Hi all,

I have a client who has been refused HB, as she half-owns a property with her ex-husband (She was awarded this in a divorce settlement about 10 years ago). She has been living with family since the divorce, but has now been rehoused in a supported living complex, hence the application for HB. Neither her nor her ex-husband can afford to buy another property in the area should they sell this one, as the value of it is low (about £60,000, although I don't know how that valuation was obtained). Also, the ex-husband has flatly refused to sell the house, so this will only happen after his death.

Is there a way that the elderly lady can take reasonable steps to dispose of the property and, as a result, qualify for HB? For example, could she simply transfer her half of the property to her husband? Or would this fall foul of the rule of deprivation of capital?

Thanks,
Your sincerely,
K Key

If she transfers her beneficial interest (as opposed to merely transferring any legal title she might have) and it is a significant operative purpose of the transfer to gain entitlement to benefit then the notional capital rules will apply.

However, if she approaches a solicitor for advice about realizing that beneficial interest (for example, by applying to the court) then that interest can be ignored for 6 months from the dater of that approach, or longer if it is reasonable in all the circumstances.

If he is refusing to sell, what is the value of her share in the property?

The alternative approach as suggested above, might be to agrue that the current market value of her share is worthless? Have a look at CIS 2661 2006

There is a good discussion about reasonable steps and valuing capital in situations like this.

I presume the ex-husband doesn't live there, which might make getting a court order for sale easier. If it was sold as a whole of course she would have actual capital.

The right to apply for a property adjustment order under the matrimonial causes act is not a capital asset (See R(IS)1/03.)

The value of the deemed share was considered in R(JSA)1/02 and in CIS/3197/2003 and in a housing benefit case by Mr Commissioner Jacobs in CH/1953/2003.

I think that in this situation you have a strong argument that the deemed share is worthless since there likely to be no active market in such investments