Migration from benefits to UC questions? Saving etc?

ElwoodBlues

peteuk said:

ElwoodBlues said:. 

Sounds like your gold is an investment rather than a personal possession, so you'd need to declare that as capital when the time comes...

Capital held in a house that you live in is disregarded.   Its second homes, that are often rented out, which then are classed as capital. 

So you're saying as long as they store their gold in their primary residence it gets disregarded? 

Yamor

I know you are being sarcastic, but it isn't actually so simple (although probably not for the reasons Pete meant!).

There is case law (R(H) 7/08) which states that "'personal possessions' mean any physical assets other than land and assets used for business purposes".

The author of the commentary in the "Social Security Legislation" series comments that this would seem to include even items bought mainly, or even wholly, as an investment.

He goes on to say that there would then be difficult lines to be drawn, as at what point would items like coins or gold bars cease to be regarded as personal possessions, and start being regarded as a way of holding capital in the same way as everyday cash?

He further goes on to suggest that perhaps the word "personal" entails the exclusion of items with no element of personal enjoyment or cherishing, which could exclude items locked up in a safe or vault and never inspected.

So, maybe, gold bought for personal enjoyment and kept at home could be excluded???

However, as the commentary carries on to point out, even if you somehow manage to say that an item is a "personal possession", it would still leave you open to a deprivation argument, as the more evidence there is that an item was bought as an investment, the stronger the argument would be for its cost having been a deprivation of assets (assuming the expenditure was not reasonable in the claimant's circumstances).

Newcad

It is a tricky one with gold, other precious metals, and gemstones. (And sometimes artwork).

I believe that the DWP generally work on the principle that gold jewelry is Personal Posessions, but ingots are probably Capital.*
Similar with gemstones, stones in a jewelry setting are different from unset stones.

Coins are trickier, a coin collection of different coins in a display case (*or possibly differing size/value ingots) would probably be regarded as a Personal Posession, but a lot of the same coin (or ingots) isn't a 'collection', it's just a lot of gold.

But do note all the 'generally', 'possibly', 'probably' etc. there.

In the end a DWP Decision Maker will decide what counts as what, and if you don't like that decision you can appeal to the court and 'tell it to the judge'.

You may find this "Gold bars and UC" thread on Rightsnet of interest, basically it shows that the line between what is Personal Posessions and what is Capital is not clear at all, depends on circumstances, and even professional advisors can't pin it down with any certainty:
https://www.rightsnet.org.uk/forums/viewthread/17910/

In the end why (and sometimes when) you bough it is often the important factor.
If you bought it to reduce your capital that would be considered for benefits that you have clearly indulged in Deprivation of Capital.
Moving assets/capital from a form that is regarded for benefits to one that is disregarded for benefits is still deprivation if it is done in order to claim or increase/maintain benefits.
eg. Spending your savings on jewelry to get you capital below £16K and then making a claim for UC is deprivation of capital with a view to claiming benefits.

HillStreetBlues

The case law as I see it at the moment clear, ingots are a personal possession, as there is currently no other category for them to be put in.
If like anything else they have been bought to obtain or increase benefit entitlement then this will be classed as DoC.

If the DWP rule that ingots are not disregarded the claimant should appeal to LT, the LT should uphold the appeal as they are bound by CH/3700/2006  if they reject the appeal then as CIS/3434/2011 shows, the LT have made an error of law.

Is the scope Mr Jacob's decision too broad? maybe, but there would be the need for further Case law to narrow it or an Act of Parliament, neither has happened in over 15 years since  that decision.

jojaca

DoC is very grey area, buying big items like a £3,000 PC or £2,000 Oled TV can be DoC if your trying to get your funds down. What about for example buying collectable hot toys that will hold value, doesn't have to be gold, silver coins. Is buying a brand new car DoC when it leaves you under £6k. 

Spoonie_Turtle

jojaca said:

DoC is very grey area, buying big items like a £3,000 PC or £2,000 Oled TV can be DoC if your trying to get your funds down. What about for example buying collectable hot toys that will hold value, doesn't have to be gold, silver coins. Is buying a brand new car DoC when it leaves you under £6k. 

If it would have been reasonable to buy a secondhand car, i.e. you didn't specifically need a brand new one for certain accessibility features, then yes.

DoC is designed to cover things like using your extra savings to buy gold or collectible toys, things that can't be deemed as still having capital but are clearly just ways of needlessly lowering your savings to increase benefit entitlement.  It's closing what people might have seen as a potential loophole.

And we've gone way off topic here.

HillStreetBlues

jojaca said:

DoC is very grey area, buying big items like a £3,000 PC or £2,000 Oled TV can be DoC if your trying to get your funds down. What about for example buying collectable hot toys that will hold value, doesn't have to be gold, silver coins. Is buying a brand new car DoC when it leaves you under £6k. 

DoC rules are consistent is doesn't matter what you have (eg. cars, TVs, toys), are all treated the same. Coins could be currency and  maybe treated different.
The test is the reason you have them if someone gifted them to you, they are ignored, but if you have bought them it's the reason why and how it affects an income benefit.
So at some point if it's believed there is a possible DoC then a ruling will be made to see it if is. I wouldn't say it's a grey area legally, but would say it can be uncertain on some decisions (but do see why it might be classed as such).
An example could be a car and a teddy bear, both personal possessions, both are treated equally in so much as there might be DoC on either. What would be different it why they were bought, certainly a lot harder to argue a £10k teddy wasn't bought to reduce cash capital than a £10k car.

Yamor

HillStreetBlues said:

The case law as I see it at the moment clear, ingots are a personal possession, as there is currently no other category for them to be put in.

The Sweet & Maxwell commentary (quoted in my post above) suggests that it may be possible for gold to be regarded as a way of holding capital, like cash.
They also suggest that as Commissioner Jacobs wasn't directly concerned about the difference between personal possessions and investments, it may therefore still be possible to argue that "personal" indicates something more than a possession held purely for investment.

The Sweet & Maxwell commentary is written by UT judges, and is widely used by Tribunal judges across the country, so perhaps worth being cautious...

HillStreetBlues

Yamor said:

HillStreetBlues said:

The case law as I see it at the moment clear, ingots are a personal possession, as there is currently no other category for them to be put in.

The Sweet & Maxwell commentary (quoted in my post above) suggests that it may be possible for gold to be regarded as a way of holding capital, like cash.
They also suggest that as Commissioner Jacobs wasn't directly concerned about the difference between personal possessions and investments, it may therefore still be possible to argue that "personal" indicates something more than a possession held purely for investment.

The Sweet & Maxwell commentary is written by UT judges, and is widely used by Tribunal judges across the country, so perhaps worth being cautious...

I feel I should have expanded one of my answers a bit more.
I do agree being cautious would be the best policy, as holding gold might end being where the parameters are narrowed. 

My thinking (correct or not) is if a Tribunal (Upper) had used S&M to redefine on what capital can't be defined as personal possession, this would now be in use as Case law.