34.—(1) An applicant is to be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to a reduction under an authority’s scheme or increasing the amount of that reduction except to the extent that that capital is reduced in accordance with paragraph 35 (diminishing notional capital rule).
(2) A person who disposes of capital for the purpose of—
(a)reducing or paying a debt owed by the applicant; or
(b)purchasing goods or services if the expenditure was reasonable in the circumstances of the applicant’s case,
is to be regarded as not depriving himself of it.
(3) Where an applicant stands in relation to a company in a position analogous to that of a sole owner or partner in the business of that company, he may be treated as if he were such sole owner or partner and in such a case—
(a)the value of his holding in that company must, notwithstanding paragraph 31 (calculation of capital) be disregarded; and
(b)he must, subject to sub-paragraph (4), be treated as possessing an amount of capital equal to the value or, as the case may be, his share of the value of the capital of that company and the foregoing provisions of this Chapter apply for the purposes of calculating that amount as if it were actual capital which he does possess.
(4) For so long as the applicant undertakes activities in the course of the business of the company, the amount which he is treated as possessing under sub-paragraph (3) is to be disregarded.
(5) Where an applicant is treated as possessing capital under sub-paragraph (1) the foregoing provisions of this Chapter apply for the purposes of calculating its amount as if it were actual capital which he does possess.
Commencement Information
I1Sch. 1 para. 34 in force at 27.11.2012, see reg. 1(1)