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Lasting Powers of Attorney

From 1st October 2007 the Enduring Power of Attorney has been replaced with a new type of power called a Lasting Power of Attorney (LPA). However Enduring Powers of Attorney made prior to 1st October 2007 continue to be valid.

An LPA allows you (the donor) to choose someone (the attorney) to make decisions on your behalf. A person can make two types of LPA, one dealing with financial matters (as do EPAs) and one concerning personal welfare.

The attorneys can only use the completed LPA after it has been registered with the Office of the Public Guardian. Existing EPAs only need to be registered with the Court of Protection when the person loses mental capacity.

Inheritance Tax Reforms

From 9th October 2007 on the death of a spouse or civil partner a claim may be made to transfer any unused part of the IHT nil rate band to the survivor.

How is the amount to be transferred calculated?

The percentage unused by the first spouse to die is then multiplied by the nil rate band current at the death of the survivor e.g. if a spouse dies leaving assets worth £150,000 to his or her children one half of the current nil rate band of £300,000 is available for transfer. If at the time of the second death the value of the nil rate band is £340,000 the amount available to be transferred would be to 50% of £340,000 i.e. £170,000. This would give a total nil rate band of £510,000 (i.e. £340,000 + £170,000).

The maximum amount that can be transferred is one additional nil rate band.

Does anything need to be done when the first person dies?

It is important to work out what the transferable amount is and that the surviving spouse or civil partner is provided with the necessary information so that on his or her death the personal representatives may lodge a claim.

How is the transfer made?

On the second death the personal representatives will need to make a claim to transfer the unused nil rate band from the first death. The time limit for lodging the claim is within 24 months from the end of the month in which the surviving spouse or civil partner dies.

Disclaimer

MSB Solicitors only provides legal advice after having entering into a Solicitor / Client relationship which our website specifically does not create. Only after having entered into a written, signed agreement with MSB Solicitors will a Solicitor/ Client relationship have been created. It is imperative that any action taken be done on the advice of a Solicitor because every case is different. The descriptions of awards in cases previously handled are not meant to be a guarantee of success.