A son acting as sole Attorney for his mentally incapacitated mother has been allowed to ‘give’ himself £6 million of her funds, in order to save inheritance tax. Further gifts are to be made to charity, reducing the woman’s estate by over £7 million and making a saving of £3 million on inheritance tax provided that (due to inheritance tax rules on gifting) the mother lives for at least a further 3 years.
The 72 year old mother suffers from dementia and needs full time care. She had two children from her first marriage – the Applicant son, and a daughter who died in 2009 leaving a son (who was a Respondent in the proceedings).
The decision was made by Judge Carolyn Hilder in the Court of Protection following an application by the man which the judge described as ‘self-serving’. The case was heard earlier this year and the judge has now delivered her decision in a written ruling. The Court of Protection deals with applications for Deputyship Orders, Statutory Wills and other such matters relating to people who lack the mental capacity to make decisions for themselves.
The mother made a Lasting Power of Attorney on 5th August 2010 which registered by the Public Guardian on 16th December 2010, giving her son the power to manage her property and finances. Her wealth amounts to £18.6 million.
Despite the self serving nature of the application, the judge was satisfied that the application “had not been improperly brought.” She also noted that the woman’s long-standing financial adviser was “fully in support”. The judge considered the factors for and against making the proposed gifts in a balancing exercise:
The judge stated that taking all things into consideration, she was satisfied that the factors in favour of the proposed gifts outweigh the factors against. In the context of the wider agreement between the parties, she was also satisfied that the proposals were in the best interests of the mother.
The mother had representation from the Office of the Official Solicitor, which ensures that the interests of those without mental capacity are protected. Those representing her also backed the decision.
Case reference: PBC v JMA & Ors  EWCOP 19 (16th April 2018)