Power of Attorney Restrictions

My parents are in their mid 70's, my father has had dementia for a couple of years now and although happy in himself he is incapable of making any decisions or looking after himself. My mother is partially deaf, refuses to wear a hearing aid and has recently been diagnosed with dementia and so is quickly loosing her memory and ability to make rational decisions. However, they still live in their own house, my mother refuses to move, and she looks after my father, but I fear it is only a matter of time before this situation will need to change.

Financially, they are very well off and live comfortably off their pensions and investments. I now have power of attorney, which only happened in the last 6 months. In fact I hadn't realised it had happened as despite completing all the forms, I didn't think I had "activated" it yet, but a recent conversation with the IFA that administers my parents investments made me realise that I now have full power of attorney.

For years my parents have "moved" investments that weren't income generating into mine and my two siblings names. I have had many conversations with my parents IFA about selling non-income generating investments over the years to give my parents extra cash to pay for holidays etc, or to move funds into their children's name to get it out of their estate. Even now, in her current state, my mother gets upset about not doing more to "stop the taxman" getting their money when they die!

So, the other day I found an investment of £40K that generates around £700 per year (1.8%) and as my mother had again been asking if she could give some of her investments to her children, I discussed this investment with "our" IFA. This is when he told me I had full power of attorney and therefore I was now unable to "gift" large amounts of my parents money.

There are two reasons why this surprised me:
1. The IFA is supposed to have advised me of all the non-income generating investments, but didn't mention this one to me. It appears there are also a couple of smaller investments that he has never mentioned. £700 per year will make absolutely no difference to my parents level of income and so could have been disposed of years ago if the IFA had mentioned it.
2. Because I explained that I wanted to sell this investment and re-invest it in the children's names (me and my two siblings), to get it out of their estate to avoid inheritance tax, he told me this wasn't possible due to the power of attorney being activated and because this would be considered as a large gift.

I appreciate this is a difficult situation. As power of attorney I have to act in my parents best interest. My mother is asking for this investment to be sold, but it is now my decision. My siblings also agree it should be sold. I should make it clear, we don't need the money, but it would be more tax efficient in the long term to sell it (assuming my parents live for a further 7 years). So "everyone" thinks this is a good idea, however, I'm being told by the IFA that I can't dispose of it, simply to remove it from my parents estate.

I would appreciate your thoughts on what can/can not be done in this situation.

Sorry for the rather long posting.