Housing Benefit And Owning Property

[elle1979]

Hi I have rcently had to apply for housing benefit after years of working, my grandmother transferred the deeds to her house over to me 2 years ago with the understanding that she will live in it until she dies then my family and myself will move into it. I have been told by council, they will have to value the house, is that right? I do not make any money on it and can not move into it until my grandmother dies as she is 83 and just couldn't cope with my 3 kids running around, she wouldn't allow it. Can the value of this be taken into consideration?

[hc4361]

Yes, it can. It is an asset just like any other.

[Peter Pedant]

You need to take advice on the transfer

basically she has transferred it to you and kept 'an interest in possession' which means for IHT purposes ( which is why she may have done it) would NOT be effective
(but the person doing the transfer should have told you that)

please do not post why she transferred the house to you

[Islay]

Yes it can as you basically own a house and are letting someone live in it rent free but want to claim help with your own rent!

[ladybirder]

Yes, hc is right. It is an asset.

[Flonska]

Although the following link relates to Manchester City Council, you will see that any property bought or inherited which the applicant plans to live in as their home may be excluded from the calculation of assets - at least for 6 months - possibly longer?

http://www.manchester.gov.uk/info/500180/housing_benefit/4265/how_savings_investments_and_property_affect_your_housing_benefit_and_council_tax_support/4

Your Council may operate a similar policy. You might want to verify the nature and extent of this with your Council?

[ladybirder]

It is the Council that has told her Fionska.

[Islay]

I wonder what state Manchester's finances are in if they allow people that to claim housing benefit for one property whilst owning another and not making any rent on it!!

[wolf63]

Islay - I am sort-of sure that the same rules applied under Income Support. I know that is long gone but there is some logic to it.

[Flonska]

Thank you Ladybirder.

Having found the information but unaware of the rules of any other particular council, I know that policies may vary. I simply suggested that Elle might like to verify if and to what extent any exemption may be made regarding the asset in her particular circumstances.

[themas]

The Manchester thing is based on national regulations for Housing Benefit. But Elle can’t show that she is attempting to sell the house so maybe the 6 months wouldn’t apply. That would depend on a detailed reading of the precise wording of the regulation.

Nor can Elle get out of it by transferring the house back to her grandmother – to do so would be treated as deprivation of assets.

[atalanta]

You lose both ways. The council can say the property counts as yours, so qualifies as an asset, whether or not you make a gift of the rental value to your grandmother. Inheritance tax will still be levied when the lady dies, since the gift is a "gift with reservation" - unless the present inhabitant pays a market rent. According to inheritance tax rules, a "gift with reservation" is not a true gift, and full inheritance tax will be charged. I know this because my father tried to do exactly the same thing, even though I warned him it wouldn't work. And it didn't.
In fact, you may lose three times, since the council can claim ( if she has to go into care) that the lady gave you the property in order to avoid nursing home bills. If so, they can still count the house as her asset and claim back the fees ( or some of them, anyway)