2nd property occupied by dependent child

Grumpy_chap

SuseOrm said:

That’s very interesting so if I’ve had a for sale sign outside the door it wouldn’t have been an issue.

No, it is not quite as simple as that.  The property has to be genuinely being marketed for sale.  There is a time limit to the disregard (I think it is 6 months) but the time can be extended if appropriate by a DM. 

FlorayG said:

No, because they are basing the overpayment on the local market rent for the property

That is not correct.
The overpayment is based on a standard formula for having capital so the deduction is £4.25 for every £250 above £6k (up to £16k by which time the deduction is total).
https://www.gov.uk/guidance/universal-credit-money-savings-and-investments

It matters not whether the capital is generating an income or not, or whether the income generated is above or below the £4.25 per £250.  It is an assumed (and standard) assessment.
 

SuseOrm

Grumpy_chap said:

SuseOrm said:

That’s very interesting so if I’ve had a for sale sign outside the door it wouldn’t have been an issue.

No, it is not quite as simple as that.  The property has to be genuinely being marketed for sale.  There is a time limit to the disregard (I think it is 6 months) but the time can be extended if appropriate by a DM. 

FlorayG said:

No, because they are basing the overpayment on the local market rent for the property

That is not correct.
The overpayment is based on a standard formula for having capital so the deduction is £4.25 for every £250 above £6k (up to £16k by which time the deduction is total).
https://www.gov.uk/guidance/universal-credit-money-savings-and-investments

It matters not whether the capital is generating an income or not, or whether the income generated is above or below the £4.25 per £250.  It is an assumed (and standard) assessment.
 

That was what I thought so thank you for confirming and yes of course it is genuinely being marketed. Nobody would be happier than me to see it sold.  

HillStreetBlues

SuseOrm said:

If you were living there when you migrated then no because it wouldn't be a second property on migration day. If you were not living in the property on migration day then yes, the equity you have in the property would be disregarded for twelve months. 

I wasnt living there.  

Its being actively marketed and the price has been reduced,  it sold once and fell through in September.  

Sorry if I've missed the dates.
When did you first move out? what date did you migrate from Tax credits to UC?
Also how much is the house worth?  and how much do you still own on it?

SuseOrm

HillStreetBlues said:

SuseOrm said:

If you were living there when you migrated then no because it wouldn't be a second property on migration day. If you were not living in the property on migration day then yes, the equity you have in the property would be disregarded for twelve months. 

I wasnt living there.  

Its being actively marketed and the price has been reduced,  it sold once and fell through in September.  

Sorry if I've missed the dates.
When did you first move out? what date did you migrate from Tax credits to UC?

I moved out in Feb 2021. 

Migrated March 2022 
The dats they are questioning are 1/3/22 to 1/3/2024.  

They haven’t actually said anything as such other than we considered this capital. 

to which I’ve replied are you sure? On the basis that my daughter was living there.  But I will obviously highlight the migration period now

as I said there’s about £30,000 in equity. I will have to pay capital gains tax of six I believe and additionally £4000 to sell it to the Estate Agents and then say 1000 for Legal costs. 

HillStreetBlues

SuseOrm said:

HillStreetBlues said:

SuseOrm said:

If you were living there when you migrated then no because it wouldn't be a second property on migration day. If you were not living in the property on migration day then yes, the equity you have in the property would be disregarded for twelve months. 

I wasnt living there.  

Its being actively marketed and the price has been reduced,  it sold once and fell through in September.  

Sorry if I've missed the dates.
When did you first move out? what date did you migrate from Tax credits to UC?

I moved out in Feb 2021. 

Migrated March 2022 
The dats they are questioning are 1/3/22 to 1/3/2024.  

They haven’t actually said anything as such other than we considered this capital. 

to which I’ve replied are you sure? On the basis that my daughter was living there.  But I will obviously highlight the migration period now

as I said there’s about £30,000 in equity. I will have to pay capital gains tax of six I believe and additionally £4000 to sell it to the Estate Agents and then say 1000 for Legal costs. 

The actual price of the property matters, for example if the property is worth £300k and you have £270K to pay then for UC purpose there is no equity in that property.

SuseOrm

HillStreetBlues said:

SuseOrm said:

HillStreetBlues said:

SuseOrm said:

If you were living there when you migrated then no because it wouldn't be a second property on migration day. If you were not living in the property on migration day then yes, the equity you have in the property would be disregarded for twelve months. 

I wasnt living there.  

Its being actively marketed and the price has been reduced,  it sold once and fell through in September.  

Sorry if I've missed the dates.
When did you first move out? what date did you migrate from Tax credits to UC?

I moved out in Feb 2021. 

Migrated March 2022 
The dats they are questioning are 1/3/22 to 1/3/2024.  

They haven’t actually said anything as such other than we considered this capital. 

to which I’ve replied are you sure? On the basis that my daughter was living there.  But I will obviously highlight the migration period now

as I said there’s about £30,000 in equity. I will have to pay capital gains tax of six I believe and additionally £4000 to sell it to the Estate Agents and then say 1000 for Legal costs. 

The actual price of the property matters, for example if the property is worth £300k and you have £270K to pay then for UC purpose there is no equity in that property.

Ah,  well its buttons £75,000 in theory,  £42,446. Left 

HillStreetBlues

SuseOrm said:

HillStreetBlues said:

SuseOrm said:

HillStreetBlues said:

SuseOrm said:

If you were living there when you migrated then no because it wouldn't be a second property on migration day. If you were not living in the property on migration day then yes, the equity you have in the property would be disregarded for twelve months. 

I wasnt living there.  

Its being actively marketed and the price has been reduced,  it sold once and fell through in September.  

Sorry if I've missed the dates.
When did you first move out? what date did you migrate from Tax credits to UC?

I moved out in Feb 2021. 

Migrated March 2022 
The dats they are questioning are 1/3/22 to 1/3/2024.  

They haven’t actually said anything as such other than we considered this capital. 

to which I’ve replied are you sure? On the basis that my daughter was living there.  But I will obviously highlight the migration period now

as I said there’s about £30,000 in equity. I will have to pay capital gains tax of six I believe and additionally £4000 to sell it to the Estate Agents and then say 1000 for Legal costs. 

The actual price of the property matters, for example if the property is worth £300k and you have £270K to pay then for UC purpose there is no equity in that property.

Ah,  well its buttons £75,000 in theory,  £42,446. Left 

For UC there is about £25k in capital (equity).
What should have happened is that when migrating to UC in Mar 22 you should have declared the capital in the property. there would have been a deduction for the capital between £6-£16k (but your TP should have increased to factor that in) and the capital over £16k ignored for a year.
So if they are claiming you had the capital from the date of migration then you can them claim that the capital over £16k needs to be disregarded, that would take you up to Mar 23.

When did you put the house for sale?

Edit due to me wrongly thinking it was managed migration. 

SuseOrm

Would’ve been February 2023

SuseOrm

Do you mind if I ask how you’ve calculated the 25,000 please? 

HillStreetBlues

SuseOrm said:

Would’ve been February 2023

Then the capital should be ignored for 6 months from Feb 23 when you first took steps to dispose of the property, that should take you to Aug 23.
It can be disregarded for longer than 6 months if reasonable in the circumstances.
If you hadn't sold it by Aug 23 then you could claim that it reasonable  to extend the time-frame but for this you would need to show why it should be.

Edit due to me wrongly thinking it was managed migration.

Sorry OP please forget my comments