Capital allowances if you live now rented home but want to buy a small property within an inheritanc

Swoman

I’ve been trying to distil this down, and wherever I look, I don’t seem to get a straight answer. It always seems to end up with wright a letter toDWP and the DM is in a good mood,

sadly, my experience of decision makers is somewhat tainted by the shocking treatment. My late wife got at their hands suffering MS and motor neurons. So forgive me if I wouldn’t trust them as far as I could throw their rulebook.

As my title said I’m looking at buying a small property in France. I’m about to inherit approximately £80,000 from my late mother’s estate. It was . I’m about to inherit approximately £80,000 from my late mothers estate. It was her wish that I bought in France as her mother was born in Bordeaux. I have just been diagnosed with a spinal tumour and that properly means the end of my working life. I’m 62. I have a 60% war pension and have worked suits the age of 16. I have two teenage children still living with me and a severely disabled 26 year-old stepson. Quite clearly £80,000 isn’t even going to be sufficient even for shared ownership of a four bedroom house. So there’s no way I can buy in the UK. Now reading the regulations from what I can see rental property is not a primary address. And according to The universal credit regulations schedule 10, 1.1/2. I am only allowed to have one primary address as an allowance against the capital.

I suppose the question is if I’m only allowed one property which is it all I will own. And a rental property is not a primary address and I don’t claim any capital allowance for that. How can the purchasing in France not be allowed as a capital allowance. now I fully appreciate I probably shouldn’t be entitled to the housing component of my universal credit as I have somewhere to live. But surely they can’t have it both ways disallow the capital allowance and remove the housing benefit. I simply cannot get a straight answer from anybody. Nobody seems to know what the rules are help!

Grumpy_chap

Swoman said:

I’ve been trying to distil this down, and wherever I look, I don’t seem to get a straight answer. It always seems to end up with wright a letter toDWP and the DM is in a good mood,

sadly, my experience of decision makers is somewhat tainted by the shocking treatment. My late wife got at their hands suffering MS and motor neurons. So forgive me if I wouldn’t trust them as far as I could throw their rulebook.

As my title said I’m looking at buying a small property in France. I’m about to inherit approximately £80,000 from my late mother’s estate. It was . I’m about to inherit approximately £80,000 from my late mothers estate. It was her wish that I bought in France as her mother was born in Bordeaux. I have just been diagnosed with a spinal tumour and that properly means the end of my working life. I’m 62. I have a 60% war pension and have worked suits the age of 16. I have two teenage children still living with me and a severely disabled 26 year-old stepson. Quite clearly £80,000 isn’t even going to be sufficient even for shared ownership of a four bedroom house. So there’s no way I can buy in the UK. Now reading the regulations from what I can see rental property is not a primary address. And according to The universal credit regulations schedule 10, 1.1/2. I am only allowed to have one primary address as an allowance against the capital.

I suppose the question is if I’m only allowed one property which is it all I will own. And a rental property is not a primary address and I don’t claim any capital allowance for that. How can the purchasing in France not be allowed as a capital allowance. now I fully appreciate I probably shouldn’t be entitled to the housing component of my universal credit as I have somewhere to live. But surely they can’t have it both ways disallow the capital allowance and remove the housing benefit. I simply cannot get a straight answer from anybody. Nobody seems to know what the rules are help!

AIUI, if you have a home that you don't live in, that will be treated as capital (as will the inheritance money in the bank once it is received) and it will end any open UC claim.

If you move to live in the property you will purchase in France, then that becomes your primary address and disregarded for capital.  However, AIUI, living in France will make you ineligible for UC.

Have you considered the costs of running the property in France which will be in addition to the costs of your primary (rented) home in UK?  

rosewalk

It is only the value of the property that you live in that is disregarded by Universal Credit. If you own a property that you don't live in then this is treated as capital. There are some instances in which the value of a property that you do not live in is disregarded but I don't think that this would apply in your case. So if you live in a property that you own the value of this ignored. If you live in a rented property then you will receive the Housing Element of Universal Credit. There is no entitlement in UC to own a property. 

Muttleythefrog

As above.... I can't see reason why the property you will own and intend not to live in could be disregarded... so should be considered capital.

