Property Inheritance and Benefits

jackhayes · 17 January 2020 at 10:31AM

My mother recently passed away and I will be inheriting her home which she owned outright.

I and my partner currently claim universal credit and Iam in receipt of pip, he also gets Carer's Allowance as my carer and I work part-time 16 hours/week. We live in a council rented property.

My mother's house is a fair distance away from us and I wish to sell it and buy something local which would be our one and only home. My question is this (and I know I have to tell the DWP about the inheritance) but can anyone tell me how the DWP treat the inherited property in the meantime until it is sold.

calcotti · 17 January 2020 at 11:30AM

This appears to apply.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/832009/admh2.pdf

Premises person is trying to sell
H2115 Where a person is trying to dispose of premises, they can be disregarded from the calculation of that person’s capital where they are taking reasonable steps to dispose of the premises and those steps have been commenced within the last 6 months.
1 UC Regs, Sch 10, para 6

Is it reasonable to disregard for longer
H2116 The DM may decide to disregard the premises for a longer period where for example the person has done all they can to sell the premises and the asking price is no more than the premises are worth.

Marmiter · 17 January 2020 at 11:40AM

What stage is probate at? Who is the executor?

You *may* also be able to hold some capital as you intend to use it to purchase a property. So, could the executor sell the property and you apply for a mortgage pending the distribution of the estate?

jackhayes · 17 January 2020 at 1:08PM

Marmiter wrote: »

What stage is probate at? Who is the executor?

You *may* also be able to hold some capital as you intend to use it to purchase a property. So, could the executor sell the property and you apply for a mortgage pending the distribution of the estate?

I'm the executor of her will but the property was held in trust for me (set up over fifty years ago when I was a child) as soon as I have the property in my name it will be put up for sale (houses sell pretty quickly in that area). I don't really want the hassle of mortgages and already have property in mind and will vacate the council property immediately.

xylophone · 17 January 2020 at 3:31PM

I will be inheriting her home which she owned outright.

but the property was held in trust for me (set up over fifty years ago when I was a child)

So she didn't own it outright? The legal ownership lay with the Trustees and the beneficial ownership with you?

Are you saying that the property was left to you fifty years ago but your mother had an interest in possession as Life tenant?

TELLIT01 · 17 January 2020 at 5:08PM

calcotti wrote: »

This appears to apply.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/832009/admh2.pdf
Premises person is trying to sell
H2115 Where a person is trying to dispose of premises, they can be disregarded from the calculation of that person’s capital where they are taking reasonable steps to dispose of the premises and those steps have been commenced within the last 6 months.
1 UC Regs, Sch 10, para 6

Is it reasonable to disregard for longer
H2116 The DM may decide to disregard the premises for a longer period where for example the person has done all they can to sell the premises and the asking price is no more than the premises are worth.

I'm aware that there are difference to the rules under UC to those applying to legacy benefits. With ESA / IS the disregard only applied when selling the family home and using the money for the purchase of another house. It didn't apply to proceeds of the sale of inherited property.

MovingForwards · 17 January 2020 at 5:26PM

Why are you transferring the property into your name then selling it? Why not just sell the property and use the proceeds to buy your own home?

I'm assuming you are a first time buyer and the benefit of that is not to be sniffed at!

Rubyroobs · 17 January 2020 at 6:10PM

So did you own the property all the time ? If so did you declare it when you made your Uc claim? Surely it would count as capital?

calcotti · 17 January 2020 at 7:08PM

TELLIT01 wrote: »

I'm aware that there are difference to the rules under UC to those applying to legacy benefits. With ESA / IS the disregard only applied when selling the family home and using the money for the purchase of another house. It didn't apply to proceeds of the sale of inherited property.

To be honest that's what I expected the rules to say but as far as I can tell from the document i referenced the paragraphs quoted are not conditioned by being a home formerly occupied as the family home. However it's why i slightly cautiously said the paragraphs 'appeared' to apply just in case I have misread it. Compare what I quoted above with

Premises ceased to be occupied
H2114 Where a person has ceased to occupy premises as their home following estrangement from their former partner, those premises can be disregarded from the calculation of that person’s capital where
1. the person has ceased to occupy those premises within the past 6 months or
2. the person’s former partner is a lone parent and occupies the premises as their home1.

Here it is clear that this paragraph refers to premises formerly occupied as the home.

calcotti · 17 January 2020 at 7:10PM

Rubyroobs wrote: »

So did you own the property all the time ? If so did you declare it when you made your Uc claim? Surely it would count as capital?

I think not necessarily if held in trust.

Alice_Holt · 17 January 2020 at 9:12PM

TELLIT01 wrote: »

I'm aware that there are difference to the rules under UC to those applying to legacy benefits. With ESA / IS the disregard only applied when selling the family home and using the money for the purchase of another house. It didn't apply to proceeds of the sale of inherited property.

Just to clarify.
ESA Sch 9 para 2 of the ESA regs section 6 provides:
"6. Any premises where the claimant is taking reasonable steps to dispose of those premises, for a period of 26 weeks from the date on which the claimant first took such steps, or such longer period as is reasonable in the circumstances to enable the claimant to dispose of those premises."

Note the reference to "Any premises", in other sections it specifically refers to "premises which the claimant intends to occupy as the home", or "premises formerly occupied by the claimant ". So, I think it safe to say that capital held in an inherited house which an ESA claimant is taking steps to sell can be disregarded for 26 weeks.
http://www.legislation.gov.uk/uksi/2008/794/schedule/9/made

This seems to me, to be the ESA equivalent of para H2115 and the UC Regs, Sch 10, para 6 which calcotti posted.

Of course, (as you say) once the property is sold the proceeds are not disregarded. This would indeed be different to the disregard allowed to proceeds from a sale of a family home where the intention is to use it for the purchase of another property intended for occupation as the family home.

Property Inheritance and Benefits

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