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tdlawyer
tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience:  11 years experience of general practice.
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My father is 84 years old and I have Power of Attorney on his

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My father is 84 years old and I have Power of Attorney on his finances.
My father is still able to handle his own financial affairs, so the POA has only been taken out for the future should it be required.
My Fathers 'Will' states that his estate is to be split between his three children.
My Sister requires some money now and my Father is willing to give it to her.
With all the above in mind, are there any legal reasons as to why my Father cannot give her a financial sum as a gift?

tdlawyer :

Hello, thank you for your question. My name is XXXXX XXXXX I can answer this for you.

tdlawyer :

Taking everything into account from what you have said, there is no reason whatsoever that your father cannot make the gift that he contemplates making.

tdlawyer :

Whilst is still able to conduct his own financial affairs, he can do as he wishes in this respect. The power of attorney, as you know, will only be relevant if he loses his capacity.

tdlawyer :

There may be inheritance tax consequences in this respect, but I appreciate you have not asked me about that so far. If you wish me to expand upon this, I can certainly do that for you.

Customer:

Thank you.

Customer:

Could you please explain the consequences of the Inheritance Tax?

tdlawyer :

Yes, sure. I make this observation simply because of your father's age. In a nutshell , payments made within seven years of the date of death are called "potentially exempt transfers".

tdlawyer :

All payments made more than seven years before death will not be relevant for inheritance tax purposes.

tdlawyer :

If death offurs within 7 years of a payment being made, and the total value of gifts/payments is less than the Inheritance Tax threshold, then the value of the gifts/payments is added to the estate value and any tax due is paid out of the estate.

tdlawyer :

This is probably only likely to be relevant if his estate exceeds £325,000.

tdlawyer :

You can obtain more information about this here:


http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

tdlawyer :

Does this answer your question? Is the anything you would like me to help you with?

tdlawyer :

Are you there?

Customer:

Thank you.

tdlawyer :

You're welcome. Are you happy with the service today please?

Customer:

If I understand your answer correctly are you saying that the Tax Threshold is £325,000

tdlawyer :

Yes for the 2014-2015 tax year.

Customer:

That's great. Thanks for your help.

Customer:

I have no further questions.

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