Deputyships and making gifts

View profile for Kelly Knight
  • Posted
  • Author

Kelly Knight, a solicitor at Hyphen Law, outlines how deputies who look after the affairs of people who lack capacity, can give gifts on their behalf.

A deputy makes key financial decisions for someone who has a mental impairment (often referred to as ‘P’).

Deputies can have a wide variety of powers such as: buying, selling and adapting property; employing staff; household budgeting; paying bills and reviewing state benefits, to name a few. However, what many people don’t know is that sometimes a deputyship order may include the authority to make gifts on P’s behalf.

These powers are often quite limited. But some orders do allow deputies to make gifts from time to time to relatives or important people connected with P as well as donate to charities which P might have wanted to support.

Each deputyship order is individual and deputies must check the powers contained within their order before they make any decisions or take any action as a deputy.

The following points need to be considered in relations to giving gifts on behalf of P:

  • The size of any gift must be reasonable taking into account all the circumstances and in particular the size of P's estate
  • Any decision must be made on a case by case basis and no generalised approach can be taken
  • The deputy must ensure that making the gift is in P's best interest. The principles of the Mental Capacity Act are also very important and should be considered

What is ‘reasonable’?

The question that often presents practical difficulties is assessing what is ‘reasonable’. There is little guidance from the Court of Protection which leaves deputies to make that decision themselves.

Recently, the Office of the Public Guardian (OPG) published a practice note to help give guidance on what should be taken into consideration and what questions should be asked.

It states that it is important to consider things such as P’s income and expenditure, the impact it will have on capital reserves, what gifts P made prior to losing capacity and what would be the usual practice on such occasions. It is also important to make sure that gifts do not exceed the annual gifting allowances set down by the HMRC.

Making excessive gifts may result in the deputy being investigated and if necessary, action taken against the deputy.  It is therefore very important that if a deputy is wants to make a gift which exceeds the powers contained within their order, they need to make an application to the Court of Protection.

For more information contact: Kelly Knight at Hyphen Law on telephone: 01983 213529, email: kknight@hyphenlaw.co.uk,