Deprivation of assets for means tested benefit

Trusts Discussion
1

Good afternoon,

I have a client who has been referred to me from the conveyancing dept. He is selling a property which he owned with his ex-partner and he wants to know if he can put his share of the sale proceeds into trust to prevent him losing his Universal Credit.

I do not believe this to be the possible as it would surely fall under deliberate deprivation of assets? He said he has spoken to someone who is a “legal person and does trusts” and they have said it is possible for this to be done. If it were not an in-house referral I would (of course) tell him to go to that person and they can handle it, but I feel more diplomacy is required here.

The only thing I thought was that they may be getting confused with disabled person trusts (as he is also registered disabled) but they are set up by a testator for a beneficiary rather that the individual moving their assets away.

Anyone shed any light?
Thanks

Gemma Van Duke
Bishopsgate Law

2

See Reg 50 of the UC Regs which says that a person will be treated as possessing capital of which they have deprived themselves for the purposes of securing entitlement to UC. There is a lot of earlier case law on the similar (but not identical) Income Support provisions. The case of MC v SSWP [2010] UKUT 29 - at http://administrativeappeals.decisions.tribunals.gov.uk//Aspx/view.aspx?id=2852 which is in the context of the also similar pension credit rules may be of some help.

Anne Redston
Temple Tax

1 Like
3

It has always been my understating that the only type of trust that can be self-settled to shelter assets from means-tested benefits is a personal injury trust. I do not think that even self-settling on a disabled person’s trust would be effective for this purpose.

Lorna Sansom
Blandy & Blandy LLP

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