Capital – disregard of business assets – whether flat let to tenants a business asset – whether presence of tenants affected valuation
The claimant let a flat she owned to tenants and moved into privately rented accommodation. She claimed housing benefit, telling the local authority that she did not wish to sell her home as it was an investment for the future. The local authority refused her claim as it regarded the flat as a capital asset worth more than £16,000 and the First-tier Tribunal (F-tT) dismissed her appeal. Among the issues before the Upper Tribunal were whether the flat was a business asset whose value could be disregarded under paragraph 8 of Schedule 6 to the Housing Benefit Regulations 2006 and, if not, its value. In reaching his decision the UT judge reviewed the relevant case law, including decisions of the Tax and Chancery Chamber.
Held, dismissing the appeal, that:
the meaning of “business” depended on its context in the legislation: Town Investments v Department of the Environment  AC 359 and the disregard of business assets as capital applied in income-related benefits (paragraph 16);
the case law did not attempt to specify what may amount to sufficient administration or activity to create a business. Carrying out the duties of a landlord was not sufficient: R(FC) 2/92. At best the authorities provided individual examples in particular contexts and, although they identified potentially relevant factors, these were neither essential nor exhaustive of the factors that had to be considered: Ramsay v Commissioners for Her Majesty’s Revenue and Customs  UKUT 0226 (TCC). No single factor was decisive. It was the combined effect of all the facts and circumstances of the case that determined the proper classification of the issue (paragraph 19);
the totality of the activities carried out by the claimant as a leaseholder and as a landlord did not allow for the flat to be treated as a business asset whose value could be disregarded (paragraph 29);
the value of the property exceeded £16,000 after any allowances for the existence of sitting tenants, the mortgage, and expenses of sale, so that the claimant was not entitlement to housing benefit on her rented home (paragraph 34).