Inheritance and Deprivation of capital rules

Bozzi

Hello, I have received an inheritance because my Grandmother died. My Aunt sold the house and received the money which got split between 5 of us, including her, my 2 brothers, my Mother and me - leaving £15,359 to me. Over a period of 6 months, she has been giving me small lump sums of the amount into my bank account from the 'executors account' (in which she has control over). My bank balance has never exceeded £6,000. I have spent approximately, £6,976 on things to improve my quality of living including new furniture as well as debts in which I have receipts and invoices for which leaves £8,383 remaining. Out of this remaining amount, I have spent approximately £6,233 (over a period of approximately 6 months, on further things that I need including new clothes and daily living expenses including shopping and food, leaving approximately, £2,150 remaining. For that £6,233, I have stupidly not kept hold of receipts.

I am on income related ESA and I am worried that I'm going to be done for deprivation of capital because I have not kept receipts on the amount I spent on daily living expenses including food and shopping (£6,233) over a period of 6 months. I have the receipts for the £6,976 that I spent on things to improve my quality of living including new furniture and paying off debts, although. I would like to state that I have not deprived myself of capital - the majority of the funds was spent on things that I genuinely need.

She gave it to me in small lumps as and when I needed it, meaning my balance has never exceeded £6000.

Has anyone got any thoughts on this and reassurance? Thank you

tomtom256

It doesn't matter that your balance never exceded £6,000.

What you have done is intentially hide this capital and spent it, without declaring you over £6,000 in savings to the DWP. From what you are saying, the money was paid to you in small amounts, so as to remain hiddedn and keep your own bank balance below £6,000, so as not to affect your entitlement.

The best thing to do would be declare this to the DWP and let them sort it out via a decision maker.

poppy12345

I agree with tomtom here. You were given small amounts over a very short period of time so to me it sounds like you did this to keep your savings under £6,000.

DWP will eventually find out, they always do. Best thing to do is report it and let a decision maker decide whether it's deprivation of capital and you'll still be classed as having the money. If you claim any other means tested benefits like housing benefit or council tax reduction then you'll need to report this to your local Authority as well.

If any part of your ESA is Contributions based, this won't be affected.

cx6

Once the inheritance becomes available then you are the beneficial owner and it doesn't matter that it stayed in the executor's account and only paid to you in dribs and drabs - it was your money - you were the beneficial owner and thus should have declared that capital in full.

By doing what you did it could be seen as trying to hide the money and as you probably know the penalties for doing that can be quite severe, so if I were you I would declare it now.

TELLIT01

Interesting situation.  The executor is also clearly party to fraud here and equally liable to prosecution.  Possibly even more so if it was their idea in the first place.

NedS

All estates/inheritances are notified to and recorded with HMRC for tax purposes, and HMRC and DWP share information via automated computer systems which will flag your inheritance for further investigation. It may take them a couple years to catch up with you, but they will. You can live in fear for a couple years waiting for the inevitable or you can declare what you have done immediately to DWP and hopefully (for you) they will deal with the amounts and make a decision as to whether they will affect the amount of benefit you receive or not.

What was the purpose of the executor releasing the inheritance as small payments over a 6 month period?

By not declaring it, you open yourself up to prosecution for fraud as it would appear you and the executor have conspired to hide an inheritance for the purposes of gaining more means tested benefits than you are entitled to receive. The evidence against you does not look good.

Bozzi

NedS said:

All estates/inheritances are notified to and recorded with HMRC for tax purposes, and HMRC and DWP share information via automated computer systems which will flag your inheritance for further investigation. It may take them a couple years to catch up with you, but they will. You can live in fear for a couple years waiting for the inevitable or you can declare what you have done immediately to DWP and hopefully (for you) they will deal with the amounts and make a decision as to whether they will affect the amount of benefit you receive or not.

What was the purpose of the executor releasing the inheritance as small payments over a 6 month period?

By not declaring it, you open yourself up to prosecution for fraud as it would appear you and the executor have conspired to hide an inheritance for the purposes of gaining more means tested benefits than you are entitled to receive. The evidence against you does not look good.

