2nd Home but Nephew in it renovating

theoretica

'Giving' your nephew a portion of the sales price could affect your benefits.  Paying him for work done should not - but would count as his income for tax purposes.

born_again

Grumpy_chap said:

Spoonie_Turtle said:

In its current condition, how much would the property be worth?  If there's a small enough amount of equity in it that your total capital/savings are under £16,000 then you'd still be eligible to claim (for now, until it increases in value beyond that threshold from further work your nephew does on it). 

The reason 'having a second property' is seem as something that automatically excludes people from claiming is usually those second properties are livable and worth much more than £16k.

Just to clarify on the second property and the value that is used for eligibility for UC.  Is it purely the equity that is taken into account (value less mortgage) or is it the whole value of the property and the mortgage ignored?

If it is only the equity that is considered capital (which would make a lot of sense), it would be treating the capital within a property differently from capital in cash.  AIUI, if an individual had, say, £20k in the bank and debts of £15k, that individual would be assessed as having greater than £16k capital.  Obviously, that individual could repay the debts and then have the £5k capital, but while the individual has both, the eligibility for means-tested benefits is impacted.

In the OP's case, the quicker they can get the property marketed for sale, the better, as that will allow the disregard to apply.

• How long will it take the Nephew to complete the house renovation so that it can be sold?
• Is the cost of those renovations likely to be recouped through increased sale value compared to simply selling now?
• Can the property be sold in the current state?
• Where will the Nephew live once the property is sold?

Obviously, once the property is sold, the OP will have the capital in a readily accessible form.  If this is greater than £16k, there will be no entitlement to means-tested benefits.  The OP can repay any debt and that will not be deprivation of capital.  If the OP gifts an amount to the Nephew, a DM may well consider that is deprivation of capital.

With the various medical conditions noted, has the OP investigated whether her or her husband are eligible for any benefits which might not be means-tested?

 we have a 2nd property that was left to us in a will,

Given that statement in OP, then it would be fair to take it that there is no mortgage.