Relative managing expenses prior to death

Goose1964

My father asked me to manage his expenses in the years prior to his death. I opened an account he gave me regular sums of money and the account was solely used to pay his expenses. Does this constitute a gift under IHT?

swingaloo

Was the account in your fathers name, did you have POA?

Hoenir

You have a record of these "expenses" to account for the money expended? 

Goose1964

I did have POA but the account was in my name. 

HobgoblinBT

Sorry for your loss.

From what you describe I don’t believe that the money was gifted to you and is not a gift for probate/IHT purposes for two reasons.

1.  You state that your father asked you to manage his money as his attorney and the money he passed to you was for meeting his expenses.  You opened a bank account for this express purpose ie no transactions on your own behalf.  The HMRC Probate website talks about money in joint accounts and concludes that the true owner is the depositor of the money.  Your situation is not exactly the same, but it was your father’s money that you held as his attorney so it seems reasonable to apply the principle in this case.

2. As an Attorney under a Power of Attorney, you are required to act in the best interest of the principle ie putting money in your own name and keeping it is a no no. (For the avoidance of doubt, I do not believe that you did this).  

I therefore believe in this situation that the funds held in the account are part of your late father’s estate.

The “advantage” of this arrangement when the principle passed away is that you have immediate access to the funds and can pass them to the executor without waiting for bank processes or probate.

Hope that helps.

Goose1964

Thank you that is most helpful