Decision Makers Guide - DMG45038

Purpose of the disposal of the asset: onus of proof

Getting tax credits or more tax credits may not be the applicant's main motive for disposing of the asset , but it must be a significant one1 . So when an applicant gives away all their capital to a relative just before applying for tax credits their

• main or predominant purpose may be to benefit the relative and

• intention, and significant purpose may be to reduce their capital so they can get tax credits or more tax credits

Example

If a person uses capital to repay a debt, the decision maker should consider carefully whether the debt had to be repaid at this time. If there is no legal obligation or pressure to repay the debt now, part of the purpose may have been to get benefit or more benefit.