transfer deeds to son then rent and claim benefit uk?
April 20th, 2010 by admin
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8 Responses to “transfer deeds to son then rent and claim benefit uk?”
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you will have to prove that you are paying rent. pay the rent then get your son to give it back in cash!
benefit cheats will get caught
As I understand it you can. There must be a proper tenancy agreement in place and you will have to be able to show that you are paying the stated rent on a regular basis. If they suspect that you are not paying rent, or are being reimbursed in some way, they will stop the benefits for sure as it would be deemed a dishonest claim.
You cannot claim housing benefit if you are renting from a member of your family. They are as a member of your family meant to keep you for free if you are unable to afford to pay the rent. So your plan to deceive the council wouldn’t work. Why not just sell the house and find somewhere you can afford? I realise houses come with memories and attachment but you cannot afford to keep the house so you really don’t have a choice. People try to pull this every day, most fail, other may get past the council for a while but will soon be found out and you will be worse off. Paying rent as well as paying back the rent you claimed that you shouldn’t have.
Tricky. I am pretty certain you could do this, providing your son charges you a commercial rent. If he doesn’t, it would be classed as a ‘contrived tenancy’ and you would either be denied benefit – or even worse – be paid it and then have to pay it all back.
However. have you considered this from your sons point of view?
He would have to pay tax on the ‘profit’ from the rent, and (as it won’t be his residence) when he sells it, he will have to pay Capital Gains Tax. He’ll also have to comply with a myriad of landlord & tenant laws in order for it to be considered ‘legitimate’ by the authorities.
Owning an additional property might also compromise any ‘means tested’ benefits he might need to claim in the future.
You cannot claim housing benefit on a property that you have previously owned in the last five years, unless you can prove that you could not have remained in the property without relinquishing ownership. To prove this, you would have to provide proof of mortgage arrears,and pending repossession letters from your lender.
After the five years you will be able to claim housing benefit, but You will be asked to prove that you have been paying rent to your son in order to establish there is an actual genuine rental liability. Typically in a case such as the one you have mentioned I would request roof of rental payments for a period of 12 Months before I would allow such a claim. Other thing we would look at would be when you became liable for rent. For example if you transferred the property to your son, and did not start paying rent for 4 years, and then he started charging you, we would ask why this was the case. If it appears that your intention in creating such an arrangement was in order to claim housing benefit, you will be refused under regulation 9 of the housing benefit act.
Edit to add : Forgot to mention deprivation of capital. If you gift the house to your son, they can deem that you still hold the value of the capital. If this is more than £16,000 you will not qualify. As someone else mentioned you will be able to claim pension credit to top your income up. Pension service a
can be contacted on 0845 6060265. They will be able to advise you regarding your entitlement.
there are bound to be restrictions in place to prevent you from doing this – there certainly are when you sell your house back to one of these organisations that then rent it back to you .. and this is much the same thing.
Another thing you will seriously need to take into account is that if you sign the house over to your son, it is technically his property and an asset.. If he had money problems or got divorced etc etc etc, then ‘your’ house could be seen as an asset to be disposed of.
keep your house and claim pension credit if your government pension is too small to live on.You could help your finances by renting a room out to a lodger as you can get about £4k a year rent without paying any tax on that amount.Do not try and cheat the benefits agency as you will get caught and this could lead to a prison sentance.If you sign your house over to your son he could sell it to clear any debts he may get into at a future date as it will count as his asset.