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How to make a Lifetime Financial Transfers enquiry
Explained in four easy steps
Free Initial Advice
Call us, request a callback or complete our online claim form and we will assess whether we can assist you.
Funding
We will discuss funding options with you; usually, this is private funding but this can often be paid for via a related personal injury or clinical negligence claim.
Submit Application
We will prepare application papers and supporting evidence before filing these on your behalf.
Order received
We will receive an Order from the Court of Protection providing the relevant authority.
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FAQs
Who can look at making a gift?
A Deputy or an Attorney under a Lasting Power of Attorney or Enduring Power of Attorney
can bring an application to the Court of Protection for the approval of a ‘gift’ or authorised
transfer of assets where it is in the best interests of ‘P.’ The Office of the Public Guardian
has a detailed practice note on when this might be considered appropriate.
https://www.gov.uk/government/publications/public-guardian-practice-note-gifts
What gifts are permitted?
Some gifts of a smaller nature are permitted by Attorneys and Deputies under S12 Mental Capacity Act 2005. Customary gifts amongst family and friends i.e. birthday, Christmas and gifts are permitted provided the amounts are proportionate to the size of the estate.
What is the Law relating to attorney and deputy gifting?
The law relating to gifting is set out in S16 of the Mental Capacity Act 2005 and more
specifically in S18 (1) (b). The act of gifting is required to be in the best interests of ‘P’ which
in itself requires an assessment of all the relevant surrounding circumstances.
Where might a transfer be considered a gift?
It is easy to be caught out by the gifting rules as you might not necessarily think of some transfers as gifts. Transfers to be wary of are;
- Interest free loans, as they essentially gift the interest.
- Selling a property at an undervalue.
- Making a payment to a family member for care they have provided.
- Providing for the needs of those connected to the person.
- Transferring funds to yourself.
- Varying ‘P’s’ entitlement by transferring assets into a trust or by a deed of variation.
How do I deal with any unauthorised gifts made?
If you have made unauthorised gifts you are best taking legal advice and initiating a
retrospective approval application to the Court. The making of unauthorised gifts can
ultimately lead to removal as an Attorney or Deputy and potentially a referral to the police.
How does the court determine whether to approve gifting?
In considering what is in the best interests of ‘P’ the Court will follow a balance sheet
approach, weighing up the pro’s and cons, and they will need to consider expert evidence
relating to care needs, life expectancy and financial position to ensure that any agreed gift
leaves ‘P’ with enough assets to maintain themselves for the remainder of their lifetime.
Examples of the kinds of transfers that are acceptable
The Court will approve applications for many things for example retrospective care
payments to family members, for the transfer of assets from a directors account of a family
business, the release of equity from property to pay for care fees and gifts of assets to
minimise inheritance tax (IHT).
Do you need to have engaged in tax planning prior to capacity loss for it to be considered post capacity loss?
Although IHT planning gift applications have been successfully approved by the Court the
recent decision, in the case of FL v MJL [2019] EWCOP31, found that there was not
sufficient evidence to show that it would be in ‘P’s best interest to gift large amounts of his
estate to minimise inheritance tax where he had been indifferent to such planning
previously. There is therefore a suggestion that inheritance tax planning applications will
need to evidentially show an engagement with accountants and a pre capacity loss
interest in tax planning to succeed.
Call me back
Meet our Court of Protection lawyer
Eve Carter
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