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Inheritance and council tax

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My niece who has 2 teenagers under 18 inherited approximately £110,000 a few months ago on the death of her husband.

It was in the form of an insurance policy and the condition was that the money should be used to purchase a home for her & the girls.

I don't think any money went through her account or if it did, it went straight towards payment for their home.

 

After the death of her husband, she was unemployed for several weeks and now has a job at a supermarket for 19 hours per week on minimum wages so earning about £130 per week.

She has no savings and has applied for council tax benefit, but they do not want to give her the benefit stating that due to inheriting a large sum of money recently.

 

Her council tax is approximately £200 per month.

She has the heating switched off at the moment as the boiler has gone and BGAS are trying to sell her another one.

I suspect that a local person will probably be able to fix the boiler within a hour or two but another thread for another day.

She also has council tax arrears of £1700 and paying the bailiff £200 a month.

Unfortunately she let the bailiff into her home, but that is another story and will be posted on another thread once I have further details.

 

Although she inherited the money, it was on condition of buying a home, so can she be penalised for something over which she had no control?

The insurance was set up many years ago before the husband was made aware that he had a terminal condition

although I do suspect the will was probably altered within the last year or two.

 

Does she have any grounds for claiming a council tax benefit?

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She may have a case, possibly. This is one of those instances where I'd recommend a consultation with a lawyer experienced in benefits matters, or at the very least a good welfare rights adviser.

 

Presumably she's been denied CTB on the basis of deprivation of capital rules based on her inheritance. However, she can't be deemed to have deprived herself of capital if she was not the beneficial owner of said capital. This can be complex to determine, which is why I suggest professional advice.


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She may have a case, possibly. This is one of those instances where I'd recommend a consultation with a lawyer experienced in benefits matters, or at the very least a good welfare rights adviser.

 

Presumably she's been denied CTB on the basis of deprivation of capital rules based on her inheritance. However, she can't be deemed to have deprived herself of capital if she was not the beneficial owner of said capital. This can be complex to determine, which is why I suggest professional advice.

Thanks Antone. She is in a lot of financial difficulty at present as they never applied for council tax benefit when the husband was alive, but not employed. I found out that they never applied because they did not think they were entitled to the benefit even though he was in hospital most of the time for the past year and her working as a carer. Possible that they may have just been over the threshold, but supporting to children and a husband on her income was impossible. He never applied for ESA as far as I am aware as too ill. They had no savings.

I have mentioned the above because she is really scared of any more debt and trying to get her to approach a benefits solicitor will be difficult. Bad enough that Swift Credit bailiffs have loaded the liability orders with huge charges. Seems she owed £1700 on council tax arrears and has paid swift £1300, but they state she still owes them £1200! Once I have those details I will post a seperate thread.

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Did she use the inheritance to purchase a home as instructed?

What has happened with that property if they are not currently living in it? Is it rented out or empty?

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so your niece received 110k for purchase of new property

 

was there anything in writing clearly stating the money could only be used for this?

was all the money used for purchase of new property?

what is the situation with her previous property?

was it owned or rented?

is she living in new property? or previous property?


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She is living in the property as she cannot afford to rent.

 

The money for the property was from an insurance payout and the will instructed that the money was to be used to purchase the property.

 

Previous property was rented.

 

There was an additional amount which covered the funeral and some expenses.

 

All money was pay outs from insurance policies as prior to his death

 

they were totally broke with no savings as he had not worked in a long time and she was a part time carer plus looking after her spouse.

 

The kids used to go to MIL for supper on many nights.

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So she is now living in the property that was purchased with the inheritance,

is there any ourstanding mortgage, or was there any money left over following the purchase?

 

I would imagine that if there is something legally binding from the solicitors that the inheritance was to purchase a stable family home

and the money was used for that purpose that the decision could be looked ata again

 

however if it was purely on the say so of her late spouse there could still be an issue of she had an amount of money

and then chose to spend it to purchase a home

as that is treated differently to if someone sells a home and re-invests the money into another property.

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based upon the information, you have posted, she may be entitled to some council tax benefit, i can understand why there is some confusion over the capital

 

under the council tax benefit legislation: -

 

  1. if a person has capital of more than £16k, they are not entitled to CTB
  2. if they dispose of capital to gain benefit, they are treated as if they still have it (notional capital)
  3. however from what you have said, the reason for disposing of the capital was to ensure a roof over the family's head and not to gain CTB, in such a situation, i do not think it should be treated as notional capital

P.S. the only income you have mentioned is earnings of £130, does she not get any other money, e.g. child benefit, child tax credit, working tax credit, etc


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Thanks for the above. She does get some other "normal" benefits, but cannot afford the council tax which is about £200 a month. She already has inherited council tax arrears from when her husband was alive. but too ill to work. Basically the last few months of his life and after the funeral while she got her life back together. He died in March this year.

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a friend of mine lost her husband a few years back and she was able to claim bereavement allowance and was also able to work part time and claim tax credits, maybe worth her looking into.

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She needs to immediately appeal the Notional Capital decision to deny CTB & if that is unsuccessful take it to Tribunal.

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