Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
May I clarify with you please, do you propose to consider renting your property to your daughter (whereby she receives housing benefit ideally) only after you have left the property to move to sheltered accomodation or would you propose to share the property for any period with your daughter?
The idea is that we move out and NEVER share the property with my daughter.
It is possible to rent from family members and still receive housing benefit but there are very strict rules about when this can happen. If I may elaborate.
One of the rules is that if you share a home with family you cannot receive housing benefit. This is an absolute, hence my above question to you. It is therefore important that you do not share the property with your daughter if she is to be eligible for housing benefit in order to live there. I note you do not propose to which is ideal.
That is good news. Now for the other restrictions, if any.
You must ensure that you treat your daughter as any other commercial tenant from the point of view of the rental arrangements. The requirements are that the rental agreement must be on normal commercial term and you would therefore require a tenancy agreement and you must collect the rent from her monthly as you would with a commercial tenant.
If you forgive her rent, for example letting her off rent if she is short of money or if she is not working for example, whilst you may wish to do this as a parent, this can be used as evidence by the council to show what they call a "contrived tenancy" - namely a situation set up by you and your daughter to take advantage of the housing benefit system. Therefore it is very important to treat the tenancy as a normal commercial tenancy and give her no special treatment for this reason.
You can still talk to each other though! It is just a matter of keeping business and pleasure separate so to speak.
If you can fulful all of those requirements and she can afford the market rent for the property with the benefit of housing benefit providing you have first moved out the proposal is an eligible one for housing benefit.
That is exactly what I would propose. I emphasize again that I am not wanting to make money out of the DSS, rather I seek a reasonable level of rent, in line with what my daughter currently pays, rather than invest the surplus money after selling and failing my daughter. I just hope that there is a way to do this, legally. If so, all I need are the guidelines of how to go about WHEN the time arrives.
To summarise the above requirements:
1) The rent must be on a commercial non discounted basis. You must charge a market rent.2) You cannot share occupation with your daughter;3) You must treat your daughter as any other commercial tenant putting in place a tenancy agreement and ensuring rent is collected each month
If you can fulfil these requirements then your daughter will be eligible to claim housing benefit for the rental.
Thanks. Could you please send any further help and advice via an email at your leisure as it is getting late
A pleasure. If I can assist any further as the situation develops please do not hesitate to revert to me
Thanks for what you have provided so far, reassurance!
Do come back to me if you have any follow questions.
I have, at the moment just one supplementary point that I wish to raise.
Let us suppose that my daughter would to be accepted by the DSS to rent our bungalow. I wonder if the best way to achieve would be to place the transaction into the hands of a letting agent to minimise my input?
Thanks once again.
One final? query, if I may ask?
A few months ago, in preparation for my demise, I incorporated my son and eldest daughter onto the title deeds of my bungalow. This was NOT a ploy to avoid payment of inheritance tax, rather preparation for my demise, whenever that happens.
Any income derived from the letting to my youngest daughter is NOT intended to go the partners on the deeds, rather solely to me OR perhaps two thirds into trust for the partners. It is likely that once my youngest daughter becomes a tenant, she is unlikely to leave. In a way, if the youngest eventually becomes the beneficial owner, I am seeking to recompense her brother and sister for their loss.
Could such a set-up be regarded as acceptable, for it would help to avoid their paying tax on the income which they will receive until after my death.
I have read through what I have written, and it does sort of make some sense!
Thanks, once again. I will get in touch with an accountant who may be better able to advise on the financial implications for my two children.