WishIwasonholiday
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Hello folks, I'm hoping someone can help. My mother recently died, leaving our step father and my brother. My brother and I being executors to the joint will they made in 2012. Prior to Mum's death all three of us had LPA, although the actual document was never given to either of us by our step dad. Since my Mum couldn't understand things too well anymore our step dad took it upon himself to change her savings account to joint, to cash her ISA's and put them in his name and to take 25k and 26k of her money(his words) and take out new ISA's in his name. Saying "she thought she understood what he was doing" . The culmination of this is that there is not enough assets in Mums estate to pay the sum she was leaving to myself and my brother. Our step dad has also informed us that he is taking out a new will, in which his brother will be a 3rd beneficiary with myself and brother. The house was left as 25% each to my brother and myself, which is her share. As executor I'm at a bit of a loss as to what is left for me to do, if anything. Couple of questions, if I can.
1. Can/should he be able to do this.
2. If he decides to, which I know technically he doesn't have to, pay our bequests from the joint accounts, would that then be liable to tax as a gift.
Many thanks.
1. Can/should he be able to do this.
2. If he decides to, which I know technically he doesn't have to, pay our bequests from the joint accounts, would that then be liable to tax as a gift.
Many thanks.
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Replies
2. There is no gift tax in the UK.
I assume that this must have been joint and several? Otherwise the financial institutions should not have acted on his sole instructions.
https://eisenlaw.ca/2017/04/07/joint-or-joint-and-several-important-considerations-when-appointing-multiple-attorneys-under-a-power-of-attorney/
This looks like financial abuse.
https://www.coles-miller.co.uk/news/blog/how-to-stop-abuse-or-misuse-of-a-power-of-attorney-wpb.html#:~:text=Elder%20Abuse%2C%20Misuse%20Of%20Powers%20Of%20Attorney&text=They%20all%20involve%20money%20being,longer%20take%20decisions%20for%20themselves.
You could tell your stepfather that you will make a formal complaint unless he immediately repays the "loans" to the Exor account.
Presumably your stepfather was a tenant-in common with your mother.
He now becomes sole legal owner of the property although his equitable interest is 50%.
See https://forums.moneysavingexpert.com/discussion/comment/77397385#Comment_77397385
You might wish to register a restriction other than Form A to protect your interest - consult a solicitor.
" making things simpler". Does seem though that a solicitor is in order.
How did he make that out? In fact he acted improperly in transferring assets belonging to the donor of the PoA to his own account.
In terms of tax, a person may make gifts to other parties without any immediate charge to tax on either side - however, there may be IHT implications in due course for the estate of the person making the gift, for example in the case of a failed PET.
Did your mother have any assets in her name (apart from her share in the house) when she died?
Are you saying he plans to pay out anyway, it may actually be better for him to gift you than the estate as that preserves transferable nil rate band making IHT neutral on his estate for 7 years.
The other thing to check is how the share of the house was left, typically this is a life interest trust(IPDI trust), which means you have not inherited the house yet.
Cashing in the ISA and changing them to his ISA was probably financial abuse if your mum did not understand what he was doing.
There is no where to put in an "official complaint" as suggested other than go to court.