ISA taken out to repay interest only mortgage to cover shortfall in endowment

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    I am preparing a case for submission to Tribunal at present where the claimant has an interest only mortgage of £65k. At the point of being advised that the endowment Policy would not meet the assumed capital potential to repay the mortgage at the end of the term,(the policy only guarantees £45k), the claimant took out an ISA to meet the capital shortfall. He is paying into this ISA by DD on a monthly basis. At the same time as taking out the ISA the claimant also took out a Level Term Assurance with L&G with a pay-out of £20k should the claimant die etc. He states the two were taken out together so that the ISA should repay the £20k shortfall at the end of the mortgage term or in the meantime if the claimant should die the L&G plan will pay out the £20k.

    The claimant is appealing on the basis that the ISA should be disregarded under Schedule 5 – 17 of the CTB Regs.

    Despite numerous requests the claimant has provided no documentation to confirm that the ISA or the L&G Assurance Policy is legally linked to the mortgage.

    I believe the capital must be included and cannot be disregarded as there is no link to the mortgage and the ISA could, if the claimant wanted, be cashed in at any time.

    This claimant is awful and has already complained ans so I want to be so so sure I am right.

    Oh another thought….JSA(CB) has ended and JSA(IB) has been refused by the DWP as they have also included this capital.

    The claimant is also making HUGE waves with the DWP with complaints flying all over!!!

    Any responses would be great

    Kevin D

    Given the claimant cannot demonstrate an interdependant connection, I think it is reasonable to decide there is no such conncection and, in turn, no disregard.

    My advice is to send it all off to TTS as usual and if the clmt continues to make waves, write to TTS politely explaining that if the clmt has evidence of the connection needed, the LA will be happy to consider revising its decision and, to expedite matters, it may be helpful if the Tribunal will issue a Direction to the clmt requiring him to provide the evidence in question.

    If it’s all done politely and professionally (i.e no “slant”), it leaves the clmt with nowhere to go. Once it’s at TTS, the LA can properly point out to the clmt it is now a matter for the Tribunal to determine.

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