I think that a tribunal could, and probably should, go on to decide the notional capital aspect. In fact, the appeal submission should suggest this, in the event that the tribunal accepts that your client no longer possessed the capital. If the submission does not suggest dealing with the potential question of notional capital, perhaps you should raise it before the hearing.
Disposal of capital by gambling is easy to claim and difficult to prove one way or the other. Having a genuine gambling problem should, as the earlier thread says, be enough to show that getting benefit was not a significant operative motive behind the deprivation. However, some tribunals have (understandably) no concept of how powerful and self destructive any addiction, including gambling, can be, and still seem to think of it as personal choice pure and simple. Any tribunal member who actually does understand gambling will be able to spot a bluffer at 20 paces
(Brian)
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