Universal credit: refusing legacy = deprivation of capital?

saajan_12

justwhat said:

FlorayG said:

I honestly can't see why you would want to anyway. You  get a gift of £20,000, you live on it until its gone, you then claim UC again. During the time you are living on your own money you have no obligations to provide endless proofs to the UC department and are free to live as you like plus you are saving money for the taxpayer

So you just fritter the 20k , When you could just claim UC and someone else could have the 20k.  More finacial sense the later.

Ridiculous. Or just fritter away the taxpayers money when you could spend your own money and someone else actually in need could have the UC money. 

justwhat

saajan_12 said:

justwhat said:

FlorayG said:

I honestly can't see why you would want to anyway. You  get a gift of £20,000, you live on it until its gone, you then claim UC again. During the time you are living on your own money you have no obligations to provide endless proofs to the UC department and are free to live as you like plus you are saving money for the taxpayer

So you just fritter the 20k , When you could just claim UC and someone else could have the 20k.  More finacial sense the later.

Ridiculous. Or just fritter away the taxpayers money when you could spend your own money and someone else actually in need could have the UC money. 

Very noble.  Think the OP has the answer to there original question.  No point in debating the rights and wrongs of the UC system or the claimants.

Grumpy_chap

justwhat said:

This is not clear cut.  

Deed of variation is not "always" DOC. 
"Someone else contesting the Will /Inheratance and loosing the 20k is not DOC" 

Its a grey area.

I think this is more clear cut than your post suggests and, hence, not a grey area.

There is nothing in the posts from the OP to suggest that anyone is contesting the Will.  The grounds on which a.n.other could successfully contest the Will are rather limited - most commonly related to the deceased failing to make adequate provision for a financial dependant.

In the absence of any indication that the Will is being contested, we have to assume that the OP meant what the OP said:

Foraminiferum said:

If a person refuses an amount of money, say £20k, which has been left to them in a will because they want to remain on Universal Credit, is this considered as a "deprivation of capital" for UC purposes?  Even though they have never received the money?

Thanks!

An individual choosing to decline the inheritance would be DoC.

peteuk

justwhat said:

Well Said .... i object to alot of things also. Unfortunatly thats life. (I object to people avoiding  40% tax  and peeps that defer large pensions, but thats all within the law)

I would say its frittering, if you are forced into using it for something you do not want to/have to use it on or is used needlesly.

Im trying to avoid 40% tax but will pay it the following year, and heres why.  HMRC want to apply 40% to everythin I earn, as my pension take up my tax free allowance.  I will owe £300.00 ish in tax because Im just the wrong side of the 40% threshold. This is due to additional pay thats not included in my basic salary. 

I would also ask do you see someone avoiding 40% tax by extra payments into a pension and someone doing the same to reduce their wage and so keeping a UC claim open?

justwhat

peteuk said:

justwhat said:

Well Said .... i object to alot of things also. Unfortunatly thats life. (I object to people avoiding  40% tax  and peeps that defer large pensions, but thats all within the law)

I would say its frittering, if you are forced into using it for something you do not want to/have to use it on or is used needlesly.

Im trying to avoid 40% tax but will pay it the following year, and heres why.  HMRC want to apply 40% to everythin I earn, as my pension take up my tax free allowance.  I will owe £300.00 ish in tax because Im just the wrong side of the 40% threshold. This is due to additional pay thats not included in my basic salary. 

I would also ask do you see someone avoiding 40% tax by extra payments into a pension and someone doing the same to reduce their wage and so keeping a UC claim open?

It's ALL the same. You play by the rules. There is no difference.  I do not vilify or openly judge either scenario. 

So play by the rules and batter in lol 

 

Grumpy_chap

peteuk said:

Im trying to avoid 40% tax but will pay it the following year, and heres why.  HMRC want to apply 40% to everythin I earn, as my pension take up my tax free allowance.  I will owe £300.00 ish in tax because Im just the wrong side of the 40% threshold. This is due to additional pay thats not included in my basic salary. 

Maybe I have read this incorrectly but, the way that would normally work for tax codes where pension takes the personal allowance (£12.5k) is that the tax code given to the employer would tax everything at 20% unless the 40% threshold (£50,270) has been exceeded by total of pension plus salary.  If that is not what is happening, HMRC may have incorrect data and the tax code may require amending.

andrewmp

They could buy a load of expensive stuff on buy now pay later. Get inheritance and then pay off the finance.

Newcad

andrewmp said:

They could buy a load of expensive stuff on buy now pay later. Get inheritance and then pay off the finance.

For Deprivation of Capital "Intention" is all important.

What you are suggesting there shows a clear 'intention to reduce capital in order to claim or increase benefits' and so would be DoC.

And just to be clear, in the context of possible DoC, "increase" also means "not have current entitlement reduced".

The suggestion is an intention to later reduce capital you don't have YET but KNOW that you will be getting soon.

In other words it's knowing about the possible DoC and planning to avoid it that shows intention, and so is DoC anyway.

Spoonie_Turtle

Newcad said:

andrewmp said:

They could buy a load of expensive stuff on buy now pay later. Get inheritance and then pay off the finance.

For Deprivation of Capital "Intention" is all important.

What you are suggesting there shows a clear 'intention to reduce capital in order to claim or increase benefits' and so would be DoC.

And just to be clear, in the context of possible DoC, "increase" also means "not have current entitlement reduced".

The suggestion is an intention to later reduce capital you don't have YET but KNOW that you will be getting soon.

In other words it's knowing about the possible DoC and planning to avoid it that shows intention, and so is DoC anyway.

But paying off debt is, per the regs, never DoC.  Which paying off the credit bill would be, no?

HillStreetBlues

Spoonie_Turtle said:

Newcad said:

andrewmp said:

They could buy a load of expensive stuff on buy now pay later. Get inheritance and then pay off the finance.

For Deprivation of Capital "Intention" is all important.

What you are suggesting there shows a clear 'intention to reduce capital in order to claim or increase benefits' and so would be DoC.

And just to be clear, in the context of possible DoC, "increase" also means "not have current entitlement reduced".

The suggestion is an intention to later reduce capital you don't have YET but KNOW that you will be getting soon.

In other words it's knowing about the possible DoC and planning to avoid it that shows intention, and so is DoC anyway.

But paying off debt is, per the regs, never DoC.  Which paying off the credit bill would be, no?

That is my view.
Intending DoC alone breaks no rules  A person might decide to use cash buy a £50k car to use up capital (the intent)  but it's only when that person buys the car that it could ever be DoC as needs both parts..
Buy something on credit can't be DoC as capital doesn't reduce, it's debt that increases, it doesn't matter if it's done to reduce future capital as it's only one part. 
Like you said paying off a debt is never DoC.