The inheritance and amount does present some issues... as you indicate... makes ineligible for means tested benefits but isn't sufficient to realistically buy accommodation your family unit needs. I'm struggling for advice as a result since getting a mortgage etc may be effectively ruled out by not able to work... so shared ownership may be only option if intending to remain in UK... you can get some pretty low percentages for that but obviously where you are and local situation will determine options. From the benefits system POV..  it effectively is saying you should live on your (excess >£16k) savings (in this case from inheritance) but if those savings were invested in accommodation for you to live then they'd be disregarded as it'd be senseless to expect people to make themselves homeless to get benefits or persist... in this case they wouldn't likely be disregarded as you'd be not living in the accommodation and instead have an asset making money or (after acquisition) that you could sell to live on the proceeds of.

One last thing I'd say... owning and renting a property will likely come with quite a bit of maintenance/administrative issues and expenditure... the idea of it being somewhere you cannot easily get to adds to the complexity. It sounds like your life is very complicated and difficult at the moment and unlikely to suddenly get simpler... so really do think twice about buying a property abroad... you cannot live your life based on the sentimental desires of people no longer with us and it would I think be unreasonable for anyone to request or expect such unless you've previously agreed to it. It might be a 'head over heart' time.

Swoman

First thing apologies for the typos. I’ve just had two months in hospital on a lot of happy pills. They are gradually washing out of my system but my typing or more precisely my hand eye coordination is still shocking.

Thank you all for your comments, reinforced what I understood to be the case. However, I perhaps didn’t make it clear as to my intent. I am applying for a four year Visa. Being a historian engaged in a number of research/publishing projects connected to the Great War. as well as running a micro enterprise in the UK which I intend to transfer to France. The suggestion has been made That the property would then be a business asset. (I am not intending Airbnb) but a gallery and workplace. Even working within 180 day rule that’s still 38 weeks self-employment per year. If I don’t do any work in the UK. Fully understand should I sell the business then I would be liable. And again except the loss of the housing element. 

Any more thoughts now?

Grumpy_chap

Swoman said:

First thing apologies for the typos. I’ve just had two months in hospital on a lot of happy pills. They are gradually washing out of my system but my typing or more precisely my hand eye coordination is still shocking.

Thank you all for your comments, reinforced what I understood to be the case. However, I perhaps didn’t make it clear as to my intent. I am applying for a four year Visa. Being a historian engaged in a number of research/publishing projects connected to the Great War. as well as running a micro enterprise in the UK which I intend to transfer to France. The suggestion has been made That the property would then be a business asset. (I am not intending Airbnb) but a gallery and workplace. Even working within 180 day rule that’s still 38 weeks self-employment per year. If I don’t do any work in the UK. Fully understand should I sell the business then I would be liable. And again except the loss of the housing element. 

Any more thoughts now?

If you are going to be self-employed (running a micro-enterprise which you will relocate to France, and the gallery in France), then UC will look through the veil of the business to the income and outgoings of the business.  The MIF (minimum income floor) may apply.  There is a start up period where more discretion is applied.

EXCEPT - if the business and you are in France, then UC will stop as you will no longer be UK resident after one month abroad UC will stop.

If the plan is to keep the rented property in UK plus have the property in France plus the business in France plus meet all the costs of travel back and forth and running two properties, I suspect you would be generating sufficient income that the need for UC is negated.  Train / Plane fares soon add up.  Or you won't generate sufficient income that negates the need for UC and will struggle to make finances work.

Spoonie_Turtle

If you are out of the UK for a month consecutively you do not qualify for UC.  You must be habitually resident in the UK and physically present, with the exception of being 'temporarily absent' (which = up to one calendar month) in order to claim UC.

Grumpy_chap said:

Swoman said:

First thing apologies for the typos. I’ve just had two months in hospital on a lot of happy pills. They are gradually washing out of my system but my typing or more precisely my hand eye coordination is still shocking.

