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CTS claim second home

MaggieB
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Dorchester CAB

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Total Posts: 271

Joined: 11 October 2010

Hi client and partner live in home they own, they also have second property, No benefits. They have now separated and he has gone to live in second property. She will be claiming CTS (no UC luckily) and stay on her tax credits, can’t find anything to indicate that the second home would be ignored as capital as not former home, up for sale etc.  Any ideas?

HB Anorak
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Benefits consultant/trainer - hbanorak.co.uk, East London

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Joined: 12 March 2013

Assuming it is a conventional CTR scheme, you are right there is no disregard for that particular configuration.  Might be some issues about the value though - he is joint owner, lives there, has no inclination to move.  That makes her share a risky punt for any notional investor.  If the arrangement they have adopted is underpinned by documents drawn up by lawyers, that might reduce her theoretical chances of getting any money out of it: perhaps they have decided that the beneficial ownership of the two properties rests with their respective occupiers even if the legal ownership of both remains in joint names.

There have been a couple of UT cases in the last few years which I think we can sum up as:

- you cannot assume that the disputed assets of estranged couples have no value, but
- you cannot assume they have enormous value either

See, for example, paras 9 and 15 of this.