This is quite long but Im desperate so please read and reply with any help.

My client placed some money in an ISA after moving house.
She then became disabled and during her stay in hospital applied for IS (with help from a hospital aid as she was on large amounts of morphine)

Four years onhe revenue matched the ISA with the income support and after recalculation it was decided an overpayment had been made (£7,000).

My client claims she beleived that when opening the ISA that it was to be put into trust for her sons (now 24) further education. Even though it was just in her name.

They claim that it was disccussed between them before placing the money in the ISA that it was to be on trust and that the three certainties to create a trust were satisfied but no instrument was used as not needed

Her position now is that she lives alone with a child of 8 and has been on DLA since her hospital visit(above).Mental state also an issue

There is no evidence of transfers between hers and her sons account as when the ISA matured it was taken out in cash and kept by her son in a safe.Other extended family knew of their wish of trust.

1.Please could you help by giving me some case law (as much as pos).

2.Is a waiver a possibility and if so is this requested at tribuneral

3.How should I aproach this evidentially.

4.Her mental state has been suspect through deppression (on much medication also).Could i use this to help the problem......e.g case law again please.

Thank you very much for any replies

You face the problem that ISAs cannot be held in trust. The special tax treatment of ISAs means that they must be beneficially owned by the person setting them up and they will have signed a declaration to that effect. If you can establish that there was an intention to create a trust there has been a failure to pay tax on it and legal advice is needed badly.

You won't find any case law. This is all questions of fact. What was intended at the time? Has she ever treated the money in a manner which is inconsistent with it being on trust? Why was it put into trust in the first place - does any issue of capital deprivation arise?

If she is not beneficially entitled to the money then it is not hers and cannot be treated as such (this is a proposition of law but one that is self-evident). There is clearly a problem with possible tax avoidance or even evasion.

If there has been an overpayment then all the Tribunal can do is decide whether or not is is recoverable in law. They cannot decide whether it will be recovered.

All you can do is try to get the Tribunal to beleive your evidence.

brigid

Sorry but I forgot something really important. If the son was adult at the date of setting up the alleged trust, why didn't she just give the money to him in the first place? Doing it via a trust is a very odd thing to so if there is no practical barrier to an immediate gift.

Brigid

Brigid

I don't know much about ISA's but if there are tax advantages then doesn't that breach the rule that a trustee cannot profit from the trust?

Regards
Paul