Gifted deposit for house whilst on universal credit

Hmaz_2

I am currently in receipt of universal credit and have been since seperating from my husband a few years ago.  I live with our three children in the former marital home which is in the process of being sold.  Once sold I plan to use my share of the equity to house myself and the children. 

I plan to buy a shared ownership property as I don't earn enough to get a decent mortgage and buy normally.  My mum has very kindly offered to gift me some money so that I have a decent deposit to put down (I then wouldn't need a mortgage and would buy my share with cash).

How would the gifted deposit work with universal credit? My mum would not give me the money to live on it is purely to use to buy a house so would universal credit stop or would they be ok with my mum gifting this as a house deposit? I was hoping it could be transferred straight to the solicitor dealing with the purchase so wouldn't ever go into my bank account. 

I'm not really sure on the rules with this sort of thing so hoped someone might have been in a similar situation and could advise.  Thank you

rosewalk

It would be better if the money were transferred to the solicitor so that it doesn't appear in your bank account. 

Hmaz_2

rosewalk said:

It would be better if the money were transferred to the solicitor so that it doesn't appear in your bank account. 

That's what I was hoping would be ok.  It would be over £16k so would stop my claim if it went into my bank account but hopefully it would be ok if it went direct to the solicitor

Muttleythefrog

I think you'll be okay whichever way.. but the solicitor may well advise the money first hit your account... procedurally you may find variance out there... including whether to consider mother a client for anti money laundering purposes etc.  As long as you then forward to solicitor before end same assessment period I'd think you should be okay (I have in mind realistically it can all be done in a day). Perhaps get a letter constructed by mother stating the gifted money is purely to assist purchasing of a home to live in (which is not considered capital) - something that may be obvious if you're holding funds from them in a client account at solicitors but less obvious if in your bank account.

I plan to do similar..no mortgage etc... just a straight purchase with gifted money from mother.

Spoonie_Turtle

The important thing will be for it to go into and back out of your account within the same assessment period.  That way you'll be okay with UC and your claim won't have to close.  (And sensible to let them know what happened, after it's done - so that if it's flagged later that you had over the threshold on your account, they already know about it and where it went.)

Hmaz_2

Spoonie_Turtle said:

The important thing will be for it to go into and back out of your account within the same assessment period.  That way you'll be okay with UC and your claim won't have to close.  (And sensible to let them know what happened, after it's done - so that if it's flagged later that you had over the threshold on your account, they already know about it and where it went.)

I had assumed if it was an amount over £16k it would immediately close my claim even if it was only in my account for a day

NedS

Is there any reason it could not go into and out of your account on the same day, so the balance isn't held in your account at the end of the working day? That would go a long way towards alleviating any potential issues.

Spoonie_Turtle

Hmaz_2 said:

Spoonie_Turtle said:

The important thing will be for it to go into and back out of your account within the same assessment period.  That way you'll be okay with UC and your claim won't have to close.  (And sensible to let them know what happened, after it's done - so that if it's flagged later that you had over the threshold on your account, they already know about it and where it went.)

I had assumed if it was an amount over £16k it would immediately close my claim even if it was only in my account for a day

Explanation for the above, but note below:  So technically for the period of time in which you have capital over £16,000 you are not entitled to UC.  However once your capital goes back down below £16k you are then entitled again and can reopen your claim. 

If you reported it on the day you receive the capital they will close your claim - but then if you pay the deposit, become eligible again and reopen your claim within the same assessment period, overall it will have zero effect.  This is because UC is assessed based on your circumstances on the last day of your assessment period so you'd still get the same UC payment at the same time, as if you'd never closed your claim at all.

**I defer to NedS's experience though, recommending that it's better to do it within a day.**

Hmaz_2

Spoonie_Turtle said:

Hmaz_2 said:

Spoonie_Turtle said:

The important thing will be for it to go into and back out of your account within the same assessment period.  That way you'll be okay with UC and your claim won't have to close.  (And sensible to let them know what happened, after it's done - so that if it's flagged later that you had over the threshold on your account, they already know about it and where it went.)

I had assumed if it was an amount over £16k it would immediately close my claim even if it was only in my account for a day

Explanation for the above, but note below:  So technically for the period of time in which you have capital over £16,000 you are not entitled to UC.  However once your capital goes back down below £16k you are then entitled again and can reopen your claim. 

If you reported it on the day you receive the capital they will close your claim - but then if you pay the deposit, become eligible again and reopen your claim within the same assessment period, overall it will have zero effect.  This is because UC is assessed based on your circumstances on the last day of your assessment period so you'd still get the same UC payment at the same time, as if you'd never closed your claim at all.

**I defer to NedS's experience though, recommending that it's better to do it within a day.**

Thank you.  Could they potentially say it is deprivation of capital though to have a large sum of money and put it in to a house if I also have a large sum from the sale of my own? My worry was they'd say I should buy something smaller/cheaper area using smaller deposit and live off some of the money from the sale of my former marital home instead.  

sammyjammy

The money laundering check will involve your mother whether it goes straight to the solicitor from her or via your account.  Just check with solicitor that she can pay the money direct (no reason why she shouldn't).

Assume the equity from your current house will transfer from house to house and will never come to you as capital?

If no money enters your account for either transaction there is nothing to tell UC except report a change of address.

Hope you enjoy your new home.

NedS

Hmaz_2 said:

Spoonie_Turtle said:

Hmaz_2 said:

Spoonie_Turtle said:

The important thing will be for it to go into and back out of your account within the same assessment period.  That way you'll be okay with UC and your claim won't have to close.  (And sensible to let them know what happened, after it's done - so that if it's flagged later that you had over the threshold on your account, they already know about it and where it went.)

I had assumed if it was an amount over £16k it would immediately close my claim even if it was only in my account for a day

Explanation for the above, but note below:  So technically for the period of time in which you have capital over £16,000 you are not entitled to UC.  However once your capital goes back down below £16k you are then entitled again and can reopen your claim. 

If you reported it on the day you receive the capital they will close your claim - but then if you pay the deposit, become eligible again and reopen your claim within the same assessment period, overall it will have zero effect.  This is because UC is assessed based on your circumstances on the last day of your assessment period so you'd still get the same UC payment at the same time, as if you'd never closed your claim at all.

**I defer to NedS's experience though, recommending that it's better to do it within a day.**

Thank you.  Could they potentially say it is deprivation of capital though to have a large sum of money and put it in to a house if I also have a large sum from the sale of my own? My worry was they'd say I should buy something smaller/cheaper area using smaller deposit and live off some of the money from the sale of my former marital home instead.  

No, it can never be deprivation of capital to spend it on a house that you intend to live in as your main residence. The point here is that once you have the capital in your account, the claim for UC should close. Once the capital has left your account, you can then reclaim - but it is a new claim.

If you can avoid having the capital pass through your account as @sammyjammy suggests, that would be preferable. If it must go through your account, I would try to limit the amount of time it is there (straight in and out again) so you do not need to declare that capital to DWP.