... i have a colleague (honestly !) who is assisting a cl. with an appeal against a decision that they had capital in excess of £16.000.00 and the situation is thus :

the cl. took out a £10.000.00 loan from a bank and £10.000.00 loans from friends and family to buy a plot of land, and they didn't declare this to jcp. subsequently the plot of land was discovered by jcp and the cl. benefit ceased. because of this h.b / c.t.b also ceased and cl. was evicted from there home. this led to them living in a mobile home on the plot of land and subsequently successfully reclaiming benefit because the capital was disregarded due to living on the land ...

... is this making sense, bear with me please ?

however, cl. still owes the £20.000.00 and my colleague is wondering if they could argue that the £20.000.00 equity in the plot of land can be disregareded when they weren't living there because due to owing the £20.000.00 to the bank and family and friends the plot of land wasn't in fact owned by them, it was owned by the lenders, and therefore they didn't have £20.000.00 capital.

da daaaaaa ... any thoughts on this very greatly appreciated and as a footnote my colleague also thinks that the amount of any mortgage on a second home is disregarded when a persons capital is assessed for means tested benefits ?

well, my head hurts and i need to eat so sugary aspirations all and ...

pete

You can only disregard debts if theya re secured on the property by a mortgage - this then reduces the market value because the mortgage must be paid off when the property is sold an you only get the net equity.
And on the second point your colleague is right for exactly the same reasons.
If you want authority it's reg 50 of the Income Support regualtions and equivalents in the other MTBs. They use the fancy word "encumbrance" not mortgage as it is possible for there to be a debt secured on other assets such as shares. Not common though. And what we call a mortgage is actually a "charge by way of legal mortgage" in lawyer speak. Bills of sale are an increasingly nasty way of doing the same thing, and a lot more like what used to be called a mortgage.

as ever ariadne2, thankyou, and have a very groovy weekend whatever you're doin' !!!

pete

Have you considred whether the plot of land was still worth £20k for the whole time between the date of claim and the date that yor client moved onto it? If it was worth less than 16K following the credit crunch that will bring him into entitlement albeit wihout some tarriff income.

I have had some success using this argument, the value of land (or anything else) is the amount a willing buyer would give for it for a quick sale. (R (SB) 6/84) One case I had concerned some land that was given a value without taking into account the non existent access, contamination of the ground by asbestos (it had been repair garage for many years and the dusty residue of the cleaning out of innumerable brake drums was in the ground everywhere) and its status in a conservation area.. A valuation was done for a quick sale and this esatblished that it had little or no value other than to be bought in the hope that one day it might be worth enough as a building plot to make it worth someone's while to solve all the other problems.

... added to which, even if the value was still 20,000 there would be a 10% disregard against that because of costs of sale. Then you start the notional diminution of capital calculation and Bob's your mother's brother's civil partner.