Tax credits and inheritance

missie1990

Hi I'm new here so please bare with me, basically my dad died leaving me everything there's his house which once I've got grant of probate will be putting up for sale in order for us to buy our own property, and there's his bank account worth £20,000 pounds coming to me along with a death benefit lump sum from his private pension which is £16,000 I know I'm definitely going to loose my income related ESA and housing benefit what will happen to child tax credits will I loose them to ? I can't find anything online that states about capital or savings and how they affect tax credits the money will be going into a normal current account and not a savings account etc not sure if that makes any difference but any advice I would appreciate .

sammyjammy

Sorry for your loss.  No impact on tax credits assuming other aspects remain the same.  You have to declare if you get more than £300 in interest on your savings thats it.

missie1990

So I assume that it would only get £300 interest if in an isa or savings account etc not a normal current account? 

poppy12345

You would need to have a lot of money to gain £300 of interest, so this doesn't apply to you. If part of your ESA is Contributions based then you will keep this part and only lose the income related part.

Once your savings drop below £16,000 you'll be able to reclaim the means tested benefits again but if all your ESA stops because it's Income related then you will have to claim Universal Credit because new claims for Income Related ESA are no longer possible. If you claim UC in the future then your tax credits will end.

missie1990

Hi poppy yes I guessed that with ESA I only get income related so I am fully expecting to not be entitled anymore and for it to all stop and therefore if it fell below £16,000 it would be universal credit but to be honest I'm trying to keep off that until I'm forced  , as with housing benefit I'll loose that to  , I know i will still get child benefit but I was really unsure about child tax credit as I thought that would stop to would the inheritance trigger a change to universal credit? Or would it just go on as normal and when esa/ housing benefit stops Im assuming tax credits will want proof of how I'm living without those benefits or just a bank statement with the inheritance in will be enough?  

poppy12345

The inheritance will not trigger a move to UC. With savings of more than £16,000 you won't be entitled to any means tested benefits such as HB/ESA and council tax reduction anyway.

HMRC/tax credits will not want to know how you're living without the other benefits. As previously advised the savings will not impact your tax credits.

missie1990

Poppy Thank you I suffer with anxiety so I worry about these things ( I jump to worse case scenario every time ) and obviously I want to do things above board as well the last thing I want is to go to jail like you hear about in the news with people hiding inheritance etc 

calcotti

missie1990 said:

Hi poppy yes I guessed that with ESA I only get income related 

You shouldn’t to guess. Your award should have a calculation breaking it down. However the calculations can be hard to understand because they are badly written so you can ring ESA and ask them whether your award is entirely income based or part contribution based and part income based.

missie1990

Calcotti it's entirely income based my ESA so I know I'm going to loose that when I say I guessed that with ESA it was said more as a figure of speech.