The reason why the payments were sent to me over time in lump sums is because I have issues with budgeting and I'm currently receiving support for this in the form of budgeting plans created by my Recovery Worker (who works for NIHCSS (Norfolk Integrated Housing and Community Support Service)). Therefore, it was in my best interest to receive my inheritance over time, as and when I required it.

My Aunt received advice from Scope who stated that nothing has to be declared until the bulk of the inheritance has been received into my bank account from the Executors Account (in which the bulk of the inheritance was received into my bank account during the months of March 2022 and April 2022). So I am in the process of declaring this now to the Local Authority and DWP.

Bozzi

TELLIT01 said:

Interesting situation.  The executor is also clearly party to fraud here and equally liable to prosecution.  Possibly even more so if it was their idea in the first place.

The reason why the payments were sent to me over time in lump sums is because I have issues with budgeting and I'm currently receiving support for this in the form of budgeting plans created by my Recovery Worker (who works for NIHCSS (Norfolk Integrated Housing and Community Support Service)). Therefore, it was in my best interest to receive my inheritance over time, as and when I required it.

My Aunt received advice from Scope who stated that nothing has to be declared until the bulk of the inheritance has been received into my bank account from the Executors Account (in which the bulk of the inheritance was received into my bank account during the months of March 2022 and April 2022). So I am in the process of declaring this now to the Local Authority and DWP.

Bozzi

cx6 said:

Once the inheritance becomes available then you are the beneficial owner and it doesn't matter that it stayed in the executor's account and only paid to you in dribs and drabs - it was your money - you were the beneficial owner and thus should have declared that capital in full.

By doing what you did it could be seen as trying to hide the money and as you probably know the penalties for doing that can be quite severe, so if I were you I would declare it now.

The reason why the payments were sent to me over time in lump sums is because I have issues with budgeting and I'm currently receiving support for this in the form of budgeting plans created by my Recovery Worker (who works for NIHCSS (Norfolk Integrated Housing and Community Support Service)). Therefore, it was in my best interest to receive my inheritance over time, as and when I required it.

My Aunt received advice from Scope who stated that nothing has to be declared until the bulk of the inheritance has been received into my bank account from the Executors Account (in which the bulk of the inheritance was received into my bank account during the months of March 2022 and April 2022). So I am in the process of declaring this now to the Local Authority and DWP.

Bozzi

poppy12345 said:

I agree with tomtom here. You were given small amounts over a very short period of time so to me it sounds like you did this to keep your savings under £6,000.

DWP will eventually find out, they always do. Best thing to do is report it and let a decision maker decide whether it's deprivation of capital and you'll still be classed as having the money. If you claim any other means tested benefits like housing benefit or council tax reduction then you'll need to report this to your local Authority as well.

If any part of your ESA is Contributions based, this won't be affected.

The reason why the payments were sent to me over time in lump sums is because I have issues with budgeting and I'm currently receiving support for this in the form of budgeting plans created by my Recovery Worker (who works for NIHCSS (Norfolk Integrated Housing and Community Support Service)). Therefore, it was in my best interest to receive my inheritance over time, as and when I required it.

My Aunt received advice from Scope who stated that nothing has to be declared until the bulk of the inheritance has been received into my bank account from the Executors Account (in which the bulk of the inheritance was received into my bank account during the months of March 2022 and April 2022). So I am in the process of declaring this now to the Local Authority and DWP.

Bozzi

tomtom256 said:

It doesn't matter that your balance never exceded £6,000.

What you have done is intentially hide this capital and spent it, without declaring you over £6,000 in savings to the DWP. From what you are saying, the money was paid to you in small amounts, so as to remain hiddedn and keep your own bank balance below £6,000, so as not to affect your entitlement.

The best thing to do would be declare this to the DWP and let them sort it out via a decision maker.

The reason why the payments were sent to me over time in lump sums is because I have issues with budgeting and I'm currently receiving support for this in the form of budgeting plans created by my Recovery Worker (who works for NIHCSS (Norfolk Integrated Housing and Community Support Service)). Therefore, it was in my best interest to receive my inheritance over time, as and when I required it.

My Aunt received advice from Scope who stated that nothing has to be declared until the bulk of the inheritance has been received into my bank account from the Executors Account (in which the bulk of the inheritance was received into my bank account during the months of March 2022 and April 2022). So I am in the process of declaring this now to the Local Authority and DWP.