Limits Of Lasting Power of Attorney Abilities

elsien

Without getting into joint accounts and who owns what, your dad’s best interest’s are related to what he would have done when he had capacity. As he was happy with the situation as it was, this seems to indicate that he may well have left things as they were and you need to take that into account.

sheramber

Rather than getting bogged down with it is legal to take some of the money in the joint account and give it to your mother , as that is what it would be, does he have the maximum invested in an ISA?. That would still be on his name  and the interest is tax free.
,Your reluctance to address that point might indicate there is more to it than reducing the amount of tax paid on his interest. 

AlfaBoy505

sheramber said:

Rather than getting bogged down with it is legal to take some of the money in the joint account and give it to your mother , as that is what it would be, does he have the maximum invested in an ISA?. That would still be on his name  and the interest is tax free.
,Your reluctance to address that point might indicate there is more to it than reducing the amount of tax paid on his interest. 

Huh? Read the post. Not sure what you’re suggesting, ‘more to it’.
This is about my mother moving jointly held money into her name only. I don’t need to do that for her: she is his LPA and is quite capable of doing it herself.
He is maxed over the last few years on ISAs. There are no more mainstream tax-free savings methods available. 

AlfaBoy505

elsien said:

Without getting into joint accounts and who owns what, your dad’s best interest’s are related to what he would have done when he had capacity. As he was happy with the situation as it was, this seems to indicate that he may well have left things as they were and you need to take that into account.

Recent taxation changes and a rapid rise in savings rates has meant that taxation on savings interest has gone from not being an issue at all to becoming a significant one relatively quickly. Pension increases have also pushed him into the 40% bracket with even greater reduction in allowances (Married Couples and Savings Interest). These recent changes have coincided with my father’s cognitive function declining and my sister, who is not terribly savvy with personal finance, has been unaware that, as a couple, they are paying more tax than they need to, if their money is allocated appropriately. 

I don’t think anyone is ‘happy’ to be paying HMRC more than they need to, so I can safely say that, if my father was able to understand the situation, then he’d quite readily move money to reduce his tax bill. Like most sane people.

AlfaBoy505

sheramber said:

Rather than getting bogged down with it is legal to take some of the money in the joint account and give it to your mother , as that is what it would be, does he have the maximum invested in an ISA?. That would still be on his name  and the interest is tax free.
,Your reluctance to address that point might indicate there is more to it than reducing the amount of tax paid on his interest. 

And I’m quite happy to ‘get bogged down’ in the legal requirements of an LPA’s duties and responsibilities. It sort of goes with the territory I think?

tooldle

The crux of the matter is as Sheramber says. The minute you move jointly held funds, or funds held only by your Dad, into an account in Mum’s name, it becomes a gift to your mum and is no longer dad’s money. If a tax saving is absolutely necessary to support anticipated care costs going forwards, seek an opinion from OPG.
Was legal advice sought prior to the spouse being granted LPA? If so, it might be worth revisiting what advice the solicitor provided on the matter of joint accounts and the severing of.

AlfaBoy505

Ok, it’s not as cut and dried as I originally thought so I’ll take legal advice and write to the OPG for guidance. 

Thanks all. 

Linton

I am not so sure that moving Father's money into Mothers account under PoA to save a small amount of tax is actually a good idea.  There needs to be clarity over who owns which money.  Otherwise there could be awkward what-ifs.  For example what happens if Mother has to go into care?  Is the money hers or his?  What if mother dies is the money part of her estate?

If the money is documented as being Father's, strictly speaking isn't Father liable for any tax on it?  Is someone holding a bank account containing money documented as being owned by someone else compliant with the bank's TS & Cs?

In practice the amount of money concerned is probably very small  and it wont matter but I believe with PoA one must be very transparent and keep well clear of anything dubious.