Small gifts by an Attorney – no need to apply to court

In the case of GM, MJ and JM [2013] COPLR 290

This recent case provides welcome confirmation of a pragmatic approach to the  making of small gifts by Attorneys

Senior Judge Lush referred to the earlier Re Buckley [2013] COPLR 39 case where he said that “subject to a sensible de minimis exception where the potential infringement is so minor that it would be disproportionate to make a formal application to the court” an application must be made if the gifts exceed the limited scope of the authority contained in Mental Capacity Act 2005, s12.

He suggested that to be proportionate and pragmatic and to prevent the Court being swamped by applications the “de minimis” exception should be construed as covering the annual IHT exemption of £3,000 and the annual small gifts exemption of £250 per person up to a maximum of, say, 10 people in the following circumstances:

•  where P has a life expectancy of less than 5 years;
• P’s estate exceeds the nil rate band;
• the gifts are affordable having regard to P’s care costs and will not adversely affect P’s standard of care and quality of life; and
• there is no evidence that P would be opposed to the making of gifts of this magnitude on their behalf.

This is a useful case for Attorneys as it confirms that they can continue to make small gifts to relatives on behalf of a donor when they take over their affairs if they had done so in the past, without the expense and hassle of an application to court.

If you would like any further information on this years budget, estate planning or tax issues please contact one of the Edwin Coe Private Client team.

 

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