Housing benefit, inheritance and purchasing a property to live in

FallingLeaves

HillStreetBlues said:

Being a flat is there a service charge to consider?

Yes good point, there is. I think it's about £170pm.
That's not paid at the moment as it's covered by the landlord, but obviously would become due if they purchased the flat.

calcotti

HillStreetBlues said:

I didn't ask about if someone gave money away, I asked  if someone used money from their inheritance to buy (or part buy) their home would it be deprivation of capital?

No it wouldn’t be.

kaMelo

I think you might also have a struggle finding a lender willing to give you a mortgage for your half of the purchase whilst knowing they'd have a struggle to repossess the property should you fail to keep up payments as the resident owns the other half.
Aside from that, if you managed to achieve what you stated initially I'd tend to agree with other posters that they would qualify and be able to claim PC and CTR but I don't see any way in that scenario that they could claim housing benefit.

sheramber

You would need to pay tax on any profit from the rent income you received. You can no longer claim tax relief on any capital repayment part of the mortgage payment. Tax relief is restricted to 20% on the interest part of the payment.

You would pay the extra stamp duty as your purchase would be a second home.

Rubyroobs

It's not always possible to claim housing benefit if renting from a relative, especially if the property has just been purchased and not rented by you before.

peb

Buy in his name. Equity (release) mortgage.  However the big issue is the maintenance of the property thereafter, service charges can increase spectacularly.

HillStreetBlues

peb said:

Buy in his name. Equity (release) mortgage.  However the big issue is the maintenance of the property thereafter, service charges can increase spectacularly.

If he owns he flat service charges can be claimed back via his pension credit, there could be some items that can't be claimed for.

tightauldgit

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?

I think you would have a hard time claiming that someone with 100k in liquid assets in the bank is in danger of becoming homeless. 

Incidentally last year I was claiming UC and then my inheritance came through from my father's passing away - I intended to use it to clear my mortgage as the payments were not sustainable for me with minimal income. UC people seemed very non-commital on whether it would be considered deprivation of capital if I continued to claim but seemed to suggest it might well be. As it was the residual inheritance put me over the savings limit anyway so it wasn't an issue I had to press - but were they incorrect?  

HillStreetBlues

tightauldgit said:

I think you would have a hard time claiming that someone with 100k in liquid assets in the bank is in danger of becoming homeless.

If a person is issued with a Section 21 they are threatened with homelessness, nothing to do with that's in the bank.

tightauldgit said:

Incidentally last year I was claiming UC and then my inheritance came through from my father's passing away - I intended to use it to clear my mortgage as the payments were not sustainable for me with minimal income. UC people seemed very non-commital on whether it would be considered deprivation of capital if I continued to claim but seemed to suggest it might well be. As it was the residual inheritance put me over the savings limit anyway so it wasn't an issue I had to press - but were they incorrect?  

Paying of a mortgage is always allowed on UC. 
With UC paying off a debt is never DoC 

 

calcotti

tightauldgit said:

Incidentally last year I was claiming UC and then my inheritance came through from my father's passing away - I intended to use it to clear my mortgagee with minimal income. ….UC people seemed very non-commital on whether it would be considered deprivation of capital if I continued to claim but seemed to suggest it might well be. …were they incorrect?  

Using an inheritance to pay off a mortgage is definitely not deprivation of capital for UC. The UC legislation expressly states that paying off debt is never deprivation of capital.
https://www.legislation.gov.uk/uksi/2013/376/regulation/50