Legal and Beneficial owner of capital

Hope someone can offer some thoughts on this.

Have client who has had IS and HB terminated because of capital. She had an account with over £5,000 in her name in which her brother had deposited money for her son’s university education. It was never intended that she should be the beneficial owner of this account, however this was only an implied agreement. Is there any caselaw supporting the fact the client can be the legal, but not the beneficial owner, even if the money is not in a trust fund?

In addition client was involved in extended legal case with ex husband, she was told in 2008 her final bill would be about £14,000, I have written evidence from Solicitors that the bill could not be repaid in instalments and whilst it remained outstanding it would accrue interest at 8% above bank base rate. Since 2008 client, again with the help of her brother, has saved over £14,000. The final bill eventually became payable and was paid in 2011.

The client has lived exceptionally frugally and her actions, in light of the debt, seem quite reasonable. This money was only ever intended for a specific purpose, although client obviously could have spent it on anything she chose. 

Any advice?

Hi

R(IS) 2/93 looks at benefical ownership.

If you look at the forum archive there are a couple of good threads about this.

Jane

What do you mean by an implied agreement? If it was expressly, even if orally, agreed between the brother and the client that this money was for this one specific purpose/beneficiary then that is all it can be used for and you have a full-blown trust. It has never been the law that a trust has to be in writing (unless it is a trust of land). I don’t know how you can have an implied agreement, to be honest.