Inheritance, property purchase & "deprivation of capital" — Scope | Disability forum
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Inheritance, property purchase & "deprivation of capital"

66Mustang Community member Posts: 11,963 Disability Gamechanger

As I understand it, a means-tested benefit claimant is allowed to use inherited money to buy a single property to live in, and the purchase is not considered to be deprivation of capital.

My question…is there any limit to the size or type of property one can buy?

As a realistic example case:- if a 1 bedroom flat is considered sufficient for my needs, and I bought a 2 bedroom cottage with a garden, would this be seen as intentionally depriving myself of money?

Reason for asking - a relative is amending their will and we want to decide whether I am to be named as a beneficiary (the relative's preferred option) or whether my parents will get “my” share of the money (which they would use to buy the property for me).

Thank you.


  • poppy123456
    poppy123456 Community member Posts: 49,593 Disability Gamechanger
    You raise a very good point, i think if you buy a property that's got a lot more bedrooms than you need then DWP could ask questions. I'm not saying they will because only a decision maker can make that decision.

    I think buying a property that's got just 2 bedrooms isn't going to be a problem, especially for yourself as you have health conditions. If you need overnight care in the future (hopefully you won't of course) then at least you'll have a spare bedroom for them to sleep in. Although again, it will be down to a decision maker to make the final decision.

    The other issue i see is that if you do receive inheritance in the future then that money will not be disregarded until you buy a property, like it would be if you're selling the home you live in to buy another.

    Another issue that also comes to mind is that if your parents receive the money and buy you a house then there could be issues in the future if they ever need any care within 7 years of gifting you a property then there could be issues with deprivation of capital. Before going down this option then you should get some expert advice.
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • chiarieds
    chiarieds Community member Posts: 15,458 Disability Gamechanger
    I agree, you need some legal advice. If, heaven forbid, anything happened to your parents, if the value of their estate + any monies they'd gifted to you in the previous 7 years are over £325k, then you may become liable to pay inheritance tax (tho it goes on a decreasing sliding scale dependent on how many years have elapsed since their gift).
    I remember this as I teased my son, who was with me in the solicitors office at the time, that he'd have to look after me for 7 years, but the total of my estate + the monies I was gifting to himself & my daughter would fall under this amount. He fortunately still looks after me as he doesn't want to 'inherit' my cat!
  • 66Mustang
    66Mustang Community member Posts: 11,963 Disability Gamechanger
    Thank you Poppy and Chiarieds for the info and points raised.

    If anything happens to my parents, I believe I "inherit" 1/4 of their pensions. This obviously means I lose means-tested benefit income, depending on the 1/4 of the pension amount. Funnily enough this amount works out almost exactly the amount I am getting from means-tested benefits. Positively, this means any lump sum I inherit from my parents won't mean I "lose" income as the pensions are not means tested.

    That said you both raise some other very good points & we will have to look it all seriously.

    Thanks very much!
  • woodbine
    woodbine Community member Posts: 10,414 Disability Gamechanger
    Agreed legal advice would be a big help with this one.
    Seasons greetings to one and all 🎄🎅🏻🌲


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