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ISA account held by client but contains his mother’s money not his
Any success on proving money in an ISA account is not clients. He states his mother put money in ISA account in his name. He has been refused ESA IR. He has no income at the moment
You’re not going to be able to ‘prove’ it in the absolute sense/to the beyond reasonable doubt standard because the ISA is in his name and he will have signed the documents. But that doesn’t mean he is the actual beneficial owner and that he won’t be able to satisfy a tribunal of the same on the balance of probabilities….
I would be looking to evidence things like;
1. The transaction or transactions involved in the purchase - hopefully they will show the purchase funds coming from an account held by the mother.
2. If there are any withdrawls from the ISA those being paid into an account held by the mother (or paid into your client’s account and then transferred immediately and in full to the mother).
3. A coherent and credible explanation of why, if the funds are the mother’s, they are held in the son’s name?
I am a bit rusty on the mechanics of ISAs - but if I remember correctly they are tax free investments and there was/is a limit on the number and value that any one person can hold. One possible (and likely) scenario is that in having the son hold the funds the mother was trying to circumvent these rules and trying to avoid paying tax - potentially a criminal offence. And potentially a criminal offence for your client also if he knew why he was being asked to take out the ISA. If something like that is the case, a tribunal can still be won (credibility of client’s - and ideally mother’s - evidence will be very important) because the legality or otherwise of the multiple ISA/tax dodging issue is not relevant to the client’s benefit entitlement. But any tribunal that knows its business should issue a formal caution (i.e. as if being interviewed under caution) if it takes evidence that indicates possible criminal behaviour - that is not to say that the tribunal would definitely inform the authorities, but the evidence will make its way into the record of proceedings and any statement of reasons. And if there’s a PO, they will hear it anyway.
Actually, that’s only talking about what happens at appeal - by the sounds of it, the MR stage still has to be gone through. There will be an issue at tribunal if a case that could/should have been made at MR stage was not advanced until the appeal hearing…....
Of course, I could be jumping the gun and there could be a more innocent explanation - I can’t think of an obvious one though.
I have a client who has held money in her account for her mother for several years, client gets income support but money is help in trust for the mother’s funeral costs and dwp have questioned it but accepted the explanation and ignore it after we put the explanation to them in writing
Hi
Thanks for your reply but there is no trust in this case
does not have to be a formal trust, implied trust will do. ther emust be a reason for the money being in your client account and if its not an illicit one you may have grounds to have it disregarded.
Indeed - there has to be some form of trust, most likely an express but unwritten trust. If not, the ISA actually does belong to your client and is his capital.
Yes can be unwritten, in the case I did , it was entirely between my client and her mother and no form of written evidence at all, in fact the dwp accepted the money was ‘in trust’ based on what we wrote without the need for any corroborative evidence from the mother, your sounds a little les simple but if it is not his money then you should persist with a challenge as long as the implications are not adverse,
If the mother in your case has gifted it to your client thats another story altogether, a letter from the mother should resolve it one way or the other
[ Edited: 6 Apr 2017 at 03:42 pm by SocSec ]I haven’t looked at a case like this recently, but last time I did it was not possible to open an ISA in someone else’s name and the person opening the ISA has to sign a declaration that the money in the account belongs to them.
That is true. It was what I was hinting at in my first post where I said that there were potentially criminal offences if the mother persuaded the son to put his name to the ISA in order to avoid tax and to circumvent the rules regarding the number of ISAs an individual can hold - and if the son made a consciously false declaration of ownership in order to assist her in this.
But none of that would necessarily prevent the mother from being the true beneficial owner of the funds and thus from the ISA being disregarded as the son’s capital.
The answer seems to be that a challenge is needed and time is slipping by so maybe soon rather than later !!!
That is true. It was what I was hinting at in my first post where I said that there were potentially criminal offences if the mother persuaded the son to put his name to the ISA in order to avoid tax and to circumvent the rules regarding the number of ISAs an individual can hold - and if the son made a consciously false declaration of ownership in order to assist her in this.
But none of that would necessarily prevent the mother from being the true beneficial owner of the funds and thus from the ISA being disregarded as the son’s capital.
Last time I did one of these a tribunal judge took great delight in throwing pages of caselaw back at me showing that an ISA is one of the rare financial tools where the name of the account holder makes them the legal owner and beneficial ownership doesn’t enter into it. It’ll take some digging out but I am led to believe that the position has not changed. DWP have tended to confuse this by fudging it more often but the fact remains that money laundering legislation has only hardended that position. You open an ISA and put someone elses money in it then you are taking a huge risk benefits wise.
more information on how this isa came about and what the claimant actually knew is needed , not really much more to add until the full facts are known ,we shooting arrows in the dark at this time, if the case goes to a hearing with such little info it will either fail or be adjourned with a stiff instruction to come back more prepared !!!
Last time I did one of these a tribunal judge took great delight in throwing pages of caselaw back at me showing that an ISA is one of the rare financial tools where the name of the account holder makes them the legal owner and beneficial ownership doesn’t enter into it. It’ll take some digging out but I am led to believe that the position has not changed. DWP have tended to confuse this by fudging it more often but the fact remains that money laundering legislation has only hardended that position. You open an ISA and put someone elses money in it then you are taking a huge risk benefits wise.
Not only benefit wise by the sound of it but potentially tax/finance wise as well, in terms of the risk you’re apparently taking.