Private Client

The main matters with which the Department deals are listed below and if you would like further information on any of them please do get in touch with us.

Tax impacts on much of the Department's work and in recent years there have been substantial changes which affect our work. For example:

1. Provisions for a Pre-Owned Asset Tax were in the Finance Act 2004. Briefly it can apply where you have the use of an asset which you gave to someone previously or if you have the use of an asset owned by someone else to whom you made gifts in the past. Intended to counter Inheritance Tax avoidance schemes, the tax is an income tax charge on the benefit of using the asset and can require a review of gifts and transactions carried out as far back as 1986.

2. Significant changes to the Inheritance Tax treatment of trusts were made in the Finance Act 2006 and prompted a review of not only existing trusts but also of how to provide in a Will or in one's lifetime for the young or vulnerable.

A major non-tax change which will affect the Department's work comes about as the result of the Mental Capacity Act 2005 and is the introduction as from the 1st October 2007 of a new Power of Attorney called a Lasting Power of Attorney.

What is a Power of Attorney?

A Power of Attorney is a document by which an individual ("the Donor") authorises one or more others ("the Attorneys") to deal with the Donor's property and financial affairs.

For example a power of Attorney may be used for convenience to help with day-to-day tasks such as dealing with banks and utility companies or, if the Donor is out of the country for a period of time, to enable someone to look the Donor's financial affairs whilst the Donor is away.

A Power of Attorney takes effect as soon as it has been completed unless the Donor has stated in it that it is to be effective on a later date.

The authority of the Attorneys can be limited to only some of the Donor's assets or financial affairs

Enduring Powers of Attorney

An ordinary Power of Attorney ceases to be effective if the Donor loses mental capacity. However it is often in such circumstances that the Donor would want or need someone to deal with his or her financial affairs.

Accordingly Enduring Powers of Attorney (EPA's ) were introduced some time ago to cover this situation. An EPA operates in the same way as an ordinary Power of Attorney until the Donor loses mental capacity. At that point the Attorneys can apply to register the EPA with the Court of Protection and, once the EPA is registered, can continue acting on the Donor's behalf.

What is changing under the Mental Capacity Act 2005?

An EPA completed prior to the 1st October 2007 will continue as before. However a code of practice has been made which Attorneys should observe when exercising their powers and duties. This can be viewed or purchased at:

http://www.publicguardian.gov.uk/

However no new EPA can be made after the 1st October 2007 . From that date a new form of Power of Attorney is being introduced called a Lasting Power of Attorney ("LPA")

Lasting Powers of Attorneys

There will be 2 different types of LPAs. One will cover the same areas as an EPA, i.e. property and financial affairs; the other will cover personal welfare (including giving or refusing consent to medical treatment - "a Living Will").

The main differences between an EPA and an LPA dealing with property and financial are that the LPA has to be supported by a certificate signed by an appropriate person confirming the Donor's capacity to make the LPA and that the LPA has to be registered with the Court of Protection before it can be used. This is so even though the Donor still has mental capacity.

In the case of an LPA dealing with personal welfare, the LPA can only be used if Donor has lost mental capacity.

Fees & Costs

An EPA consisted of 4 pages while the new LPA will be some 24 pages! This and the need for a certificate of capacity will mean the fees for preparing an LPA will be more than for an EPA.

Further as mentioned above the LPA cannot be used until it has been registered at the Court even though the Donor still has mental capacity. The court registration fee is currently £150.00 and has to be paid "up front" if it is intended that the Attorneys are to act straight away.

Below are the main matters our Private Client team deals with, select a link to see more detail:

Charity Law

Court of Protection

Disputes about Wills Trusts
& Inheritance

Wills, Codicil & Living Wills

If you know who you want to contact in the Private Client Department
follow their link for details;

Alistair Sursham, Kathryn Ayrdon, David Londsdale,
Michelle Collins, Barbara Pond, Jane Gilbert

Cozens-Hardy LLP is a limited liability partnership