Share in property abroad and universal credit

Puppy29

Hi, 

My mother passed away a few years ago. My mother and father jointly own a property in France. It is worth £62000. My father wants to give sole ownership of the property to me and my brother. A 50% share each.

I am on Universal Credit. My brother is refusing to sell the property. Instead, he wants to rent it out.

I am happy to pay tax on the income we receive and know that my UC payments will go down as a result of receiving this income. We would only receive around £4000 PA each from rental income so my universal credit shouldn't go down by much.

My question is, would Universal credit see the property as capital and therefore stop my Universal credit completely because it is worth more than the £160000 savings allowance that you allowed.

I can't access the money from my share in the property because my brother is refusing to sell it and it's impossible to live on the £4000 rental income I will be receiving from the rental so I am very worried.

Any information would be gratefully received.

Many thanks.

Caz3121

Vanillapod said:

My father wants to give sole ownership of the property to me and my brother. A 50% share each.

why does your father want to do this now? - has he taken legal advice - it could have implications on him

Puppy29

Yes, he wants to do this now although he has not gone through probate in France yet for my mum.

poppy12345

Rental income is ignored for UC purposes. However, a property you don't live in is treated as capital as it's more than £16,000 UC would end.  

Whether it can be disregarded because your brother is refusing to sell it, I do not know, others may know but it would ultimately be down to a decision maker to decide. 

born_again

The property will also be classed as Capital. Plenty of threads on this subject


https://forums.moneysavingexpert.com/discussion/6206137/claiming-universal-credit-if-you-have-a-second-home-you-rent-out

Grumpy_chap

Vanillapod said:

Hi, 

My mother passed away a few years ago. My mother and father jointly own a property in France. It is worth £62000. My father wants to give sole ownership of the property to me and my brother. A 50% share each.

I am on Universal Credit. My brother is refusing to sell the property. Instead, he wants to rent it out.

I am happy to pay tax on the income we receive and know that my UC payments will go down as a result of receiving this income. We would only receive around £4000 PA each from rental income so my universal credit shouldn't go down by much.

My question is, would Universal credit see the property as capital and therefore stop my Universal credit completely because it is worth more than the £160000 savings allowance that you allowed.

I can't access the money from my share in the property because my brother is refusing to sell it and it's impossible to live on the £4000 rental income I will be receiving from the rental so I am very worried.

Any information would be gratefully received.

Many thanks.

Why is your father looking to give away the property?
I assume it is a second property for your father and not where he lives.
Has he considered possible DoA (deprivation of assets) considerations in the context of any future care needs he may have?

AIUI, if you own 50% of a property worth £62k, so £31k, that will be treated as capital and exceeds £16k so leaves you with zero UC.  There are some considerations for disregard, but I do not believe any would apply here, certainly not long term.

If your brother does not wish to sell the property, would he be able to buy you out?  At least then you would have the actual £31k to do with as you choose (though will still be treated as capital for UC purposes unless you have valid options for spending the sum received).

kashmirix

If a property is occupied, in whole or in part, by a relative who is of pension age or incapacitated, its value is to be disregarded indefinitely for UC purposes.

https://assets.publishing.service.gov.uk/media/65d32a810f4eb1ec90a98120/dmgch29.pdf, paragraph 29430.

poppy12345

kashmirix said:

If a property is occupied, in whole or in part, by a relative who is of pension age or incapacitated, its value is to be disregarded indefinitely for UC purposes.

https://assets.publishing.service.gov.uk/media/65d32a810f4eb1ec90a98120/dmgch29.pdf, paragraph 29430.

This is an old thread from May. The property is also in France and I don't think those rules apply in this case.