Working Tax Credits V Settlement Situation

Can anybody assist with this question that is worrying me.....
Single mum with two children, have been separated from estranged husband for a year and a half,getting near the stage of selling the former family home which he currently occupies.My share of the equity from the family home should give me a nice lump sum which I am looking to put down as a deposit on a property for myself and the children. I work part time so tax credits is a necessity for me and the children.I will have to get a mortgage of my own in order to top up the equity deposit, but I am worried that because the equity is a large lump sum way over 16,000 but sitting under 100k that working tax credits will treat this as savings? ...or the fact that you have come into some money so payments might stop and they make you live on the equity, which seems totally pointless to me when you are trying to better yourself by putting your own roof over your children's head.Am I worrying about nothing? Can anybody advise, would be so grateful for guidance on this matter,this situation must happen quite a lot upon separation and re housing issues. Thanking you all.

Hello nextphase,
My understanding is that the lump sum you receive is capital. Capital is not taken into consideration in calculating tax credits. You would only need to declare income (interest earned) from the capital and not the capital itself.

You could always give the tax credits helpline a call for confirmation.

Bubblegum is absolutely correct.

Tax credits are only interested in the interest on the capital, not the capital itself.

Should you need to rent before you buy however it would affect any claim for housing benefit. There is a disregard you can apply for though if you can show the proceeds are from the house sale and will be used for a future property. This disregard is time limited - six months I think.

For tax credits you only have to declare the interest you have earned from capital.

You can deduct £300 from the amount earned and anything earned from money in an ISA is exempt.

I believe the rules for Universal credit which is slowly replacing WTC and CTC does have a capital cap of £16000

There may be a disregard as stated by worldsbiggestmug under UC but this will have to checked.

Ahh, yes Universal credit! I'm dreading the day I am put on that!

Hello Bubblegum 11,

Just wanted to say thank you for replying to my post,it is very much appreciated & I thank you for your time.What a minefield this all is ! Kind regards nextphase.