Deprivation of Capital

Ginger70

If I split a large inheritance I'm about to receive with other family members how long would it be considered deprivation of capital for benefit purposes?
I'm not claiming any benefits, don't intend to and hopefully will never have to - just wondering whether it would still have an effect if I needed a a little government help with rent after retirement in 20 years or so.

HillStreetBlues

Ginger70 said:

If I split a large inheritance I'm about to receive with other family members how long would it be considered deprivation of capital for benefit purposes?
I'm not claiming any benefits, don't intend to and hopefully will never have to - just wondering whether it would still have an effect if I needed a a little government help with rent after retirement in 20 years or so.

If you aren't on any income related benefits and in your current situation there is no reason to believe you will be then there is no DoC.

Newcad

If you are not spending/disposing of/gifting money with "the intention to claim or increase benefits" then it is not deprivation; and is of no interest whatsoever to the DWP.

There must be that "intention" for it to count as deprivation.

If you do spend or give savings/capital away and then claim benefits 'shortly' afterwards then the DWP will want to decide if you did do it only to be able to then claim benefits for yourself.

How long is 'shortly'? That will depend on individual circumstances - but a few months or maybe year, it's certainly not 20 years or so.

Ginger70

Thankyou both - very helpful.
Its the right thing to do but I just wanted to make sure I fully understood the implications.

Newcad

Good of you to share with other family members.

Be careful though if any of them are getting Income Related benefits, such as UC or Housing Benefit, because them getting a lump sum gift which takess their own savings over £6,000 would affect their IR benefits entitlement.

It wouldn't affect non-IR benefits such as PIP but it may be something you want to check before making such a gift.

Ginger70

Newcad said:

Good of you to share with other family members.

Be careful though if any of them are getting Income Related benefits, such as UC or Housing Benefit, because them getting a lump sum gift which takess their own savings over £6,000 could affect their IR benefits entitlement.

That's a good point too.
Luckily none of them are currently on benefits 

Keep_pedalling

If this large inheritance would put your estate into IHT territory, then you should consider doing this by a deed of variation to avoid your generosity falling under the 7 year rule. 

Brie

It might be deprivation if you need local authority assistance with care fees.  Is there any way you could get a variation on the will so it went to others directly and only a portion to you?

Ginger70

I am planning to do a deed of variance as advised by the solicitor dealing with probate. I'm just trying to ascertain if I've missed anything pertinent so any advice or thoughts people have are really welcome. That way I can discuss all the variables and decide the best option when I put things into place legally