Selling buy to let to pay debts and claiming Universal credit

TanKhan

Hi

Any advice will be appreciated.

I bought a 2nd home for £160k and let it out. Mortgage payments and costs are currently too much to keep up. 

House is currently valued by local estate agents at 200k. Want to sell it to clear mortgage and have maybe 5k spare hopefully. (Assuming it sells for 200k)

Will I be able to claim UC after selling and will I need to tell them I sold a house recentl?

I was eligible for UC in the past before I got the buy to let. I'm a full time carer as well as working just 4 hours a week as a driving instructor (caring takes up 40hours of my week)

Thanks in advance

marcia_

 Yes paying debts is allowed under universal credit rules. 

RAS

Remember to calculate the CGT liability as well. Shouldn't be much once the mortgage and selling costs are deducted. You have 60 days to pay it.

You might also want to read up to see if there are any other capital liabilities you can claim

ReadySteadyPop

TanKhan said:

Hi

Any advice will be appreciated.

I bought a 2nd home for £160k and let it out. Mortgage payments and costs are currently too much to keep up. 

House is currently valued by local estate agents at 200k. Want to sell it to clear mortgage and have maybe 5k spare hopefully. (Assuming it sells for 200k)

Will I be able to claim UC after selling and will I need to tell them I sold a house recentl?

I was eligible for UC in the past before I got the buy to let. I'm a full time carer as well as working just 4 hours a week as a driving instructor (caring takes up 40hours of my week)

Thanks in advance

Why don`t you increase the rent to cover your costs?

p00hsticks

RAS said:

Remember to calculate the CGT liability as well. Shouldn't be much once the mortgage and selling costs are deducted. You have 60 days to pay it.

I don't think the fact that the property is mortgaged makes any difference for CGT purposes - it's basically the selling price - the buying price - buying and selling costs and any improvements. 

The mortgage interest presumably was taken into account when calculating the rental profit declared for income tax purposes.     

TanKhan

ReadySteadyPop said:

TanKhan said:

Hi

Any advice will be appreciated.

I bought a 2nd home for £160k and let it out. Mortgage payments and costs are currently too much to keep up. 

House is currently valued by local estate agents at 200k. Want to sell it to clear mortgage and have maybe 5k spare hopefully. (Assuming it sells for 200k)

Will I be able to claim UC after selling and will I need to tell them I sold a house recentl?

I was eligible for UC in the past before I got the buy to let. I'm a full time carer as well as working just 4 hours a week as a driving instructor (caring takes up 40hours of my week)

Thanks in advance

Why don`t you increase the rent to cover your costs?

Rent is already at its highest. No one will pay more. Fact I have had to reduce my work hours to do caring has put a spanner in the works

peterhjohnson

TanKhan said:

Rent is already at its highest. No one will pay more. 

That's surprising. In many areas of the country, there is a desperate shortage of rented accommodation. Have you checked with a few letting agents?

theartfullodger

TanKhan said:

Hi

Any advice will be appreciated.

I bought a 2nd home for £160k and let it out. Mortgage payments and costs are currently too much to keep up. 

House is currently valued by local estate agents at 200k. Want to sell it to clear mortgage and have maybe 5k spare hopefully. (Assuming it sells for 200k)

Will I be able to claim UC after selling and will I need to tell them I sold a house recentl?

I was eligible for UC in the past before I got the buy to let. I'm a full time carer as well as working just 4 hours a week as a driving instructor (caring takes up 40hours of my week)

Thanks in advance

Do the authorities know you own it & have rental income (presumably declared to HMRC??).  With an assets of £200k +  & extra income from it v surprised you get UC - or am I ignorant again????

deannagone

theartfullodger The OP is not getting UC right now.  They are asking if they could once they have sold the property they aren't making any money from.  And what they say is that they will only have 5k remaining after it is sold and bills paid.  So yes, they should be able to claim UC once it is sold and paid for.

TanKhan

peterhjohnson said:

TanKhan said:

Rent is already at its highest. No one will pay more. 

That's surprising. In many areas of the country, there is a desperate shortage of rented accommodation. Have you checked with a few letting agents?

We set the rent quite high at the beginning and there wasn't much interest so reduced it slightly and found one excellent tenant who has paid each month for past 8 months without fail and never once asked or complained about anything. Even with £100 or £200 my financial situation will not get better as I'm unable to work for 20+ hours I used to do before due to the care I give. Carers allowance is around £83 a week and I was making around £500 a week before. Selling property is a way out and lots of stress relief. 

TanKhan

deannagone said:

theartfullodger The OP is not getting UC right now.  They are asking if they could once they have sold the property they aren't making any money from.  And what they say is that they will only have 5k remaining after it is sold and bills paid.  So yes, they should be able to claim UC once it is sold and paid for.

Exactly. I don't get any benefits at all. Self Assessment done each year showing rental income etc. 

So I want to ask if I sell and claim the UC again will I have to show my bank balance as proof I don't have the cash from the sale? Any other questions they will want answers to? I always found UC advisors bit strict