Universal Credit and Asset Dilemma

HillStreetBlues

Newcad said:

If the property has changed hands then it is no longer theirs so doesn't need to be disregarded, but that change still has no effect on their UC entitlement, - so no DoC can have happened.

I don't fault your logic, but it's not the case.
Disposing of disregarded capital and even moving capital from one area of disregard to  another area of disregard can still lead to DoC

Spoonie_Turtle

HillStreetBlues said:

Newcad said:

If the property has changed hands then it is no longer theirs so doesn't need to be disregarded, but that change still has no effect on their UC entitlement, - so no DoC can have happened.

I don't fault your logic, but it's not the case.
Disposing of disregarded capital and even moving capital from one area of disregard to  another area of disregard can still lead to DoC

That would seem to invalidate the notion of disregarding capital then.  Disregarding is as if it doesn't exist, it is not taken into account for the UC claim.  Expecting it not to be spent because it's going to be taken into account at some point in the future would mean a disregard is only partial - 'we're going to pretend you don't have it but we know you have it so you'd better keep hold of it' is a bit weird.

Edit: the above of course is just my thinking, what actually matters is what happens in reality and whether there's any precedent for them determining DoC for disregarded capital at the end of the disregard period.

HillStreetBlues

Spoonie_Turtle said:

HillStreetBlues said:

Newcad said:

If the property has changed hands then it is no longer theirs so doesn't need to be disregarded, but that change still has no effect on their UC entitlement, - so no DoC can have happened.

I don't fault your logic, but it's not the case.
Disposing of disregarded capital and even moving capital from one area of disregard to  another area of disregard can still lead to DoC

That would seem to invalidate the notion of disregarding capital then.  Disregarding is as if it doesn't exist, it is not taken into account for the UC claim.  Expecting it not to be spent because it's going to be taken into account at some point in the future would mean a disregard is only partial - 'we're going to pretend you don't have it but we know you have it so you'd better keep hold of it' is a bit weird.

Edit: the above of course is just my thinking, what actually matters is what happens in reality and whether there's any precedent for them determining DoC for disregarded capital at the end of the disregard period.

There is case law about DoC and disregarded capital  I will try to dig some out.
It is treated like any the DoC, for example a person could have £20k,  put it into all into an annuity, then claim UC, although that person still has the £20k (although disregarded) DoC would apply if the reason (or significant purpose) was to be able to claim UC.

There is only two times DoC can never apply, that is pay off or reduce a debt and to pay for goods and services if the purchase was reasonable in the claimant's circumstances. DoC is possible at all other times.

Newcad

Changing a disregarded capital from one form to another is currently being discussed in a thread on rightsnet, it's getting a bit legal - not quite the same as here but interesting.

It tends to point up what we already know - DoC is complicated (and often appears subject to individual interpretation and opinion, so can be arguable).

HillStreetBlues

The most appropriate case law I could find is  https://www.rightsnet.org.uk/pdfs/cis/1586_97.pdf
In a nutshell the father sold his house to his daughter for £5k, although this was given straight back to her.
Although at the father was living in the house it would be disregarded, by selling ( or more likely given away) to daughter  DoC must be considered 

Slightly different from OP but the principle is the same, OP wants to give away a property that is currently disregarded, so I feel the above case law would apply.

Newcad

Overall for rhis particular thread I would tend towards -

As the property is currently disregarded for UC porpoises then don't change anything unless there is another pressing reason to do so.

Edit- I like that autospell error so I'm going to leave it.

HillStreetBlues

Newcad said:

Overall for rhis particular thread I would tend towards -

As the property is currently disregarded for UC porpoises then don't change anything unless there is another pressing reason to do so.

Edit- I like that autospell error so I'm going to leave it.

I agree.
I liked the typo, and agree you should leave it whale alone.

Jason35x

Hi, the £30k was used towards buying the house we live in now, my mother is 70 and gets attendance allowance. We have no mortgage. We have £0 savings. We transitioned from working tax no child tax. There is no transitional disregard. Thamks

Jason35x

Thank you for all the replies, to continue we all agree that when we get lump sums from any source, house sale, lottery win, inheritance we are allowed to pay of debt with it and that wouldn't be DOC. Question is there a time scale that the debt must be incurred? For example I take out a loan for £5k in January and unexpectedly win a tribunal in April that pays me £11k. Can I pay the £5k off and keep the £6k in the bank?

peteuk

Jason35x said:

Thank you for all the replies, to continue we all agree that when we get lump sums from any source, house sale, lottery win, inheritance we are allowed to pay of debt with it and that wouldn't be DOC. Question is there a time scale that the debt must be incurred? For example I take out a loan for £5k in January and unexpectedly win a tribunal in April that pays me £11k. Can I pay the £5k off and keep the £6k in the bank?

Debt is debt regardless of the when, why, how?  However the tribunal money will come with a period of disregard, depending on the type if tribunal and what the payment is for..