ESA/Capital Gains Tax

door123

If a person is getting ESA contribution based. And sells a second property which is liable for capital gains tax what affects will it have.

Will the profit from selling the property affect ESA?

When capital gains tax is paid will this affect ESA?

Thanks

Grumpy_chap

door123 said:

If a person is getting ESA contribution based. And sells a second property which is liable for capital gains tax what affects will it have.

Will the profit from selling the property affect ESA?

When capital gains tax is paid will this affect ESA?

Thanks

This ( https://www.gov.uk/employment-support-allowance/what-youll-get ) states that household savings in excess of £6k may affect what you will get.

However, in benefits terms, your savings are not changing by selling the second property.  The savings are merely being converted from being in the property to being in the bank.

Have you previously declared the property?

Newcad

I can't see any reason why it would havr any affect on CB ESA at all.

All you are doing is changing one form of capital (property) to another form of capital (money in the bank).

Both are capital and capital does not affect CB ESA.

You should of course tell ESA that you now longer own the second property and now have so much (after CHT) in the bank, but that's just keeping their records up to date.

rosewalk

If you are only receiving CB ESA there is no point in reporting a change in the amount of capital that you have or the form that you are holding this in. Also it is extremely difficult to contact ESA by phone, over the last couple of weeks there have been very long waits to get through to them. I understand that this may be due to the number of IRESA claimants moving to UC calling with queries, 

door123

rosewalk said:

If you are only receiving CB ESA there is no point in reporting a change in the amount of capital that you have or the form that you are holding this in. Also it is extremely difficult to contact ESA by phone, over the last couple of weeks there have been very long waits to get through to them. I understand that this may be due to the number of IRESA claimants moving to UC calling with queries, 

Yes I am only receiving contribution based ESA. 

door123

Grumpy_chap said:

door123 said:

If a person is getting ESA contribution based. And sells a second property which is liable for capital gains tax what affects will it have.

Will the profit from selling the property affect ESA?

When capital gains tax is paid will this affect ESA?

Thanks

This ( https://www.gov.uk/employment-support-allowance/what-youll-get ) states that household savings in excess of £6k may affect what you will get.

However, in benefits terms, your savings are not changing by selling the second property.  The savings are merely being converted from being in the property to being in the bank.

Have you previously declared the property?

No I have not declared the property as I'm on contribution based ESA only. 

Is ESA contribution based a taxable benefit? Will that have any affect?

door123

Newcad said:

I can't see any reason why it would havr any affect on CB ESA at all.

All you are doing is changing one form of capital (property) to another form of capital (money in the bank).

Both are capital and capital does not affect CB ESA.

You should of course tell ESA that you now longer own the second property and now have so much (after CHT) in the bank, but that's just keeping their records up to date.

I never told ESA that I have a second property as all I receive is just the ESA which is based on my NI contributions. I have also found the below through  a Google search.

Your savings and capital do not affect your eligibility for or the amount of now style esa you receive. New style ESA is contribution based benefit meaning it is primarily based on your national insurance contributions not your income or savings.

I am still a bit concerned about ESA when I pay capital gains tax as its tax what will ESA see it as I will explain below.

 When I started receiving ESA I was still employed but not working after a period of time in 2023 my employer dismissed me on capability grounds. I had some annual leave entitlement left and my employer paid me for this it was only £450. But my employer reported this to HMRC as income. I don't know how DWP got this information but they posted me a letter saying that I did not report to them that I am working for my employer and claiming ESA which is allowable but it needs to be reported.

ESA DWP was under the impression that I was working. I went through a lot of stress and had to send them a letter explaining what happened alongside my payslip which clearly stated for the period that it was annual leave. I then got further letter from ESa no further action.

Thanks

HillStreetBlues

Con ESA is taxable as income, CGT is totally separate and won't be reported as income.

Newcad

If ESA were not aware of the property then fair enough they don't need to kow if you sell it.

The situation withan employer reporting wages to HMRC for Income Tax purposes was one thing, because working over 16 hours a week or earning more than 16x Minimum wage would disquallify you from getting ESA.

But Capital Gains Tax is not tax for income from work.
It's tax for gains of Capital, which is irrelevant to CB ESA.