Taking out a mortgage with a gifted deposit - universal credit

[Deleted User]

Hi everyone,

I am after some advice regarding taking out a mortgage on benefits. Just for some context, I am on PIP and LCWRA UC and my partner works full time, We both do not live together and are living with our parents. My partner has received an inheritance of £16,000 however this is in an account that is not in his name and is being held by his parents in a trust fund.

We are now at the point of looking at mortgages and are hoping to take out a mortgage with this money as a deposit, but it is being paid for by his parents to the solicitor. Would this be acceptable and when would I need to declare to the DWP that we have got a mortgage and moved in together and also with details about the deposit being gifted etc. I am worried that this maybb deprivation of capital. any advice will be great, thanks 

GrumpyDil

They will need to tell the solicitor about the source of funds but if it is from an inheritance then it isn't a gifted deposit in the way that term is used because it is your partner's money so there cannot be any question of repaying it.

silvercar

You’d be better posting on the benefits board, but generally you notify a change in circumstances. So the moment you move in together, you would need to notify DWP. Your partners money couldn’t be seen as a deprivation of capital, particularly as it would be paid over at exchange when you aren’t even living together.

The benefits board is here: https://forums.moneysavingexpert.com/categories/benefits-tax-credits

Keep_pedalling

Why is his money being held in trust? I know a lot of wills state that a beneficiary can’t have their inheritance until they are 22 or 25, but the reality is that this is not an enforceable clause and the beneficiary can claim the money when they reach 18 (16 in Scotland). If as I suspect this is a bare trust the money is already his not his parents. 

sammyjammy

If none of this money is going through your bank account or belongs to you you just need to declare a change of address and that you are now living with your partner, they will then need to make a claim to Universal Credit as you will then be treated as a household for Universal credit purposes, if you declare living with a partner you will be sent a link for his claim..

Muttleythefrog

Thinking the same as previous poster. You're not currently considered a cohabiting couple so proceed as you intend and then declare to UC the change of address and that you've moved in with partner who will then make claim and be linked to yours. Obviously then your household circumstances will be considered for claim and entitlement to UC potentially affected - I assume this is something you've calculated and prepared for (calculators like https://www.entitledto.co.uk/ if needed) as obviously your partner's earning will be considered in calculation of UC entitlement for you as a couple.

I am assuming he currently is not claiming UC (as well as working) - if that is false assumption then state so.

peteuk

Im not sure 

a) £16k is going to get much in the way of mortgage
b) mainstream lenders will lend to those on UC

But you seem to be past this stage.

when you apply for a mortgage your other half will have to prove where the monies came from.
 If it is held in his parents name, and then should anything happen to them unless there is a clear statement eg the original will then it may be looked upon unfavourably by HMRC should their finances e investigated.

Id also question the optics of £16K as this is the upper threshold for entitlement for means tested benefits, the optics aren’t the best. 

Spoonie_Turtle

peteuk said:

 If it is held in his parents name, and then should anything happen to them unless there is a clear statement eg the original will then it may be looked upon unfavourably by HMRC should their finances e investigated.

Id also question the optics of £16K as this is the upper threshold for entitlement for means tested benefits, the optics aren’t the best. 

Irrelevant to the OP though.  If it's used to buy a home to live in then it's extremely unlikely (so unlikely that the advice given here is usually that it just won't be) to be regarded as DoC for the partner.  Especially if it's not even in their name.

Might be a problem if the parents needed to claim means-tested benefits, but that's their own responsibility and if they're in a position to be gifting that much then presumably MTB aren't in their immediate future.

£16,000 is a lot of things - half of £32k, quarter of £64k, third of £48k - there could be any number of reasons the amount is what it is.  Not everyone even knows about benefits savings thresholds, and of those who are aware of them I've encountered many people who genuinely think £6,000 is the upper limit for eligibility.

[Deleted User]

Hi everyone,
I am disabled and on PIP and LCWRA, me and my partner do not live together and are with our parents but are now at the stage of wanting to move in together and are looking at mortgages. 

My partner has inherited 16k solely for a mortgage deposit, and is being held in an account in his parents name, And we are not on this at all or using it for any kind of beneficial gain
 
I have spoken to a Benefits specialist at CAB who has advised to inform the DWP that we are getting a mortgage and where the money is coming from. 

I am confused by this, as this money is not in our name, it is not our savings and not for any kind of beneficial gain and its for a house. I understand that I would need to inform them when we move in together as a change in circumstances. Would I need to inform them of this before we take the mortgage out? 
Thanks 👍

HillStreetBlues

Forget about PIP as doesn't matter in this case.
Is the UC a single or joint claim as you say partner but that you aren't living together. If your is a single claim  does your partner claim?

Muttleythefrog

I was going to answer by first asking some questions... but you keep opening threads asking the same thing.. and not responding....

You need to read answers and start engaging posters otherwise this is going around in circles and wasting a lot of people's valuable time.

Refer here:
https://forums.moneysavingexpert.com/discussion/6484617/applying-for-a-mortgage-with-an-inherited-deposit-universal-credit

Importantly we need to understand the circumstances of your partner's 'inheritance' and whether they claim means tested benefits like Universal Credit themselves.. as we need to establish if already these monies should affect existing claim. Another person was concerned you'd be able to get a suitable mortgage given circumstances. I was concerned you may not have calculated for the new financial horizon if you do move in together and are treated as a couple for benefit purposes. The logistics of informing Universal Credit otherwise should be simple and straightforward... but it may not be if there are issues you are not clarifying.

The CAB advice is probably quite reasonable... if in doubt or could be issues best to simply inform them in journal and then they can never come back and say you didn't declare circumstances and sometimes a decision maker will make a ruling that gives black and white clarity going forward. (It is entirely possible that like here they were unable to get clarity on the nature of the funding source and so gave generic advice).

I previously advised 

Thinking the same as previous poster. You're not currently considered a cohabiting couple so proceed as you intend and then declare to UC the change of address and that you've moved in with partner who will then make claim and be linked to yours. Obviously then your household circumstances will be considered for claim and entitlement to UC potentially affected - I assume this is something you've calculated and prepared for (calculators like https://www.entitledto.co.uk/ if needed) as obviously your partner's earning will be considered in calculation of UC entitlement for you as a couple. I am assuming he currently is not claiming UC (as well as working) - if that is false assumption then state so.