Reply To: Capital – business asset

#8330
Anonymous
Guest

I see Reg 49(5) as being designed for the situation where legally the claimant owns shares in a company but for all practical purposes the business is like self-employment:

– it’s a one man band, or a one couple band
– the shares probably have a notional face value that bears no relation to the capital value of the company
– the shares have probably never been traded, so there is no market value you can refer to
– there is very little to stop the claimant from treating the company’s assets as if they were his own personal assets, just like they would be if he were self-employed

The effect of Reg 49(6) is that the value of the assets can be disregarded in much the same way that personally owned business assets used for self-employment are disregarded under Schedule 6.8 for as long as you are in business. From what has been said about this case, it seems he is no longer active so para (6) would not apply.

What is not completely obvious from the wording of Reg 49 is the following:

– are we talking about the claimant being treated as owning an amount of money calculated by reference to the company’s assets, rather than treating him as if he owns those assets directly? (yes, I think so)
– does that mean that disregards applicable to “premises” do not apply to the claimant’s capital for Reg 49(5) purposes (not sure, but I don’t think so)?
– in arriving at the value of money the claimant is treated as possessing under Reg 49(5), should the premises disregards be applied to the company’s assets first before the value of money attributed to the claimant is fixed? In other words, should the company’s assets be valued in the same way a claimant’s assets are valued, including any disregards that may apply? (Arguable)

If the premises disregards are engaged directly or indirectly, this means that the Council needs to consider whether sufficient steps are being taken to dispose of the premises; if not, it doesn’t matter how hard the company is trying to sell the premises, the value still counts in full.