Gifted money for a house on uc

chante101

Will this affect my single person's uc claim?
I'm in private rented accommodation, the rent is going up and even with uc I just can't afford to live after paying rent and bills.
I am going to be gifted £550,000 to purchase a house in my name from my mother.
I am on uc for rent, children and standard living, when I am gifted the money my financial situation will stay the same which isn't great. 
Will I still be entitled to the other elements of uc ?? Or will I no longer be entitled because of the gift money received.
I will have proof that all funds are going solely towards a house purchase.

I'm currently on maternity so do not work and I don't recieve smp or maternity allowance & I have a benefit cap applied to my claim since starting maternity (9 months ago). I don't plan going back untill my child is over 1yr. 

Yamor

If you can demonstrate that the money was given only for that purpose, and if it isn't used for the house purchase then you would have to give the money back, then you should be fine.

chante101

Thank you for your reply, I have tried to talking to citizens advice but I was told it would most likely stop my benefits altogether as uc could tell me to use that money to live off. This just didn't sound right so I took to the forum for some advice from real people. 

HillStreetBlues

The best way would I would have thought is using a Quistclose Trust
Funds are transferred for specific and exclusive purposes and can only be used as such. In your case the money could only be used to buy a house, if not buying a house the money has to be returned.

huckster

Best to find a house, make an offer and once accepted go through process with Solicitors to complete conveyancing work.  Don't have gifted money transferred to you or Solicitors account until nearer to exchange of contracts.  

If you have money gifted to you without any house purchase process in progress, then if UC picks up this change to your finances, questions will be asked. And probably your benefit would be closed. You could then reclaim later after property purchase, once any money had reduced to below £16k.

chante101

When do you suggest the best time to inform uc of this? Before or after any transfers and purchases ?

Newcad

UC are only interested in any change once it actually happens.

What might, or might not, happen in future doesn't interest them - because until it actually happens there's always a chance that it might not.

eg. Your mother might gift you money, but until it's actually in your account UC aren't interested, only once you have it in your account do they want/need to know about it.
If/when that happens they will just treat it as money that you could use to live on instead of claiming benefits, and if it's over £16k UC would stop..
Then you might use that money to buy a property, but until that actually happens you still have the money in your account and UC are not interested until that changes and you then have less than £16k in your account, at which time you can claim UC again.

So all in all the best thing would be to find a way to do the property purchase without the money hitting your account at all.
Could your mother not buy the property you want and then once it's hers gift that property to you to live in as your home?

sheramber

If your mother owns a house then buying a second one would incur  the  additional stamp duty charge.

A large amount paid into  your bank account and transferred out again could lead to problems with the bank freezing your account.

Can your mother transfer the money direct to the solicitor when it is due, rather than it coming into your bank account?

For money laundering purposes your mother will need to show the source of the money to the solicitor or estate agent.

TELLIT01

Once that money is in your account it will be taken into account for UC purposes, unless it enters and leaves the account in the period between UC payments.  The only situation I'm aware of where money for house purchase is ignored (discounted) for benefits purposes is where it comes from the sale of that persons property and the intention is for it to be used to purchase another property.  That is not the case here, so UC will cease as the amount takes capital to over £16k.

HillStreetBlues

TELLIT01 said:

Once that money is in your account it will be taken into account for UC purposes, unless it enters and leaves the account in the period between UC payments.  The only situation I'm aware of where money for house purchase is ignored (discounted) for benefits purposes is where it comes from the sale of that persons property and the intention is for it to be used to purchase another property.  That is not the case here, so UC will cease as the amount takes capital to over £16k.

A Quistclose Trust would avoid that.
With that trust once money was paid into OP's account they would be the legal owner of the money but not the beneficial owner, that would remain the mother. If property wasn't bought the mother could reclaim the money.
Once the Trust is fulfilled and the property purchased the OP would then become the legal & beneficial owner of the property.

Newcad

Unfortunately whilst a Quistclose Trust works from a legal point of view you need to think practically here.

The DWP/UC will regard the gifted money as savings/capital, they will act accordingly and stop UC.

A tribunal appeal on the grounds that it's a Quistclose Trust may well get that decision overturned - but appeals take time and in the meantime the UC has been stopped.

By the time you get to tribunal you have probably purchased the property anyway.