If you’re acting on behalf of a loved one, as an attorney or a deputy, big occasions such as Christmas, birthdays or anniversaries can raise some questions.
It’s not compulsory for you to give gifts, unless clearly stated in the lasting power of attorney or court order, and should always be done with the best interest in mind of the donor (the person whose financial affairs you’re looking after).
What is a gift?
Gifts actually cover a wide range of things such as:
- donations to charities
- paying for school fees
- living rent free or at a reduced rate in a property belonging to the donor
- selling the donors home at a reduced rate
- creating a trust for someone from the donor’s property
- giving someone an interest free loan
Who can give gifts?
As part of the Mental Capacity Act, the donor should always be consulted before decisions are made and included as much as possible. If the donor has mental capacity then it is their decision.
If the donor has fluctuating capacity you will want to consult them at the best possible time and make sure they understand the request. You can find more information on how to assess if someone has the ability to make these decisions or how best to involve them in the decision making process in chapter 4 of the Mental Capacity Act Code of Practice.
Remember, an unwise decision doesn’t mean the donor doesn’t have capacity to make that decision.
If the donor doesn’t have mental capacity then it is the attorney or deputy’s decision. You should consider if it is in the donor’s best interest to be giving gifts.
When can gifts be given?
You can give gifts on a ‘customary occasion’ such as a wedding, anniversary, birthday, graduation, or civil partnership.
This also includes occasions where gift giving is customary such as Christmas, Eid, Diwali, Hanukkah or Chinese New Year.
Gifts should be given to friends, family or close acquaintances of the donor for customary occasions. Donations to a charity are also considered gifts.
What is a reasonable gift?
You will need to look closely at the donor’s finances. Any gifts given should not impact on their ability to be able to pay for their care for the rest of their life and should be comfortably affordable. This can vary from person to person.
What happens if I make a gift I don’t have authority for?
If you’ve given a substantial gift to someone or have used the donor’s money yourself as a gift, there are a few possible outcomes.
- The Public Guardian may investigate you and your actions
- Ask you to pay back money or return gifts
- You may need to seek retrospective approval from the Court of protection for the gift
- You may be removed as an attorney or deputy
Consider the following cases and their outcomes
| Re EG [2015] EWCOP 6 | The Attorney was investigated and eventually removed from her position following her decision to gift £75,000 from the donor’s account. These gifts left the donor with less than £18,000. The decision was heavily disputed by the family as they believed the donor would have wanted to make the gifts. |
| PBC v JMA & Ors [2018] EWCOP 19 | Application by the donor’s son to receive authority from the court to make gifts from the donor’s estate in the sum of £7m. The authorisation was granted. The application was brought so that inheritance tax would be reduced if the donor survived for at least 3 years after the gifts were made. |
| PP [2015] EWCOP 93 | Application brought by the donor’s attorneys to ratify a gift of £324,000 used to purchase a property after receiving inheritance tax advice from an IFA. He applied for retrospective ratification of this gift from the court. The court refused the application. The gift, which amounted to 24% of the Patient’s estate, fell outside the ambit of the authority given to attorneys by section 12 of the Mental Capacity Act 2005 to make gifts out of the estate of a person who lacks capacity to do so. |
Jessica Jarvis 
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