Blog
Enhancing Public Accountability: Key Elements of the Public Office (Accountability) Bill 2025
Kirsty Cook
The Gifting guide
It is not unreasonable for gifts to be made to those close to the Protected Party ("P") during their life time and this can be in a number of ways, whether this be customary, practical or just a one-off gesture.
This area also seems to cause the most issues within the courts and just as much confusion amongst new deputies and attorneys. It is vitally important that any decision made on behalf of P in relation to gifting are thoroughly considered and the correct procedures are applied. If not, there could be potentially devastating consequences for P and you as deputy.
Deputies have a duty to manage the assets of P in their best interests whilst taking account of what their wishes and feelings would be if they retained capacity. It is important to maintain what may be long standing traditions set up by P as well as respect their wishes to make gifts to those that they are close to. There can also be a variety of reasons as to why gifts are made during the lifetime of P; including gifts made to charities and to reduce a potential inheritance tax liability on P’s death.
Gifts authorised under a Deputyship Order
Most deputyship orders will provide authority for gifts to be made on customary occasions, including birthdays, Christmas and weddings. Gifts to charity are usually also authorised under a deputyship order if this was common practice before P lost capacity.
Generally, you can work on the basis that up to £250 for close relatives or friends is allowed without further authority, so long as it is in line with P’s previous gifting habits. However, this is not a hard and fast rule and you should still give careful consideration to any proposed gift. Anything over this amount and you will almost certainly need to seek the court’s approval first.
Considerations for all gifts
All gifts should also be considered in line with the following:
Size of the gift in relation to the total estate of P
For example, a gift of £250 may seem reasonable though if P only has £2,000 in assets, this gift will likely be unreasonable given the circumstances.
Income and expenditure for p
If P has substantial expenditure and very little by way of income, and this is unlikely to change in the near future, a large gift may drastically affect their ability to cover their future costs.
Reason for the gift
You will need to justify why a large gift is being made at this time and to whom.
Potential estate/inheritance tax implications
You will also have to demonstrate how the gift will affect the estate in relation to inheritance tax and any specific gifts set out in P’s Will. You don’t want to give away a gift that has already been bequeathed to someone on death.
Care funding consequences
If a financial assessment is required at some point in the future seeking help with care funding, any large gifts made could be deemed as deprivation of assets. The Local Authority could look back as far as 10 years prior to the assessment for any substantial gifts made. If they believe it was gifted in order to reduce P’s estate to below the threshold for care funding, they may refuse to provide funding when it is needed.
Self-gifting by a deputy
There are also strict guidelines as to a deputy gifting themselves from P’s estate. It is a common mistake by deputy’s that they can make whatever gifts they like, to themselves or others, once appointed. Whether these be one of gifts of large amounts or just using P’s funds as their own; if they are outside of those authorised on customary occasions, they will be deemed as gifts by the court and further explanation will be requested by the OPG.
If you are unsure as to whether a gift falls under the authority set out within the deputyship order and/or whether it is reasonable considering the above, then always seek professional advice prior to making the gift. Retrospective applications can be made though there is no guarantee that they will be successful and, if they aren’t, it may be ordered that the ‘gift’, in whatever form, is given back.
If an application is required, then professional advice should be sought as these can be complex as well time consuming and costly if they lead to further proceedings.
FURTHER INFORMATION
If you would like further information or advice about the topic discussed in this blog, please contact Lauren Eyre in the Court of Protection team.
ABOUT THE AUTHOR
Lauren deals with the management of deputyships, with a focus on clients diagnosed with dementia and those that have suffered medical negligence resulting in serious brain injuries and long term impairments.
We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.
You may also be interested in:
Blog
HMRC Covid scheme amnesty: action by 31 December 2025
Waqar Shah
Blog
‘No win, no fee’ - are clients being hoodwinked?
Dale Gibbons
Share insightLinkedIn X Facebook Email to a friend Print