Capital from sale of house/intention to buy another

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    We have a couple, the partner of the claimant sold a flat on 17.03.10.

    The claimant and partner took on a tenancy to rent their current home on 18.06.10 for twelve months and made a claim for HB/CTB. Their capital exceeds £16k.

    The claimant and partner have advised us that they intend to purchase a home to live in and therefore we should disregard the capital from the sale of the partner’s flat.
    However, the proceeds of the sale have not been ringfenced and are being used to pay rent, credit card bills, food and basically all other living expenses.

    Do we accept the claimant’s explanation that they ‘intend’ to buy another home or can we use the fact that they have not protected the capital and kept it separate to indicate that they are not intending to buy another property with it?

    The sum of money received from the sale in March was £43,182. This stood at about £23,672 at the end of July.


    [quote:3fd667ef32]Capital to be disregarded: Any sum directly attributable to the proceeds of sale of any premises formerly occupied by the claimant as his home which is to be used for the purchase of other premises intended for such occupation within 26 weeks of the date of sale or such longer period as is reasonable in the circumstances to enable the claimant to complete the purchase.[/quote:3fd667ef32]
    From what you’ve posted, it seems they have no intention to complete the sale of the new premises within 26 weeks of 17/03/10. In fact, it looks like their time is nearly up. Have they even made an offer on the new house yet? Have they even started looking for one?

    I don’t know what property prices are like near you, but will £20,000 get them much? I assume they will need a mortgage; is their combined income sufficient to get one? Have they applied for a mortgage with their bank yet?

    If the answer to any of these questions is no I would say the proceeds of sale cannot be disregarded.

    Kevin D

    I agree with Michael. There must be an element of certainty about the intended use in order for the disregard to apply – [b:51e63335b4]see R(IS) 7/01[/b:51e63335b4].


    No £20k wouldn’t get them anything round here.

    Their income isn’t high – claimant is a self-employed fitness instructor and PT is on JSA.

    I just wasn’t sure how far we should look into the intention to purchase another property and you’re quite right mwigg, their 26 weeks are almost up and they haven’t made any attempt to buy somewhere.


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