Gifting under an LPA

I am aware that if an application to the Court of Protection is made to apply for substantial gifts to be made from the Donor’s assets under an LPA, the Court might consider what actions the Donor had previously taken, and what views they had on gifting while they had capacity.
I am trying to address this at the point of actually making the LPA, and while it could all form part of a letter, it seems to me that the ‘Preferences’ section on the LPA might be a good place to make such views known. I have come up with the following wording and wonder if members have any comments on problems likely to arise with the wording, or any improvements that could be made:

My attorneys may decide to make some gifts on my behalf from time to time. Where any gift is to the extent that an application to the Court should become necessary, I wish to make it clear that I am in favour of any gifting which might reduce the tax liability on my estate even (if this is of no direct benefit to me), as long as all my current and likely future needs can still be met from my remaining assets.
Many thanks in advance

Steve Wilkes
Silver Lining Estate Planning

I can’t remember the case, but am fairly sure reducing IHT by way of gift is not viewed as in the Donor’s best interest. I am certain somebody else will provide chapter and verse.

There are a number of decisions on this topic. One (relatively) recent one is;

McDowall and others (executors of McDowall, deceased) v Commissioners of Inland Revenue and related appeal [2004] STC(SCD) 22

This is discussed at IHTM 14251 | |

Attorneys are very restricted under section 12 MCA 2005. I think that anything other than the permitted use of the annual allowance or small gifts would need Court approval. Maybe even gifts out of usual expenditure out of income. People making improper gifts to themselves was cited as one of the reasons for changing from Enduring Powers of Attorney to Lasting Powers of Attorney.

There is some useful guidance at;

https://www.gov.uk/government/publications/giving-gifts-a-guide-for-deputies-and-attorneys/opg2-giving-gifts-for-someone-else-web-version

Thank you to everybody who has given their time to help here, it is apreciated.