Inheritance

HillStreetBlues

You are talking about inheritance but who died?  Can see it's not your mum.
If someone died what did the will stipulate?  If no one has died  then it would be a gift  and  doesn't have to be gifted to you.

Campbell20

Thank you. It was my grandparent’s land which I believe they stipulated should be shared equally between their 3 children and 8 grandchildren. I think my mum and  aunties were given the money for themselves and their children and they were instructed to keep their share and pass the grandchildren’s money to them. I’ve been trying to get advice from independent solicitors but have not been successful. 

HillStreetBlues

If the will stated "shared equally between their 3 children and 8 grandchildren"  then it's a inheritance if you one of those persons.
So once the  capital becomes in play as far as UC is concerned then your claim will end if over £16k

Campbell20

Thank you that’s really helpful. 

HillStreetBlues

I would forget about the Deed of Variation route.
https://allanjanes.com/-Gifts-to-Beneficiaries-on-Means-Tested-Benefits-a-Rock-and-a-Hard-Place

I wanted to specifically address the use of deeds of variation in relation to beneficiaries who are in receipt of means tested benefits. This is a question that I am being asked more and more, particularly where a beneficiary is elderly and in Local Authority funded care.

A deed of variation is a means of redirecting a gift after a person has already died. The beneficiary who is entitled to the legacy (either by Will or under the intestacy rules) can complete a variation and, in so doing, state that they want all or part of the gift to pass to a different person. For inheritance tax and capital gains tax purposes the gift is treated as though it was made by the deceased, rather than the beneficiary. This is however not the case in the eyes of the Local Authority. A deed of variation completed by a person in receipt of means tested benefits will be treated as a deliberate deprivation of assets, and so they will continue to treat the beneficiary as having received that sum.

The same rules apply to any mean tested benefit not just Local Authority

Yamor

As I mentioned above, it sounds like this inheritance was actually a trust set up by your grandparent, and not a simple inheritance.

If that is indeed the case, then you first had capital for benefit purposes when the asset was appointed out to the beneficiaries, per my post above.

xxxxxxxx

When did you last work or claim Carer's Allowance? 

Depending on your answers you need to urgently claim ESA New Style backdated 3 months.

Also, ask the original solicitors when did the money become yours even though it has not been given to you yet, they should be able to answer that question.

ElwoodBlues

Yamor said:

It sounds like a pretty standard piece of tax planning has happened here.

There was likely a discretionary trust holding the asset. Then, the asset would have been appointed out to various beneficiaries, with holdover relief claimed to ensure no CGT at that point. Then when the asset was sold, the CGT is payable by each beneficiary on their share of the gain.

Assuming this is what has happened:

You would have been given beneficial ownership of a share of the asset some time before the sale. This could have affected your benefits at that point. However, your share of the asset may have had negligible value, due to the difficulty you would have in marketing such a share of the asset.

Once the asset was sold, the money was yours immedistely, despite being in your mother's account. So you definitely would have lost your benefit entitlement at that point.

By the way, the 60-day rule shouldn't apply for the CGT reporting and paying, as that only applies to residential property.

This sounds the most likely situation, hence why the OP has a CGT liability for it. Makes tax sense for the family do do it this way, but doesn't help the OP in respect of UC. Technically the funds belong to them from the date the land sale took place. Unfortunately it's probably too late to divert it now.  

Campbell20

Hi again. I’ve been advised by my auntie that my her and my mum gifted the land owned by my grandparents to their children in 2012. Apparently my mum has paperwork showing this. This I believe was my grandparent’s wish. The land has recently been bought by developers and the money has been distributed to the 11 people in the family, 3 daughters of my grandparents and 8 grandchildren. As this land was gifted to me in 2012 and only recently been sold do I have to declare this to universal credit? My mum is still alive so it’s not part of a will. 

peteuk

I would say yes, it was gifted to the children (your mum and aunty) and the proceeds of the sale split 11 ways.   It will be then up to a DM to make the decision on where it lands within the context of UC.

If you dont declare it then you may find out at a later stage you should have and it would have stopped your IC then you will have a potential overpayment to repay.