Help!

Sidboi21

My mother is a joint holder. I just dont know how it works when the house sells.

Does it go to my dads account or will it have to go to a joint account. My mother is also in social housing and she gets housing benefit because of her small earning. If she were to have some if the house sale money, anything over 16k she will then be liable for full rent. My mother doesnt want anything from the sale as when she left many years ago my father paid her a cash sum out of his redundancy. It was an agreement between us as a family not involving solicitors that when he should sell the house its all his. 

She not the kind of person to stab him in the back once the house sells and want more.

Sea_Shell

As far as I know, the sale will need a conveyancing solicitor, who will establish who is entitled to what, as per the deeds.   

If they decide to amend this (50:50?) split, this would have to be put in writing to the solicitor who would then make the relevant payments to the relevant account.

If the property is currently owned as Joint Tenants, they may first need to sever the Joint Tenancy and move it to Tenants in Common, which would then require ownership to be apportioned.

They both should seek professional legal advice before proceeding.

p00hsticks

Sidboi21 said:

My mother is a joint holder. I just dont know how it works when the house sells.

Does it go to my dads account or will it have to go to a joint account. My mother is also in social housing and she gets housing benefit because of her small earning. If she were to have some if the house sale money, anything over 16k she will then be liable for full rent. My mother doesnt want anything from the sale as when she left many years ago my father paid her a cash sum out of his redundancy. It was an agreement between us as a family not involving solicitors that when he should sell the house its all his. 

She not the kind of person to stab him in the back once the house sells and want more.

If your mother is joint owner, she can't simply turn down her share of the proceeds in order to continue claiming means tested benefits - it's classed as 'deprivation of assets' and cosidered benefit fraud. I think your mother and father need to seek legal advice, but it sounds as if neither are in a position at present to be able to give large sums of money away without facing possible hardship later on.

maman

p00hsticks said

If your mother is joint owner, she can't simply turn down her share of the proceeds in order to continue claiming means tested benefits - it's classed as 'deprivation of assets' and considered benefit fraud. I think your mother and father need to seek legal advice, but it sounds as if neither are in a position at present to be able to give large sums of money away without facing possible hardship later on.

I agree about seeing a solicitor  as it's difficult to know whether the informal financial agreement made at the time of separation would be recognised legally as a 'full and final' settlement. 


It's understandable that parents want to help their children whether that's buying them a conservatory or any other way. 


What isn't understandable to me is why someone who owns their own home would put themselves in a position where the taxpayer has to subsidise their social rent or claim benefits when they have potential assets of their own. I'm surprised this is even possible. I thought  social housing for the elderly was kept for those in dire straits like the homeless or those in a totally unsuitable private rent  or swapping a large family social rental for a smaller place. Don't you have to declare assets and income to qualify for social housing? It's not something I have experience of but I thought social housing was at a premium. 

Sidboi21

My mother doesnt want any of the house sale as she recieved a cash payment many years ago. So if she has to have half then yes by all means she will be liable for all rent payments which is absolutely fine.

I am obviously new to all this and have come to the forum for advice. The advice has been great and obviously when fraud is mentioned that is certainly not the case and I want to make sure everything is legal.

Lets say the house is sold and the proceedings are split 50k each either one of them cant for example buy a car for their children, purchase a family holiday any sort of gift for that matter over 3k?

So what can they spend their money on? 

Flugelhorn

Sidboi21 said:

My mother doesnt want any of the house sale as she recieved a cash payment many years ago. So if she has to have half then yes by all means she will be liable for all rent payments which is absolutely fine.

I am obviously new to all this and have come to the forum for advice. The advice has been great and obviously when fraud is mentioned that is certainly not the case and I want to make sure everything is legal.

Lets say the house is sold and the proceedings are split 50k each either one of them cant for example buy a car for their children, purchase a family holiday any sort of gift for that matter over 3k?

So what can they spend their money on? 

they can spend the money on whatever they want and give it away, however gifts in excess of 3k have to be declared on Inheritance tax forms and may be liable to tax then, however it does not sound as though your father;s estate would be liable for IHT as it stands.

The real concern would be if he gave it all away and then needed social care as it would be assumed that he still had all the cash himself

maman

I don't know how old your parents are but I'm assuming you're talking about social housing for elderly people.

If you Google 'deprivation of assets' it will explain lots of the possibile pitfalls.

Put briefly, if in the, relatively near, future either of them needed to go into care and said they did not have the funds to pay that's when problems arise.

The law is designed to stop people getting the taxpayer to fund a care home when they had the money for fees themselves but deliberately gave it away. By selling his home, when he doesn't need the money to live on and is planning to give it away, your father is making himself vulnerable to such scrutiny. 

It's hard to give specific examples of spending that's acceptable but generally large amounts of spending on other people rather than on themselves is how I'd explain it. So not cars for others but perhaps paying for a cleaner for himself. 

RAS

This is more properly a benefits forum query but when I was last there the doom-mongers and snipers were rife.

Based on older cases the following are OK

A reasonably price holiday is OK, but the single lady who paid for a friend to accompany her to Florida as a companion was told that was deprivation of assets. Might not have been if a companion was compulsory and her own costs were considered acceptable.
Replacement of old domestic appliances and furniture with good quality, not "designer" quality purchases that will last. 
Buying or replacing an old car with a more reliable and cost efficient version. 
Buying a house with an inheritance; easiest to do via the executor, or using the money from a sale to buy a replacement house.
Repairs and some improvements to said house; a new kitchen to replace one falling apart but not usually an extension.

Gifting £3K each to children would be deprivation as far as I know. Gifts at a similar level to those given in previous years for Christmas and birthdays etc are OK.

The important thing is that if they give away any money to which they might be entitled, they will be ruled as still having the money and not allowed any benefits if the combined sum takes them over £16K.

There is an interesting case on here recently where the wife went back to NI, got social housing and benefits. Then someone realised she still jointly owned a house in England with her husband whom she had not divorced in the previous 15 years. Because they'd never divorced, and despite the fact he'd paid the mortgage all those years, husband was faced with having to buy out her 50% or sell up.

A settlement less favourable to the wife looked problematic as the Housing Executive or whoever was demanding she repay 15 years rent that she'd received from the benefit system.

So your parents really do need proper advice.

Mojisola

Sidboi21 said:

I have managed to get him into social housing so thats where he will live for the forseable future.

He has mo other assets and only recieves a small monthly pension <400 along with the state pension. He has no savings either. 

He will be expected to use the money he receives from selling the house to pay his way.

He won't be able to give it away and then claim means tested benefits towards paying the rent, etc.

mobileron

Why would he need benefits if theres money in the bank,most of us dont have that choice.