Son given go-ahead to pocket £6M of mentally ill mother’s fortune in tax cut bid
A man should be allowed to pocket £6 million of his mentally incapacitated mother’s £18.6 million fortune for tax reasons, a judge in a specialist court has decided.
The 72-year-old woman suffered from dementia and needed full-time care, Judge Carolyn Hilder was told.
She had executed a lasting power of attorney, and appointed her son as her only attorney, eight years ago.
The man, his mother’s sole surviving child, asked Judge Hilder to allow him to give himself a £6 million “gift”.
He said such a move would reduce inheritance tax liabilities.
Judge Hilder has approved the plan.
She has outlined her decision in a written ruling after analysing evidence at a hearing in the Court of Protection, where issues relating to people who lack the mental capacity to take decisions are considered, earlier this year.
The judge, who is based in London, said the woman could not be identified.
She said some might say the man’s application was “self-serving”.
But she said she was satisfied that the application had “not been improperly brought”.
She said the woman’s long-standing financial adviser was “fully in support”.
The woman had been separately represented by staff from the office of the Official Solicitor, who help mentally ill people caught up in litigation.
They had also given their backing.
Eight years ago, the woman had spent more than £500,000 on a home for her son.
Judge Hilder said the woman had made a will seven years ago under which her son would inherit the vast majority of her fortune.
The judge also gave the man permission to make “gifts” from his mother’s funds to a number of charities.
She was told that more than £7 million of the woman’s money would be given in gifts in total – a move which could cut inheritance tax liabilities by more than £3 million.
Judge Hilder heard that the woman was a widow who had been married a fourth time.
The woman had married her fourth husband when in her fifties.
He had been a businessman and had “created” the woman’s wealth.
Judge Hilder was told that he had died eight years ago and left his “entire estate” to the woman.
“(The woman’s) sole-surviving child makes the application,” said the judge in her ruling.
“Of course it may be said that, since he is the recipient of the largest part of the proposed gifting, the application is self-serving but I am satisfied that it has not been improperly brought.
“(The woman) appointed (her son) as her sole attorney, indicating a significant degree of trust and faith in him and the decisions he is thereby empowered to make.
“The proposal he now makes is beyond the scope of his powers as attorney but he makes it with (the woman’s) long-standing adviser, fully in support.”
She said “factors in favour” of the “proposed gifts” outweighed “factors against”.
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