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Thread: Owning half a house and in receipt of IR ESA

  1. #1
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    Owning half a house and in receipt of IR ESA

    Hi, I really hope someone can help me with this as I have gone goggle ( or should that be Google) eyed through several weeks of trying to find answers on the Internet and with the CAB.

    I have inherited half of my late mother's house which is currently empty and awaiting refurbishment in order to rent it out. My brother owns the other half. I am disabled with a chronic back condition and currently in receipt of income related ESA (support group) and PIP. I also receive council tax benefit and housing benefit to which I make a small weekly contribution. I cannot go and live in my late mother's house as my disability means I cannot manage stairs.

    What I am trying to find out is the following:
    1. How does owning half a house impact on my ESA, housing benefit and council tax? I fully expect to lose benefits but I cannot ascertain how much and I need to work out if I am in fact going to be worse off from the rental income.
    2. Does my half share impact on my current benefits as I have no income from the house yet?

    Many thanks for any assistance/advice – I am losing sleep over this and cannot find any straight answers.

  2. #2
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    My understanding of your position (which may be wrong) is that as it's not your main home, the inherited property will be assessed as capital. The fact that it's 50% reduces the liability, but the 'potential' rental income is irrelevant; what is relevant, is the market value of your share.

    No doubt this will put you over the £16,000 limit for any means-tested benefits (ESA, HB and CTR), but will not effect your PIP; and you need to notify the DWP of your 'change in circumstances'.

    Curiously, what did the CAB advise?

  3. #3
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    Yes, once its sold - but not untill - it will be capital and may impact on your benefits. If you and your brother are NOT selling but will continue to own the property and recieve an income as landlords....whole other can of worms and that presumably wipe out your benefits, as you are then earning.

    If you recieve HB, are you renting your current home? Then why not invest your windfall in property for YOURSELF which IS suitable?

  4. #4
    Senior Member nukecad's Avatar
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    From what you say then inheriting this property will disqualify you from claiming any Income Related benefits.
    (It will not affect any benefits that are not Income Related - DLA, PIP, etc.)

    The capital value alone is almost certainly going to be more than £16K which is the limit above which you can not claim IR benefits.
    If you rent it out then your share of any rent will also be counted as income for tax and benefit purposes.

    As the house is not your main home then your share of it will be counted as capital.
    If the house is sold then your share of the proceeds will be counted as capital.
    If the house is rented out then your share of the rent will also be counted as income.

    It doesn't seem to apply here but:
    The house might not be counted as capital until the executors/administrators have distributed it to the heirs.
    As usual this gets complicated and depends mainly on whether you were specifically named in a will or not.
    This is set out in the Decision Makers Guide Vol 9,Ch 52, paragraphs 52169-52179
    https://www.gov.uk/government/upload...90/dmgch52.pdf

    If you are intending to sell the house then it's value as capital can also be disregarded for up to 26 weeks.
    (The above guide paragraph 52579).
    Of course once it is sold the the money from the sale becomes capital.
    I'm intelligent enough to know that I don't know everything.
    But I'm good at searching for, and finding, stuff.

  5. #5
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    Thanks for your reply. CAB weren't sure because they've never had a contact from someone who only owned half a house.

  6. #6
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    I can't buy anywhere because I can't sell my half share. I can't work due to my disability so I am going to be several hundred pounds worse off because my share of the rental income is going to be less than half of what I get on benefits. I can't get anything on my share of the capital because of lack of employment history.

  7. #7
    Senior Member nukecad's Avatar
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    I'm sure that there must be some way to sell your share.
    Your brother may have a right of first refusal but he can't stop you selling your share if you want to.
    He could mortgage the house to buy your half off you.

    I would talk to a solicitor about this, maybe the ones who are dealing with the inheritance?
    I'm intelligent enough to know that I don't know everything.
    But I'm good at searching for, and finding, stuff.

  8. #8
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    A mortgage is already going to have to be taken out to do necessary works to make the property rentable or saleable. My brother can't afford to buy me out and some advice I have received is that it's unlikely I will be able to sell half a house.

  9. #9
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    There is no solicitor as we can't afford one. I used to be a legal secretary so I've done all the paperwork.

  10. #10
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    https://www.gov.uk/government/upload...90/dmgch52.pdf

    You need to look at this guide provided previously.

    As you will read there are different aspects to this. Are you joint owners or tenants in common? Who has taken out the mortgage? This may alter the ownership share - have you discussed this with your brother?

    The very simplest thing is for you both to sell the property and slip the proceeds. if your brother does not agree then you may have to go to court to force a sale.

    It is very complicated so you should telephone the DWP and explain the situation.

    Can CAB not signpost you to somebody who could help you sort this out legally?

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