PART VINCOME AND CAPITAL

CHAPTER VIcapital

Notional capital51.

(1)

A claimant shall be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to income support or increasing the amount of that benefit F1except where that capital is derived from a payment made in consequence of any personal injury and is placed on trust for the benefit of the claimant.

(2)

Except in the case of—

(a)

a discretionary trust;

(b)

a trust derived from a payment made in consequence of a personal injury; or

(c)

any loan which would be obtainable only if secured against capital disregarded under Schedule 10,

any capital which would become available to the claimant upon application being made but which has not been acquired by him shall be treated as possessed by him but only from the date on which F2it could be expected to be acquired were an application made.

F3(3)

Any payment of capital, other than a payment of capital made under the Macfarlane Trust or the Independent Living Fund, made—

(a)

to a third party in respect of a single claimant or in respect of a member of the family (but not a member of the third party’s family) shall be treated—

(i)

in a case where that payment is derived from a payment of any benefit under the benefit Acts, a war disablement pension or a war widow’s pension as possessed by that single claimant, if it is paid to him, or by that member if it is paid to any member of the family;

(ii)

in any other case, as possessed by that single claimant or by that member to the extent that it is used for the food, ordinary clothing or footwear, household fuel, rent or rates for which housing benefit is payable, or any housing costs to the extent that they are met under regulation 17(1)(e) and 18(1)(f) (housing costs) or accommodation charge to the extent that it is met under regulation 19 or 20 (persons in residential care or nursing homes or board and lodging accommodation or hostels), of that single claimant or, as the case may be, of any member of that family;

(b)

to a single claimant or a member of the family in respect of a third party (but not in respect of another member of the family) shall be treated as possessed by that single claimant or, as the case may be, that member of the family to the extent that it is kept or used by him or used by or on behalf of any member of the family.

(4)

Where a claimant stands in relation to a company in a position analogous to that of a sole owner or partner in the business of that company, he shall be treated as if he were such sole owner or partner and in such a case—

(a)

the value of his holding in that company shall, notwithstanding regulation 46 (calculation of capital), be disregarded; and

(b)

he shall, subject to paragraph (5), be treated as possessing an amount of capital equal to the value or, as the case may be, his share of the value of the capital of that company and the foregoing provisions of this Chapter shall apply for the purposes of calculating that amount as if it were actual capital which he does possess.

(5)

For so long as the claimant undertakes activities in the course of the business of the company, the amount which he is treated as possessing under paragraph (4) shall be disregarded.

(6)

Where a claimant is treated as possessing capital under any of paragraphs (1) to (4), the foregoing provisions of this Chapter shall apply for the purposes of calculating its amount as if it were actual capital which he does possess.

F4(7)

For the avoidance of doubt a claimant is to be treated as possessing capital under paragraph (1) only if the capital of which he has deprived himself is actual capital.

F5(8)

In paragraph (3) the expression “ordinary clothing or footwear” means clothing or footwear for normal daily use, but does not include school uniforms, or clothing or footwear used solely for sporting activities.