Housing benefit, inheritance and purchasing a property to live in

FallingLeaves

calcotti said:

As explained by elsen, to be accepted as a commercial tenancy the local authority would have to accept that you would evict them if they failed to pay rent. They probably will not accept this - this is always a risk of renting from relatives but more difficult if you are go-owners.

If he has £60 of Pension Credit he would lose this when he inherits along with the HB and CTR.

If the capital was used to buy a share of the property he would be able to reclaim Pension Credit and would get the Council Tax Reduction back but I can’t see a HB claim being accepted but it will be down to the local authority to decide.

Thank you. Interesting to know that PC and CTR could still be applicable. 

What is my best next step to look into the HB part? Should I talk to the L.A., how would that work? I feel cautious about doing /saying something wrong that then jeopardises something the future.

If they used the inheritance as the deposit / pay for 50% of the house, but didn't claim any ownership of it (i.e. 100% owned by me) would that change things? I assume that could be a commercial rent, but does it become deprivation of capital as they 'gave' the inheritance away, even though they then lived in the property?

calcotti

FallingLeaves said: If they used the inheritance as the deposit / pay for 50% of the house, but didn't claim any ownership of it (i.e. 100% owned by me) would that change things?

In that case he’s given that money away which is deprivation of capital which means that he will treated as still having it.

HillStreetBlues

FallingLeaves said:

If they used the inheritance as the deposit / pay for 50% of the house, but didn't claim any ownership of it (i.e. 100% owned by me) would that change things? I assume that could be a commercial rent, but does it become deprivation of capital as they 'gave' the inheritance away, even though they then lived in the property?

Yes, it would.

Alice_Holt

Doesn't sound a sensible scheme to me. 

No HB payable as the LA would view such an arrangement as a "contrived" tenancy, and deprivation of capital are all potential snags. 

May be worth checking if there are any available local social housing sheltered schemes, and use the inheritance to make his life more comfortable.

born_again

FallingLeaves said:

Some other points that may be relevant...
They would continue to live in the flat on their own.
I already own my own home with a mortgage.

Aside from the other issues. Do you have the funds for a 2nd mortgage. Which I think would have to be a Buy to let one (not 100% sure)

Alice_Holt

born_again said:

FallingLeaves said:

Some other points that may be relevant...
They would continue to live in the flat on their own.
I already own my own home with a mortgage.

Aside from the other issues. Do you have the funds for a 2nd mortgage. Which I think would have to be a Buy to let one (not 100% sure)

    And the means to maintain / run two properties.

   Plus potential future CGT, etc,etc.  

HillStreetBlues

Alice_Holt said:

Doesn't sound a sensible scheme to me. 

No HB payable as the LA would view such an arrangement as a "contrived" tenancy, and deprivation of capital are all potential snags. 

May be worth checking if there are any available local social housing sheltered schemes, and use the inheritance to make his life more comfortable.

Just on the the single issue, would it be deprivation of capital if the reason for making the purchase is to stop that person being made homeless?

sourpuss2021

Surely if the property is bought “Tenants
in common” with both OP and the 70 year old owning 50% shares, that will be treated differently than if they both together own 100% of the property?   You’d have thought benefits could be claimed for the 50% that he does not own.

Lifematters

I think you may be getting confused with shared ownership schemes. These are only applicable to social housing. In your scenario you would be co-owners, so both treated as ‘owners’ and as such excluded from HB. 

poppy12345

HillStreetBlues said:

Alice_Holt said:

Doesn't sound a sensible scheme to me. 

No HB payable as the LA would view such an arrangement as a "contrived" tenancy, and deprivation of capital are all potential snags. 

May be worth checking if there are any available local social housing sheltered schemes, and use the inheritance to make his life more comfortable.

Just on the the single issue, would it be deprivation of capital if the reason for making the purchase is to stop that person being made homeless?

It would still be very unlikely that they could claim HB for the rent. Therefore there would still be issues because 100k won’t be enough to buy outright without their family.