Selling a home when on Universal Credit?

fazrewards

Hi,

I am in the process of selling a property that is in my name. The money will then be sent over to my son who will use it to pay of his mortgage. As the property is in my name, the solicitor has said the money needs to first come into my bank account and then after this I will gift this to my son.

Does anyone know if this will impact my universal credit and what should be done?

HillStreetBlues

Your UC will end ( I'm taking property is over £16k)
If you do what you're intending  it will be class as depreciation of capital and you will be treated as still having the money.
Are you currently living in the property you are selling?

Spoonie_Turtle

fazrewards said:

Hi,

I am in the process of selling a property that is in my name. The money will then be sent over to my son who will use it to pay of his mortgage. As the property is in my name, the solicitor has said the money needs to first come into my bank account and then after this I will gift this to my son.

Does anyone know if this will impact my universal credit and what should be done?

Oh dear.  You can't simply gift money to someone like that without UC treating you like you still have it.

If you used it to buy a home for yourself, it could be disregarded and then wouldn't be deprivation of capital once you did buy the home, but not give it to someone else. 

Your UC will end once the money is in your account and that will be it, unless the sale results in a sum below £16,000 which I'm assuming is unlikely.

Muttleythefrog

Whoooah.... halt!

Universal Credit rules allow you to sell the home you live in and then use the money to purchase another (I've done this) within reasonable time.

Is this a property you live in? - if it is not then that capital likely should already be considered for calculation of Universal Credit. Normally owning more than one property will eliminate entitlement to U/C as normally only the property you live in is disregarded as capital and given property prices even a standalone garage would typically cost more than the £16k upper limit on savings. It is your responsibility to inform them of anything that affects entitlement and I assume you honoured that if you have property you do not live in.

But the rules do not allow you to sell your property (whether you live in it or not) and give away the proceeds - this would be considered deprivation of capital and they'll consider you still have it no matter what the process for transferring it as a gift. Gifting money to relatives is a classic route of attempted capital deprivation for the gain of benefits. It appears you want to pay off your son's debt.

Is there any pertinent information we're missing as to be honest I'm surprised you've got this far in furthering the idea without recognising there could or would be a serious issue... did you inherit the property recently for example... or do you plan on moving in with him... or is loss of U/C of little concern? 

fazrewards

Muttleythefrog said:

Whoooah.... halt!

Universal Credit rules allow you to sell the home you live in and then use the money to purchase another (I've done this) within reasonable time.

Is this a property you live in? - if it is not then that capital likely should already be considered for calculation of Universal Credit. Normally owning more than one property will eliminate entitlement to U/C as normally only the property you live in is disregarded as capital and given property prices even a standalone garage would typically cost more than the £16k upper limit on savings. It is your responsibility to inform them of anything that affects entitlement and I assume you honoured that if you have property you do not live in.

But the rules do not allow you to sell your property (whether you live in it or not) and give away the proceeds - this would be considered deprivation of capital and they'll consider you still have it no matter what the process for transferring it as a gift. Gifting money to relatives is a classic route of attempted capital deprivation for the gain of benefits. It appears you want to pay off your son's debt.

Is there any pertinent information we're missing as to be honest I'm surprised you've got this far in furthering the idea without recognising there could or would be a serious issue... did you inherit the property recently for example... or do you plan on moving in with him... or is loss of U/C of little concern? 

Sorry just to give context if this helps further.

1 - House is not where I am living at the moment it is empty and is in my name.

2 - I have no other property in my name

3 - I have had to move last year to look after my mother so live with her at property in her name.

4 - I wanted to use money to help son to buy/mortgage their house.

5 - The universal credit address I informed them last year of my situation so moved my address.

6 - Sale will be above 100K

I am happy to cancel universal credit and discuss with son on situation but just wanted to get some advice on here before understanding what steps to take.

poppy12345

Are UC aware of the property you have in your name? It could have been disregarded for up to 6 months, potentially longer if it was up for sale when you moved in with your mother.

Once it's sold and you have the money you will need to report the changes to UC and then your claim will end.

fazrewards

poppy12345 said:

Are UC aware of the property you have in your name? It could have been disregarded for up to 6 months, potentially longer if it was up for sale when you moved in with your mother.

Once it's sold and you have the money you will need to report the changes to UC and then your claim will end.

Yes i did let them know. That is fine, I was thinking of letting them know in advance so it can be ended.

poppy12345

When you told them was it a decision maker that agreed to the property being disregarded? If you have access to a journal then you should have received a letter on there telling you the decision on the disregard.

You should wait until you have access to the money before reporting changes.

Muttleythefrog

My thoughts match poppy...

Firstly sorry you found yourself having to make these changes.. 

I wonder what decision they took on your ownership of the property you stopped residing in - a decision maker presumably did provide one? The change you were reporting should have been more than a simple change of address - you owned a property you no longer lived in.

Once sold the money likely ends your claim. Gifting it to son would surely be considered deprivation of capital.

I wonder if in your situation I would have pondered whether there was some possibility of selling your home and buying something very close to your mother... it may not have been satisfactory for the care/support you need to provide but it would have potentially overcome the problem of deprivation as selling your home and intending to buy another would have been possible... potentially moving in with mother if sale preceded purchase... they could disregard sale monies for up to 6 months and potentially extend further if say a purchase fell through. Alternatively of course moving mother in with you which again may not have been practical.

As it is.. assuming you proceed and lose means tested benefits you may be better off keeping the money and getting a few thousand interest to help you out each year that giving it away. Obviously get a benefit check as well... Carers Allowance etc