Due to inherit £5,000 how will this affect my benefits?

leenmeanJean93

Hi, advice needed please I've been unemployed for 7 months and will be due a inheritance from my mother's estate, its approximately £5000, as I'm now unemployed I just wanted advice regarding how this may affect my current situation please.
I find it all very confusing, is a inheritance lump sum classed as an asset or income???

Many Thanks 😊 

tacpot12

It is classed as capital (i.e. it is an asset), however unless you have other savings, it will not affect your benefits. It may help if you post details of what benefits you are received, and what the total of your savings will be after you receive this inheritance. 
If you have other savings but you also have debts that need paying, you may be able to use the money to pay of the debts without causing yourself problems with the DWP. If you have other savings and some debts, please post details of the debts you have (who they are with and what they are for)  so you have get advice on whether you can use the money to pay off these debts. 

Caz3121

It will depend on what benefits you receive and whether you have other savings already.
If you have no other savings and will have under £6k, there will be no impact on any benefits
If the £5k will take you over £6k in total then any means tested benefits (eg Universal Credit) would be reduced, non-means tested, such as New Style JSA would be unaffected

leenmeanJean93

tacpot12 said:

It is classed as capital (i.e. it is an asset), however unless you have other savings, it will not affect your benefits. It may help if you post details of what benefits you are received, and what the total of your savings will be after you receive this inheritance. 
If you have other savings but you also have debts that need paying, you may be able to use the money to pay of the debts without causing yourself problems with the DWP. If you have other savings and some debts, please post details of the debts you have (who they are with and what they are for)  so you have get advice on whether you can use the money to pay off these debts. 

Thanks, I've briefly spoken with HMRC and they've confirmed they consider any money from someone's estate as income and not capital/asset, basically they have said the first £300 is unaffected and the balance is likely to affect benefits etc
Is this correct? 

Robin9

I think its capital and the figure is £16,000

Marcon

Ask the experts: https://www.turn2us.org.uk

elsien

leenmeanJean93 said:

tacpot12 said:

It is classed as capital (i.e. it is an asset), however unless you have other savings, it will not affect your benefits. It may help if you post details of what benefits you are received, and what the total of your savings will be after you receive this inheritance. 
If you have other savings but you also have debts that need paying, you may be able to use the money to pay of the debts without causing yourself problems with the DWP. If you have other savings and some debts, please post details of the debts you have (who they are with and what they are for)  so you have get advice on whether you can use the money to pay off these debts. 

Thanks, I've briefly spoken with HMRC and they've confirmed they consider any money from someone's estate as income and not capital/asset, basically they have said the first £300 is unaffected and the balance is likely to affect benefits etc
Is this correct? 

It may be HMRC if you're looking at tax credits, otherwise it's the DWP you should be speaking to for clarification.
Either put more details up here so people can advise, or use the calculator in Marcon's link. 

tacpot12

leenmeanJean93 said:

tacpot12 said:

It is classed as capital (i.e. it is an asset), however unless you have other savings, it will not affect your benefits. It may help if you post details of what benefits you are received, and what the total of your savings will be after you receive this inheritance. 
If you have other savings but you also have debts that need paying, you may be able to use the money to pay of the debts without causing yourself problems with the DWP. If you have other savings and some debts, please post details of the debts you have (who they are with and what they are for)  so you have get advice on whether you can use the money to pay off these debts. 

Thanks, I've briefly spoken with HMRC and they've confirmed they consider any money from someone's estate as income and not capital/asset, basically they have said the first £300 is unaffected and the balance is likely to affect benefits etc
Is this correct? 

No, they are wrong - but this can happen if you don't ask the question in the right way:
This link confirms that the answer HMRC gave you is correct IF you are receiving tax credits and IF the money you are receiving from the estate is income that the estate has received (e.g. if it has been renting your mother's house out until it was sold).
https://www.gov.uk/guidance/tax-credits-working-out-income

You need to check with the executor whether your mother's estate received any income and if so how much of this income is being paid to you as part of the £5000. I expect that the amount of income will be less than £300, but the executor can give you a form R185 with the amount of income on it for you to show HMRC.  All the rest of the payment is capital.

Robin9

I think this is getting confused.

OP has a simple, straightforward lump of capital as an inheritance.  Income doesn't come into it - that the estate's (ie executors) affair 

xylophone

The OP's mother has died. The executor has collected in the assets.
The executor has distributed the estate funds.
The OP has received a bequest from the funds.
She surely now has a lump sum which forms her capital?