09 December 2011

UK Elder law update

New Court of Protection Rules from 12 December should help to reduce delay

The Court of Protection (Amendment) Rules 2011 which come into force on 12 December 2011 make provision for Court Officers to make decisions in relation to some aspects of the financial affairs of vulnerable people. The new Rules, introduced following a Ministry of Justice Consultation in the summer of 2011, recognise that judges of the Court of Protection currently spend too large a proportion of their time on routine non-contentious financial applications. As a result, relatively simple applications to the Court take an unnecessarily long time to be dealt with and the resolution of more difficult and important cases can be delayed. The smooth administration of the affairs of those who need non-contentious orders is disrupted too as a result of the time they have to wait to receive the Court’s approval.  

The proposal in the consultation was for simple non-contentious matters to be dealt with by specially trained Officers of the Court, freeing up judicial time for more complex work. This mirrors the system of nominated officers which existed successfully in the Court of Protection prior to the Mental Capacity Act and the suggestion was met with general approval from those who responded to the Consultation as a sensible and secure way of speeding up the system.
Safeguards are built into the new Rules – Officers must refer a matter up to a judge if appropriate, and may not conduct a hearing or hear an appeal. Additionally, a number of complex and contentious matters will always be dealt with by a judge. These include the making of a statutory will, gift or settlement for a vulnerable person, any decision about their personal welfare (as opposed to their finances), starting, defending or continuing litigation on their behalf or managing their business or partnership.

The Elder Law team very much welcomes the new Rules and is pleased that they will be introduced from 12 December – this is earlier than anticipated. Julia Abrey chairs the Society of Trust and Estates (‘STEP’) Mental Capacity Special Interest Group which was one of the respondents to the Consultation. The STEP response made a number of suggestions as to the operation of the new Rules which we were pleased to see were referred to in the Ministry of Justice’s response. There is also a new short Practice Direction 3A about the new Rules for the guidance of those making applications to the Court.

Compliance for Incapacitated tax payers – HMRC suggests changes in Finance Bill 2012

Following a consultation in Spring 2011, to which members of our team also responded, HMRC proposes to bring forward legislation in the Finance Bill 2012 to remove outdated – and offensive – definitions and terms relating to incapacitated persons from the statute book. The Bill will also remove the special current rules in relation to tax compliance applying to those incapable of dealing with such matters themselves. This will achieve the Government’s policy objective that incapacitated persons should have the same rights and obligations under tax law as they would if they were not incapacitated and that those rights and obligations can be exercised or met with the help of those appointed to deal with such matters for the person concerned.

This change is to be welcomed. As well as removing outdated and offensive terminology, HMRC is recognising that the general legal framework for assisting those who lack capacity should apply to tax matters. This should make it easier for attorneys under Lasting or Enduring Powers of Attorney or those who hold financial Court of Protection deputyships to deal with the tax affairs of those whom they represent.


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