deprivation of assets 27 August 2022 at 4:08PM in Benefits & tax credits 5 replies 591 views

nbdy

Hi

I am going to be receiving an inheritance and I currently get working tax credits and council tax benefit.

My inheritance will put me over the savings threshold for these benefits.

However I have been on a very low income for several years now and some things have been neglected and could really do with some spending.

So if I spend the inheritance on the following things would any of them be classed as deprivation of assets?

1. New kitchen and appliances, my current kitchen is literally falling apart with doors falling off and appliances held together with gaffer tape and is probably not safe.

2. Dentistry, I have several missing teeth that has an effect on my mental heath and confidence and I haven't smiled in public for over a decade now. It would massively improve my state of mind to have implants.

3. Investing in my business, my business has been running on nothing for years, it could really do with some investment in new technology, some advertising and outsourcing some work.

4. Paying off loan to my spouse, who gave me money to buy a car. This would also help my mental health as this causes anxiety and stress in our relationship.

5. Home improvements like insulation etc to reduce bills.

Thanks for any advice.

marcia_

 There is no savings limit for tax credits 
council tax there are limits 

nbdy

Thanks for that.

So would any of the above be classed as deprivation of assets for council tax benefit?

And is it was how long would I lose council tax benefit for, because I would have to factor that in to my budget.

huckster

For Council Tax you would need to disclose the inheritance when received and provide details of how you intend to spend the money.  There will be a process for the Council to consider the ways you are spending the money and make a decision on what capital they can ignore and for how long.  You may have to provide a quote for the kitchen replacement works, quote for dental works, quote for the home improvements plans and details of your business spending plans..  They may not accept the repayment to your spouse, as you are married, so share your finances.

nbdy

Thanks for that.

It's going to take me a while to spend the inheritance given my fear of dentists and the business spending would be planned throughout the year. 

Is it a better option to just notify them that I no longer qualify for the benefit, pay the full council tax and then reapply when I am back below the threshold in a years time?

marcia_

nbdy said:

Thanks for that.

Is it a better option to just notify them that I no longer qualify for the benefit, pay the full council tax and then reapply when I am back below the threshold?

 Probably easiest than jumping through hoops. Shouldn't eat a large amount out of your savings unless you are in the top band in a really expensive council tax area. And you will still get your tax credits.