Family Law
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Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience.
I am sorry you have been waiting over the weekend for a reply. May I clarify that your mother still has capacity and has made the above decision herself?
Many thanks for the above. One final question if I may - does she wish to give the funds to the grandchildren now or does she wish to leave the funds in trust for them when they reach a certain age (they may already all be adults of course in which case this question may not be relevant)?
Thank you. Your mother is perfectly entitled to make the above gifts if she wants to. As her power of attorney you do not have any power to make gifts on her behalf unless your mother has given you an express power to do so in the power of attorney document. Otherwise the limits of our powers as attorney are to give small customary gifts such as birthday presents and the like on your mothers behalf which should would customarily give herself.
So it is important that your mother makes the gifts herself rather than you do it for her as her attorney. Of course you can help her but you should ensure there is a documented paper trail that shows that your mother made the gifts and not you. e.g. she signs a cheque and closure forms for the bonds and so on not you. To do otherwsise could leave the transaction open to a dispute by a third party in the future if your mother were for example to lose capacity. Providing it is your mother rather than you that makes the gifts this presents no problem.
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The gifts will be PETs as you suggest so the money will be treated as being in her estate for up to 7 years after the date she makes the gifts for tax purposes though there is taper relief which applies in the last 5 years of this period of 20% a year up to 100% relief after the 7 years.
The bond will be liable for income tax for interest. There is usually no captal gains tax to pay on a bond unless it is an index linked bond. The provider can confirm the position if you are not certain as to whether it is an index linked bond or not and whether CGT may be payable.
Has the above answered your questions satisfactorily?
Many thanks