Court of Protection tax and asset planning

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Court of Protection tax and asset planning

When individuals lose the capacity to manage their own affairs without having appropriate measures in place, it can create problems for related family.

We advised three adult children (and attorneys) following the death of an elderly parent.  The surviving parent inherited substantial assets, facing a significant tax liability.  She was at the time already in residential care, and unable to make or implement plans to mitigate the tax liability because of reduced capacity.  As attorneys are not allowed to gift material assets without Court authority, an application was required.

We worked with the family and the parent’s medical and care team to confirm the position in respect of capacity, and with the incumbent Independent Financial Adviser and accountant to establish a strategy.

With confirmation of the lack of capacity to act, we submitted an application on behalf of the attorneys to the Court for authority to make gifts using the normal tax allowances, enter into a Deed of Variation of the deceased spouse’s estate (which included asset protection), and also to purchase a financial services regulated product with a lump sum (and gift element) to mitigate tax.

Read more about how we help in situations where there's loss of capacity

Published: 24 Jan 2017

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