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My wife and I are retired and on benefits We must sell our

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My wife and I are retired and on benefits
We must sell our house in next 18 months due to interest only mortgage of £190000
Going on recent sales in our road it would appear we would be left with sum of approx £100000
I aasume a lot of our dss benefits would be lost
We have been thinging of gifting the £100000 to our children knowing of 7 year rules of our death it would go back to the deceased estate but would be under £325000 limit
Is this possible without annoying dss
Submitted: 8 months ago.
Category: Tax
Expert:  bigduckontax replied 8 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Only savings up to 10K are ignored in benefit calculations so with 100K swilling around yours will definitely be affected.

If you give it away you create a Potentially Exempt Transfer (PET) in your Inheritance Tax (IHT) affairs. PETs run off at a taper and in the event of decease within 7 years are added back to the estate for IHT. PETs are the first to suffer IHT and if the estate cannot meet the tax the liability cascades down to the beneficiary for immediate payment. However, as IHT does not kick in until 325K this will not be a problem. IHT is handled by HMRC.

If you do not have the 100K when claiming from DSS there is nothing to declare.

I do hope that you have found my reply of assistance.

Customer: replied 8 months ago.
Thank you for reply and as I expected
Just a concearn that the dss will question the legality of such a move and stop benefits
regards Anthony
Expert:  bigduckontax replied 8 months ago.

That department would have to prove that you had the capital sum at the time of claim.

Please be so kind as to rate me before you leave the Just Answer site.

Customer: replied 8 months ago.
when house is sold on day one funds would be distributed from our solicitor to our 3 children,so in effect would we ever had the funds?
Expert:  bigduckontax replied 8 months ago.

Effectively, yes.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3612
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 8 months ago.

Thank you for your support.

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