Thank you all for your comments, reinforced what I understood to be the case. However, I perhaps didn’t make it clear as to my intent. I am applying for a four year Visa. Being a historian engaged in a number of research/publishing projects connected to the Great War. as well as running a micro enterprise in the UK which I intend to transfer to France. The suggestion has been made That the property would then be a business asset. (I am not intending Airbnb) but a gallery and workplace. Even working within 180 day rule that’s still 38 weeks self-employment per year. If I don’t do any work in the UK. Fully understand should I sell the business then I would be liable. And again except the loss of the housing element. 

Any more thoughts now?

If you are going to be self-employed (running a micro-enterprise which you will relocate to France, and the gallery in France), then UC will look through the veil of the business to the income and outgoings of the business.  The MIF (minimum income floor) may apply.  There is a start up period where more discretion is applied.

Not if they have LCW/RA or are classed as a carer for their son.  In those situations they cannot be deemed to be gainfully self-employed, but they would of course have to report income and expenditure for the business.

(I don't know if there would be any UC problems with having a business elsewhere even if OP made sure not to be out of the UK for too long at any one time.  Although frequent travel back and forth with their disability might not be physically feasible even if they could manage to afford it.)

Grumpy_chap

Spoonie_Turtle said:

Not if they have LCW/RA or are classed as a carer for their son. 

Thanks - I had ignored the OP's health and step-son's disability.
It would be worthwhile for the OP to understand what the impact of having this inheritance capital will be on their UC award as some components may not be means-tested.  The impact of having the capital may be less severe.

Also, in considering this potential move or partial move to France, the OP should consider access to healthcare provision for them plus their step-son.
Is the proposal that the two teenage children also decamp to France?  How does that fit with their education?

kaMelo

Grumpy_chap said:

Spoonie_Turtle said:

Not if they have LCW/RA or are classed as a carer for their son. 

Thanks - I had ignored the OP's health and step-son's disability.
It would be worthwhile for the OP to understand what the impact of having this inheritance capital will be on their UC award as some components may not be means-tested.  The impact of having the capital may be less severe.

Also, in considering this potential move or partial move to France, the OP should consider access to healthcare provision for them plus their step-son.
Is the proposal that the two teenage children also decamp to France?  How does that fit with their education?

Just for clarity, UC is entirely a means tested benefit, there are no non means tested elements.
If the OP holds capital is in excess of £16,000, unless it's subject to a disregard (which an inheritance is not one of them) then UC will end.

Grumpy_chap

kaMelo said:

Grumpy_chap said:

Spoonie_Turtle said:

Not if they have LCW/RA or are classed as a carer for their son. 

Thanks - I had ignored the OP's health and step-son's disability.
It would be worthwhile for the OP to understand what the impact of having this inheritance capital will be on their UC award as some components may not be means-tested.  The impact of having the capital may be less severe.

Also, in considering this potential move or partial move to France, the OP should consider access to healthcare provision for them plus their step-son.
Is the proposal that the two teenage children also decamp to France?  How does that fit with their education?

Just for clarity, UC is entirely a means tested benefit, there are no non means tested elements.
If the OP holds capital is in excess of £16,000, unless it's subject to a disregard (which an inheritance is not one of them) then UC will end.

Sorry if my terminology was imprecise.  I was referring to the possibility that the OP receives benefits related to their health condition and / or disabled step-son's support. 

Spoonie_Turtle

Grumpy_chap said:

kaMelo said:

Grumpy_chap said:

Spoonie_Turtle said:

Not if they have LCW/RA or are classed as a carer for their son. 

Thanks - I had ignored the OP's health and step-son's disability.
It would be worthwhile for the OP to understand what the impact of having this inheritance capital will be on their UC award as some components may not be means-tested.  The impact of having the capital may be less severe.

Also, in considering this potential move or partial move to France, the OP should consider access to healthcare provision for them plus their step-son.
Is the proposal that the two teenage children also decamp to France?  How does that fit with their education?

Just for clarity, UC is entirely a means tested benefit, there are no non means tested elements.
If the OP holds capital is in excess of £16,000, unless it's subject to a disregard (which an inheritance is not one of them) then UC will end.

Sorry if my terminology was imprecise.  I was referring to the possibility that the OP receives benefits related to their health condition and / or disabled step-son's support. 

They would be entirely separate benefits (presumably PIP, Carers Allowance), not part of UC.