Property inheritance

HillStreetBlues

If a person is renting and on income benefit (UC) and inherits a property  but has no intent to live there but does plan on using the money raised from the sale to buy another property and live in that, would capital raised be disregarded for 6 months? 

poppy12345

No, not in this case. Only a property you live in can be disregarded for 6 months, sometimes longer. Or if you've sold the house you live in and are planning on buying another and can prove this.

HillStreetBlues

Thank you

So follow up questions

So you would come off UC once sold  then claim  again once you have bought new property (if capital is under 16k)
But  with UC is using capital allowed to buy a property to live in and is there any limit  the cost of property?  (could the property be classed as too expensive for needs)

Could the quick reclaim for UC be used in this circumstance?

NedS

HillStreetBlues said:

Thank you

So follow up questions

So you would come off UC once sold  then claim  again once you have bought new property (if capital is under 16k)
But  with UC is using capital allowed to buy a property to live in and is there any limit  the cost of property?  (could the property be classed as too expensive for needs)

Could the quick reclaim for UC be used in this circumstance?

That's perfectly allowable. There can be no deprivation of capital for spending that capital on a property that you then live in as you still have the capital, just that now it is disregarded in full as it's in the form of a property that you live in. There are no limits.

calcotti

HillStreetBlues said:

Could the quick reclaim for UC be used in this circumstance?

Normally you can do a rapid reclaim if it is within six months if you remained eligible. In the case of excess capital you would no longer be eligible so I think you not be possible to do a rapid reclaim. However I don’t know.

I suspect however that the question may be moot because so many property purchases seem to take longer than six months!

TELLIT01

As calcotti suggests, it would be very quick if you could get the current property on the market, sold and another property purchase completed in 6 months.  It's possible but improbable.

I don't know if this would be possible, but if the existing property was sold by the executors and the proceeds past to the OP, a purchase completion within 6 months would be possible.  I don't know if a rapid reclaim would be possible either.

Alice_Holt

HillStreetBlues said:

If a person is renting and on income benefit (UC) and inherits a property  but has no intent to live there but does plan on using the money raised from the sale to buy another property and live in that, would capital raised be disregarded for 6 months? 

     Note that is possible for the capital in the property to be disregarded during the sale process. 
However, once sold and the monies in the claimants bank account it will be treated as capital.

"Premises person is trying to sell
H2115 Where a person is trying to dispose of premises, they can be disregarded from the calculation of that person’s capital where they are taking reasonable steps to dispose of the premises and those steps have been commenced within the last 6 months .

 UC Regs, Sch 10, para 6

poppy12345

Alice_Holt said:

HillStreetBlues said:

If a person is renting and on income benefit (UC) and inherits a property  but has no intent to live there but does plan on using the money raised from the sale to buy another property and live in that, would capital raised be disregarded for 6 months? 

     Note that is possible for the capital in the property to be disregarded during the sale process. 
However, once sold and the monies in the claimants bank account it will be treated as capital.

"Premises person is trying to sell
H2115 Where a person is trying to dispose of premises, they can be disregarded from the calculation of that person’s capital where they are taking reasonable steps to dispose of the premises and those steps have been commenced within the last 6 months .

 UC Regs, Sch 10, para 6

That's a very good point Alice, which i forgot to mention so thank you!

HillStreetBlues

Thank you all for all your advice.

Further to Alice's very helpful post.

If it happened the other way round  that while the house is for sale,  that person put an offer in for another house,
If then the contracts were all signed the same day (which I believe normally happens) then if anything is left over is under £16K  on the final day of assessment period then the UC claim would continue (with any capital over £6k reported) also reported  the change of address and no rent cost)

Would that be the case?

NedS

Yes. The reason the property is disregarded for 6 months if it is up for sale is that the claimant cannot benefit from it's value during that time - they cannot reasonably live off that capital or use it to pay the bills. The moment it's sold and the cash becomes available to the claimant, they should declare it and the claim would end assuming in excess of £16k. However, if the value is transferred via the conveyancing solicitor towards the purchase of a property that the claimant is to be living in as their primary residence, then they have never had access to the cash so there is nothing to declare, other than a change of address and that they are no longer claiming the housing element for rent as they now own the property. Phew, does that make sense?

HillStreetBlues

NedS said:

Yes. The reason the property is disregarded for 6 months if it is up for sale is that the claimant cannot benefit from it's value during that time - they cannot reasonably live off that capital or use it to pay the bills. The moment it's sold and the cash becomes available to the claimant, they should declare it and the claim would end assuming in excess of £16k. However, if the value is transferred via the conveyancing solicitor towards the purchase of a property that the claimant is to be living in as their primary residence, then they have never had access to the cash so there is nothing to declare, other than a change of address and that they are no longer claiming the housing element for rent as they now own the property. Phew, does that make sense?

Thanks,  makes total sense.