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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 26003
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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My daughter currently lives in a property where has done so

Customer Question

My daughter currently lives in a property where has done so for over 20 years. She has been in receipt of housing benefit and other allowances because her three children all have major health problems, mainly epilepsy.
For several reasons her present home is not suitable and she has her name down on three separate council lists, Dover, Canterbury and Swale. However, it is very unlikely that a four bedroom property will become available within the next 20 years, if then.
My wife and I currently live in a 3 bedroom bungalow with a converted loft which be suitable for my daughter and her family. I am nearing 80 years of age, and we have been thinking of downsizing into sheltered accommodation in the village where we live, if and when one becomes available.
I realise that under normal circumstances that housing allowance is NOT payable to owners who are relatives. I could just sell the property when we find a suitable alternative and benefit from a large cash surplus. However, this would not alleviate the problems that my daughter faces.
I am not seeking to make vast sums of money at the expense of the DSS but rather a resolution of my daughter's problems. At present she is in hospital, just three miles from my home and twelve miles from her home. where her daughter was taken yesterday after a massive seizure.
It would be helpful if you could point me in the right direction to help my daughter.
Yours sincerely,
Selwyn Lewis
Email:[email protected]
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.

Joshua :

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.

Joshua :

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?

Customer:

The idea is that we move out and NEVER share the property with my daughter.

Joshua :

Thank you.

Joshua :

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.

Customer:

Please continue.

Joshua :

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.

Customer:

That is good news. Now for the other restrictions, if any.

Joshua :

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.

Joshua :

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.

Joshua :

You can still talk to each other though! It is just a matter of keeping business and pleasure separate so to speak.

Joshua :

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.

Customer:

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.

Joshua :

To summarise the above requirements:

Joshua :

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

Joshua :

If you can fulfil these requirements then your daughter will be eligible to claim housing benefit for the rental.

Customer:

Thanks. Could you please send any further help and advice via an email at your leisure as it is getting late

Joshua :

A pleasure. If I can assist any further as the situation develops please do not hesitate to revert to me

Customer:

Thanks for what you have provided so far, reassurance!

Joshua :

Do come back to me if you have any follow questions.

Joshua and other Law Specialists are ready to help you
Customer: replied 3 years ago.

Hello again,


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?


Yours sincerely,


Selwyn Lewis

Expert:  Joshua replied 3 years ago.
A lettings agent will not materially add anything other than costs. Providing you have a tenancy agreement on commercial terms that is all that is required.
Customer: replied 3 years ago.

Hello,


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!


Yours sincerely,


Selwyn Lewis


 

Expert:  Joshua replied 3 years ago.
my apologies for the delay in reverting to you. It is not clear to me on what basis you have received advice to include your son and daughter on your title deeds. This can be a bad idea as can have adverse consequences for capital gains tax unless a life interest trust has been provided for. This is a wide area and would really need to be the subject of a new question.

However, insofar as it relates to the above, but does he propose to have as a tenant would have no right to remain in the property beyond the end of her tenancy which can of course be renewed from time to time as required. In order to ensure that you treat your respective children as you would wish under the terms of your will, it would be important to ensure that an appropriate trust has been provided for in relation to the property and that the trust works in tandem with your well that you may have made.

I would be very happy to discuss this further with you as a new question. if you wish to proceed along these lines, please do ask for me int he first line of any new question and I will be delighted to assist further.

Kind regards
Customer: replied 3 years ago.

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.


Yours sincerely,


Selwyn Lewis

Expert:  Joshua replied 3 years ago.
Best wishes