Inheriting a property which is rented out whilst on benefits

feadie66
feadie66 Posts: 8
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edited 11 January at 2:59PM in Benefits & tax credits
Hi any Benefits Whizzes that can help please.
I receive tax credits and housing benefit and am soon to be moved onto UC.
Sadly my Mum just died. She left myself and siblings her whole estate to be divided equally and we are all named executors. The estate includes her property that has tenants in it and they pay rent every month which has been going into Mums bank account.
There is potentially 6 months total of rental income to come in - as the estate is in probate which is going to take another 6 months and when its complete the tenants will leave and we will market the property and then divide the assets.
At the moment the rent is paid into my Mums bank account but my siblings now want to take the money and distribute it between us. However there are also going to be repairs that need doing before the sale so I'm not sure how much the actual profit from this rent will be
Could anyone help with how this rental income will impact my benefits in this period before it is sold (as once it is sold I understand that I will exceed the savings allowance so I get that bit). I am also not sure if at present I am now classified as owing a property, as legally it cant be sold until probate is complete in 6 months.

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  • Grumpy_chap
    Grumpy_chap Posts: 14,395
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    feadie66 said:
    Hi any Benefits Whizzes that can help please.
    I receive tax credits and housing benefit and am soon to be moved onto UC.
    Sadly my Mum just died. She left myself and siblings her whole estate to be divided equally and we are all named executors. The estate includes her property that has tenants in it and they pay rent every month which has been going into Mums bank account.
    There is potentially 6 months total of rental income to come in - as the estate is in probate which is going to take another 6 months and when its complete the tenants will leave and we will market the property and then divide the assets.
    At the moment the rent is paid into my Mums bank account but my siblings now want to take the money and distribute it between us. However there are also going to be repairs that need doing before the sale so I'm not sure how much the actual profit from this rent will be
    Could anyone help with how this rental income will impact my benefits in this period before it is sold (as once it is sold I understand that I will exceed the savings allowance so I get that bit). I am also not sure if at present I am now classified as owing a property, as legally it cant be sold until probate is complete in 6 months.
    Condolences on your loss.

    AIUI, you do not currently own a property. 
    Your Mum's Estate owns the property.  Your Mum's Estate will receive the income until the property is sold.

    The simplest thing would be to not distribute the Estate until the final Estate Accounts can be prepared.  The potential costs associated with the Estate are unknown at this stage.  Depending on timescale, there may be taxation implications.

    Are the Tenants aware of the death of their LL and agreed to move willingly?

    You seem to have acknowledged that once the Estate is distributed, you entitlement to UC would be likely to cease.
  • HillStreetBlues
    HillStreetBlues Posts: 3,083
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    AFAIK the money you get as interim payments will be classed as capital. So normal capital rules for HB anything over £6k will have to be declared.
    Let's Be Careful Out There
  • Spoonie_Turtle
    Spoonie_Turtle Posts: 8,158
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    Interestingly if this all happens before you are told to migrate to UC, you might actually be eligible for UC for 12 months with transitional protection ignoring any savings above £16,000.

    It might not, of course, in which case you are correct that you wouldn't be entitled to UC.  But it may be a possibility.

    I'm sorry for your loss.
  • feadie66
    feadie66 Posts: 8
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    feadie66 said:
    Hi any Benefits Whizzes that can help please.
    I receive tax credits and housing benefit and am soon to be moved onto UC.
    Sadly my Mum just died. She left myself and siblings her whole estate to be divided equally and we are all named executors. The estate includes her property that has tenants in it and they pay rent every month which has been going into Mums bank account.
    There is potentially 6 months total of rental income to come in - as the estate is in probate which is going to take another 6 months and when its complete the tenants will leave and we will market the property and then divide the assets.
    At the moment the rent is paid into my Mums bank account but my siblings now want to take the money and distribute it between us. However there are also going to be repairs that need doing before the sale so I'm not sure how much the actual profit from this rent will be
    Could anyone help with how this rental income will impact my benefits in this period before it is sold (as once it is sold I understand that I will exceed the savings allowance so I get that bit). I am also not sure if at present I am now classified as owing a property, as legally it cant be sold until probate is complete in 6 months.
    Condolences on your loss.

    AIUI, you do not currently own a property. 
    Your Mum's Estate owns the property.  Your Mum's Estate will receive the income until the property is sold.

    The simplest thing would be to not distribute the Estate until the final Estate Accounts can be prepared.  The potential costs associated with the Estate are unknown at this stage.  Depending on timescale, there may be taxation implications.

    Are the Tenants aware of the death of their LL and agreed to move willingly?

    You seem to have acknowledged that once the Estate is distributed, you entitlement to UC would be likely to cease.
    Hi thank you so much for taking the time to reply. In answer to your question the tenants are aware of the death but we have not yet given them notice (as its all happened in the last few weeks) so not sure if they are going to move willingly, but fingers crossed. 
  • sheramber
    sheramber Posts: 18,633
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    The rent money belongs to your mother’s estate. Who is the executor of the estate? They are responsible for dealing with the estate assets.
  • Devongardener
    Devongardener Posts: 367
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    Has the bank been informed of your mother’s death?  Bank accounts are frozen on death, meaning no payments will be received or paid.

  • Hoenir
    Hoenir Posts: 1,210
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    Has the bank been informed of your mother’s death?  Bank accounts are frozen on death, meaning no payments will be received or paid.

    Deposits can still be made. Payments not.  Sometimes there are refunds made by cheque which are in the name of the deceased. 
  • Devongardener
    Devongardener Posts: 367
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    Hoenir said:
    Has the bank been informed of your mother’s death?  Bank accounts are frozen on death, meaning no payments will be received or paid.

    Deposits can still be made. Payments not.  Sometimes there are refunds made by cheque which are in the name of the deceased. 
    Not all banks accept deposits, after death.  Lloyds didn’t when my mother died, and online access was immediately closed too, I had to plead for time to download statements I had missed when acting with POA. 
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