Tax credits and second property

Dachshund23

Do I need to tell tax credits about my second property if I let my son live there rent free so no rental income and I pay the mortgage 

HillStreetBlues

I can't see why you would have too as it's only any income that would matter.

This will change a year after porting over to UC.

Dachshund23

Its just that I bought the property 10 years ago and just recently come across notional income which I don’t really understand when I’m reading it

Grumpy_chap

Is there a reason why your son doesn't pay any rent?

It might be better for him to understand the true cost of living.  
Depending on details, he may receive support to the cost of housing. 

Dachshund23

It’s because at the time he couldn’t take out a mortgage as he had only just started employment my brother gifted me 16 thousand pound to put down a deposit for him and the agreement was at the time he’d take over the mortgage after 2 years if we helped him out but we’ve had a lot of things gone on since then he moved back home for 4 years and then back to live there but my brother also past away and left him his business so he has just paid off the rest of the whole mortgage 50 thousand and that’s how everything come about because we didn’t know about capital gains and think we could be in trouble the house was always meant to of been for him that’s why rent was never charged

peteuk

For tax credit, I believe not, however Universal credit will view a second home as savings.  Theres been a few threads in which this has been discussed.

Grumpy_chap

Would the most straightforward thing here, to normalise everything, now that the son has "means" is for the son to buy the property.  There will be a SDLT cost plus (I think) CGT - both based on the open market value of the property.  This will need to be done at some point so sooner rather than later may be best.  Whatever impact that has on benefits can then be addressed - I don't know whether there would be any consideration of past income (rent) that was forfeited.

Dachshund23

I just don’t know if this would be classed a fraud but I honestly didn’t know what notional income was

Dachshund23

Hi I was wondering does anyone else have any more knowledge to help me out further please 

marcia_

Dachshund23 said:

Hi I was wondering does anyone else have any more knowledge to help me out further please 

Knowledge about what? 

HillStreetBlues

With WTC you can have a second property.
You don't have to rent it out and you can let anyone stay free of charge, so there is no notional income.