Capital disregard – are these proceeds from marital home?

Client and husband are renovating a house with the intention of moving in. Costs over run and they have sell the marital home where they both live to free up funds to complete the renovation. Simultaneously marriage ends so each move into separate rented.

Client’s capital from marital home (invested in the renovation house) is disregarded for HB purposes as they are taking reasonable steps to dispose of the house (para 26, Sch 6, HB Regs). She intends to use her share of funds from sale to buy new home for herself.

They sell the renovated house but disregard has now stopped as local authority argue that para 3 of Sch 6 does not apply as the sum is not directly attributable to the proceeds of the sale of a property formerly occupied as the marital home.

Is there any mileage in arguing that the sum can be attributed to the sale of the marital home as these proceeds were invested in the renovation house?

Or any other thoughts?

Tricky.  If the word “directly” was absent, it would undoubtedly be arguable.  Trouble is, recalling the way in which Judges breakdown and analyse why words are absent or present, I suspect (but can’t offer anything concrete), the word “directly” would be found to be there for a reason and, having taken a look at para 3 or Sch 6, my initial thoughts are that the LA is correct.  If the acid test was “winning is everything”, which party would I prefer to represent?  On balance, the LA (notwithstanding that appeals are supposed to be about reaching the correct outcome, not “winning”).

On the other hand, I can’t see there is anything to lose my appealing and, if unsuccessful, take a punt to the UT (at which there will still be nothing to lose).  Afterall, there are (apparently) no tortuous arguments about the facts;  it’s a straight “fight” about the construction of para 3.

Thanks Kevin - your conclusion is as I thought.

We’re talking 3 or 4 grand in lost HB so clt might well be tempted to ‘punt’.