PART IVINCOME AND CAPITAL
CHAPTER VICAPITAL
Notional capital34
1
A claimant shall be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to F15working families' tax credit or increasing the amount of that benefit F4except—
a
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; or
b
to the extent that the capital which he is treated as possessing is reduced in accordance with regulation 34A (diminishing notional capital rule);F10or
c
any sum to which paragraph 46(a) or 47(a) of Schedule 3 (disregard of compensation for personal injuries which is administered by the Court) refers,
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 3; F9or
d
a personal pension scheme or retirement annuity contract,
e
F11any sum to which paragraph 46(a) or 47(a) of Schedule 3 (disregard of compensation for personal injuries which is administered by the Court) refers,
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.
3
F13Any payment of capital, other than a payment of capital specified in paragraph (3A)F12of those Regulations made—
F1a
to a third party in respect of a member of F2the family (but not a member of the third party’s family) shall be treated as possessed by that member of the family to the extent that it is used for his food, ordinary clothing or footwear, household fuel F5 ... or housing costs F6or is used for any personal community F7charge, collective community charge contribution F8or council tax for which that member is liable; and in this sub-paragraph 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;
b
to 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 member to the extent that it is kept by him or used on behalf of any member of the family.
C1F143A
Paragraph (3) shall not apply in respect of a payment of capital made—
a
under the Macfarlane Trust, the Macfarlane (Special Payments) Trust, the Macfarlane (Special Payments) (No.2) Trust, the Fund, the Eileen Trust or the Independent Living Funds; or
b
pursuant to section 2 of the Employment and Training Act 1973 in respect of a person’s participation—
i
in an employment programme specified in regulation 75(1)(a)(ii);
ii
in a training scheme specified in regulation 75(1)(b)(ii); or
iia
F16in the Intensive Activity Period specified in regulation 75(1)(a)(iv) of those Regulations or in the Intensive Activity Period for 50 plus; or
iii
in a qualifying course within the meaning specified in regulation 17A(7).
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 29 (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.
F37
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.