Wilkinson v Chief Adjudication Officer

For income-support purposes, a claimant’s beneficial share in jointly owned property must be valued at its current market value. The starting point is ordinarily the claimant’s proportionate share of the property’s value with vacant possession, subject to a discount for factors materially affecting realisation.

Where the property was an absolute testamentary gift to the joint owners, and no collateral purpose or legal obstacle prevents sale, the claimant is entitled to have the property sold with vacant possession or to receive the value of the interest. A co-owner’s occupation does not by itself reduce the share to a nominal value. Any discount for possible sale proceedings must be supported by the circumstances and evidence.

Mrs Barbara Wilkinson received income support while possessing a half share in a house inherited jointly with her brother under their mother’s will. The Social Security Appeal Tribunal and the Social Security Commissioner held that her capital exceeded the prescribed amount of £8,000 from the date probate was granted. They valued her share by reference to the net equity in the house.

Mrs Wilkinson appealed under section 24 of the Social Security Administration Act 1992. She argued that her brother’s occupation and asserted right to remain in the house made her share incapable of realisation or worth less than £8,000. The central issue was the proper valuation of a beneficial share in jointly owned property under the income-support regulations.

1. Majority outcome. Mummery LJ, with whom Potter LJ agreed, dismissed the appeal. Mrs Wilkinson had inherited a beneficial half share in the house and therefore possessed capital. The deeds of disclaimer and variation, and any possible issue of notional capital under regulation 51, were outside the appeal.
2. Under regulations 49 and 52 of the Income Support (General) Regulations 1987, the relevant asset was an equal share in the whole beneficial interest, valued at its current market value. Potter LJ stated that the proper starting point was half the market value with vacant possession, subject to a discount for factors materially affecting the ability to market the property and realise the claimant’s interest.
3. The will gave the house absolutely to the two children equally. It expressed no restriction or collateral purpose requiring the house to remain available as the brother’s home. His rights as beneficial co-owner were no greater than Mrs Wilkinson’s. If he wished to remain in occupation, he could do so only on paying her the value of her share or at least a market rent. Otherwise, a sale with vacant possession was appropriate.
4. The possibility of proceedings under section 30 of the Law of Property Act 1925, or sections 14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996, did not establish a sufficient obstacle to sale. On the evidence, there were no good grounds on which the brother could resist a sale. Any discount for possible proceedings would have been insubstantial and could not reduce the share below £8,000.
5. Evans LJ dissented. He considered that the mother’s wishes could constitute a collateral purpose relevant to an application for sale, even without an express or implied term in the trust. On that approach, the application for sale would probably have failed and the appeal should have been allowed. The court nevertheless ordered that the appeal be dismissed, with no order for costs save legal-aid assessment.

• Court of Appeal (Civil Division): appeal under section 24 of the Social Security Administration Act 1992 dismissed. The court upheld the decision of the Social Security Commissioner.
• Social Security Commissioner: appeal from the Social Security Appeal Tribunal dismissed on 12 August 1998; permission to appeal was refused.
• Social Security Appeal Tribunal: appeal from the adjudication officer dismissed on 15 October 1997. The Tribunal held that Mrs Wilkinson had a beneficial half share which could be realised by sale.