Universal credits and inheritance
kittenk8
Posts: 2 Newbie
My mum passed away 23rd November. I have been told that when the probate is done i will own half her house so my universal credits will be stopped as its classed as capital. Me and my brother will be selling the house as neither of us can buy the other out. This would mean i would have a good amount of money in the bank. I was going to buy myself the house i live in now (council property) And extend it or a 3 bedroom house (mines 2).
The problem is that i would lose all universal credits by receiving the money and its not enough to live on for a long time so buying the house would be better for me and my two children.
Im a single parent with two kids and no one now to help with them so getting a full time job isn't possible as most places want weekend workers.
I dont want to waste the money. What should i do? (Id normal ask my mum for help but i cant now 😢)
The problem is that i would lose all universal credits by receiving the money and its not enough to live on for a long time so buying the house would be better for me and my two children.
Im a single parent with two kids and no one now to help with them so getting a full time job isn't possible as most places want weekend workers.
I dont want to waste the money. What should i do? (Id normal ask my mum for help but i cant now 😢)
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Comments
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There are things you can spend the money on and those you can't, these are known as deprivation of capital i.e depriving yourself of capital in order to claim or continuing to claim means tested benefits, you don't say how much you expect to inherit, but I would suggest you investigate the deprivation of capital rules further.
Of course some would say you should use the money to live on until it runs out.0 -
"It's not enough to live on for a long time" - in that case I wouldn't worry too much? Once you've spent it reasonably (whatever that may be) and have under £16000 left, you can reapply for UC anyway
I'm sorry for your loss and I wish you didn't have to worry about what to do with the money at what is already a very difficult time.0 -
I am sorry to hear about your mom during what is a difficult time for you and your children.
This may or may not happen, but in your emotional state : do not lend anyone any of this money.
This may be something that you are not thinking about, but I would hate for family/friends to take advantage of your inheritance, with the promise to repay, knowing full well that they will not.0 -
After the house sale there would be about 100k that would just be enough to purchase my house and do an extension. Im never going to have that kind of money again so it would be beneficial to buy my house. I will look up what u said though.0
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If you can buy your council house at a discount, I would do so. Council Houses tend to be built to reasonable standard. I would get a structural survey done on your house before you make an offer to buy it, as there may be some faults that mean it would not be a good buy.
Extending the property will need you to engage a builder which needs some care, and there will be quite a bit of disruption while the work is done, but this is probably the best way to get a three bedroom property with your inheritance.
Get some quotes for the extension work now, so that when the inheritance lands you can work out how much it will cost to buy your current property with any discount and extend it vs. just buying a new three bedroom property with the money. If the difference is small, you might consider that it will be less disruptive to move locally than have the building work going on for months and it will free up a council house for someone that needs it.The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.0 -
My mum passed away 23rd November. I have been told that when the probate is done i will own half her house so my universal credits will be stopped as its classed as capital. Me and my brother will be selling the house as neither of us can buy the other out.
Note that between the period when you and your brother legally own the house, and selling the house, there is a period of 26 weeks when the capital tied up in the house can be disregarded.
"Where a person is trying to dispose of premises, they
can be disregarded from the calculation of capital
where they are taking reasonable steps to dispose of
the premises and those steps started within the last 6
months.
It may be reasonable 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."
http://data.parliament.uk/DepositedPapers/Files/DEP2019-0465/Capital_disregards_v11.0.pdfAlice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.0 -
If you want to extend to make 3 bedrooms have you considered a loft conversion which should be less expensive than an extension?0
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Buying the property would be an eminently sensible course for the OP as there'd be no risk of falling foul of the deprivation of capital rules. Depending on the age and gender of her children and the cost, though, having an extension built might be problematic re those same rules.0
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As soon as you own the second property you'd need to declare as having over 16k capital to UC. However, if you say you intend to sell this property and provide proof a decision maker would then look at this evidence and the house wouldn't be taken into account as capital for six months while you attempt to sell it. As long as you prove you've made all attempts to sell it within those six months when the decision maker reviews the decision they can extend the six months if not sold at that point.
Then when you have the money after having sold the house you'd need to declare this capital. If at this point you say you intend to use the money to buy a property and provide proof of this the decision maker can then give you another six months to buy the property. For this time again the money wouldn't be taken into account.
So you can still receive UC while this process is going on as long as you log and provide evidence of the process. The hiccups might be the extension, but as long as you can prove a need for this such as a child growing older and needing another bedroom for this as an example you should still be allowed to spend capital on this.
And of course if after buying the house and doing the extension (if extension is okayed) you have capital left over 6k you'd need to declare this. It's also likely at the end of the process you would need to provide bank statements etc just to show all the capital has now gone and you have less than 6k capital left.Amount left to pay on house = 64,400.
Savings buffer = 1,028.75 of 2415.
Next large expense = 159 of 483.0 -
Another thing to consider is always have a paper trail ( receipts or invoices paid) of all the money. As much as a pain to have to pay VAT to tradesman do it rather than a cash job. Always get a minimum of 2 written quotes for any work done. Sorry for your loss of your Mum and I am sure she would be very happy having a daughter with a sensible head on her shoulders."Man invented language to satisfy his deep need to complain."
''Money can't buy you happiness but it does bring you a more pleasant form of misery.''0
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