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Forum Home  →  Discussion  →  Housing costs  →  Thread

Inherited Property and Housing Benefit

Sal
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Greenwich Welfare Rights Service

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I have a client who inherited a property by will, but the property hasn’t been transferred into her name yet.

She is letting the inherited property to tenants. She lives in separate rented accommodation, for which she was receiving housing benefit. Would the inherited property count as capital for housing benefit purposes?

Paul_Treloar_AgeUK
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Information and advice resources - Age UK

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Yes, the value of the other house does count as capital for the HB award. Can’t see that any disregards apply and therefore the current market value (‘surrender value’) of the property, less 10% if there would be a cost involved in selling the property.

Daphne
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Although it wouldn’t count until it has been transferred to her after probate I don’t think?

Paul_Treloar_AgeUK
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Daphne - 03 September 2020 02:59 PM

Although it wouldn’t count until it has been transferred to her after probate I don’t think?

Yes. Also surely raises some questions about how she’s letting it out to tenants at the moment though?

Elliot Kent
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Offhand, I would have thought it would be possible for client as executor or administrator to let out the property on behalf of the estate. But this cuts both ways - if the estate has not been distributed then the funds generated by letting are for the benefit of the estate so the client should not be spending the money until the distribution.

Sal
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Hiya,

Thanks for all the responses. I have a further question.

In CPAG Chapter 22, it states: “A future interest in most kinds of property is ignored. A ‘future interest’ is one which will only revert to you, or become yours for the first time, when some future event occurs - eg, where someone else has a life interest in a fund and you are only entitled to it after that person has died. However, this does not include a freehold or leasehold interest in property which has been let by you to tenants.”

As the property has not gone through probate yet, is the inherited property a future interest in property? if so, does the fact that she’s been renting it out mean that it counts as capital now?

The client is an executor of the will and has said that the rental income has been directed towards paying off a charge secured against the property.

Thanks

HB Anorak
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I don’t know the full facts of the case, but where the claimant is an executor as well as a beneficiary and where the will is simple and not subject to any complications, delay in administering the estate will not delay the capital counting for benefit purposes.  Have a look at Wilkinson with similar-ish facts.

This isn’t a “future interest” in the way the Regs mean.  It is a beneficial interest right now.