it comes under "other income" i asked when i would find out the reduction and he said 4th sept. i thought anything under £6000 wasn't a problem? soooo confused any help would be much appreciated

Dazed_and_confused

Did you declare this as income or were you notifying DWP of a change to your capital?