PBC v JMA & Ors

PBC is the son of JMA, and was appointed as her sole attorney for property and affairs by a Lasting Power of Attorney executed on 5^th August 2010 and registered by the Public Guardian on 16^th December 2010. He seeks the authority of the Court to make from JMA’s estate various gifts together exceeding £7 million. The purpose of such gifting, openly stated from the outset of the application, is to achieve – as long as JMA lives at least a further 3 years - reduction of inheritance tax liabilities.

The parties have reached an agreement between themselves. Together, they ask the Court to make orders to give effect to their agreement. The matter was listed for hearing because the Court sought assistance in order to reach a conclusion as to whether or not the terms of that agreement are in the best interests of JMA.

I have read the following documents, most of which have been collated into a hearing bundle in two files:

Additionally I have read quite extensive correspondence which has been gathered together in Part A of the main bundle and tabs 1 -5 of the supplementary bundle.

The application was made on a COP1 form dated 29th June 2015. The proposed gifts were identified at section 5.2. In response to the question at section 5.3 (“How would the order benefit the person to whom the application relates?”) it was stated that “…if the following gifts were made now and [JMA] were to survive at least a further three years, then there would be significant inheritance tax savings on her death.”

The Court made various directions orders on 6th August and 1st December 2015, 28th January, 27th April, 24th June and 24th September 2016, and 3rd January 2017. The matter was then listed for an attended directions hearing before a District Judge on 9th March 2017. On that occasion JAA was joined as party, the Applicant was directed to file a further statement and the matter was set down for final hearing. That hearing did not take place because the parties reached agreement. Further orders were made on 14^th June and 2^nd August 2017, each by consent providing further time for the parties to file agreed submissions and draft orders.

The paper submissions were considered by District Judge Eldergill on 11^th October 2017. He did not grant the application but directed the Official Solicitor to:

“file a further statement which assists the courts (sic) with the following matters:

(a)

The existing case law as to why the court should assume that a significant IHT saving is in P’s best interests, rather than the interests of beneficiaries or donees in cases where P has not previously made significant arrangements to mitigate tax liability. (Footnote: ¹)

(b)

The status of the deeds referred to in paragraph 8 of the Position Statement of 5^th October 2017.”

The District Judge gave permission to the Applicant to file a statement addressing the same issues if he so wished and required him to file a copy of the will of RA, JMA’s deceased husband.

The matter was subsequently referred to me. On 26^th February 2018 I made an order which listed the matter for an attended hearing, explaining in the recitals that:

“The Court requires further assistance as to why the proposed order is considered to be in the best interests of the Donor. In particular, the Court is concerned to establish:

a.

In what sense the proposed gifts may be for the benefit of the Donor;

b.

To what extent the proposed gifts may be in accordance with the Donor’s past and present wishes, feelings, values and beliefs (including as to tax planning and previous levels of gifting);

c.

Whether proper consideration has been given to the expression of a wish in the will of RA (the deceased husband of the Donor, from whom it is said that the bulk of her estate derives) that the Donor “consider making gifts similar” to those set out in paragraphs 6-8 of his will…”

At the hearing I had the benefit of oral submissions from Mr. Rees QC, Ms. Rodgers, Ms. Watson and Ms. Haren. Their submissions have been of considerable assistance and I am now able to reach a conclusion, although I acknowledge that I have not had the benefit of adversarial argument.

JMA was born on 15^th December 1945 and is therefore now 72 years old. Sadly she suffers from an early onset dementia and requires full time care. Since June 2014 she has lived in a care home which she pays for privately. In an attendance note by her legal representative, JMA is described as wheelchair bound and no longer able to converse, although “she can look at you and maybe smile when you speak to her;” and it is said that she does recognise PBC and the care staff.

A COP3 assessment by JMA’s GP has been filed. The parties agree, and I accept, that JMA no longer has capacity to make decisions about making gifts. The same GP has considered JMA’s life expectancy and estimates it as “up to 10 years” but considers it “more likely that she will only survive between 3 and 5 years” (277).

JMA was one of eight children but only one of her siblings is mentioned in the papers as having continuing significance in her adult life: her sister, JG, who is now deceased but whose husband and son have visited JMA in her current care home. JMA’s long-term adviser, Neil Morris, says that “Before this application, I was not aware that [JMA] had other siblings.” (para 3.3 of third statement)

JMA had two children from her first marriage – the Applicant, and a daughter JA. The Fourth Respondent, JAA, is JA’s son and JMA’s only grandchild. There were two further marriages and then, in or around 1998, JMA married RA.

There is no information before the Court as to the relationship between RA and JMA’s children (Footnote: ²) both of whom, I summise, were adult before his marriage to their mother. There is also no information before the Court as to JMA’s financial resources or standard of living before her marriage to RA but the Applicant explains in his first statement (125) that:

“It was [RA] who created my mother’s wealth. He and his first wife sold a business….and this accounted for a substantial part of their wealth. I believe the businesses were sold for approximately £11 000 000 in the 1990s.”

In April 2002 JMA purchased a property at 4SH “with monies supplied by… RA at the time that [PBC’s] marriage broke down….it provided a home rent-free for [PBC]” (statement of Neil Morris at 180)

In January 2009, JMA’s daughter sadly died. The circumstances before and of her death have clearly had a significant impact on family relations both then and now, across all three generations.

In January 2010, RA also died. His will (321), which was made on 20^th January 2005, left his entire estate to JMA provided that she survived him by thirty days. An attendance note of the day when RA executed his will (supplementary bundle tab 13) records that he:

“… just wanted to make sure that there was provision for [JMA] in that she would get the whole of his estate should anything happen to him. In this regard [RA] read the first page of the will and was satisfied that [JMA] was provided for as discussed….”

In the event that JMA did not survive RA as provided, his will made “residuary provisions” including pecuniary legacies ranging between £50 000 and £500 000 to his two brothers, his sister, his six nieces and nephews, and three named individuals who had worked at RA’s company; and legacies ranging between £100 000 and £500 000 to each of six charities.

Clause 5 of RA’s will provides that if JMA inherits:

“…it is my wish that [she] has regard to…..[the Residuary Provisions] that I had intended to take effect if [JMA] had not survived me for a period of thirty days and [JMA] shall consider making such similar or lesser gifts as those contained in the Residuary Provisions as her circumstances allow and as she thinks fit to those beneficiaries named in the Residuary Provisions either in her lifetime or by her will.”

An attendance note of the day before the will was executed (supplementary bundle tab 13) records a telephone discussion between Mr Morris and RA:

“You need to make a codicil to your will that everything should go to [JMA]…. You are having a hernia operation tomorrow and you want to sign this before the operation. In the unlikely event of you dying you hope that she would make some bequest in line with your previous will and there should be a wish expressed to that effect.”

On 5^th August 2010, JMA executed a Lasting Power of Attorney for property and financial affairs in which she appointed her son, PBC, as the only attorney. At section 8, where there is the option to identify people to be told when the LPA is registered, JMA identified only her sister, JG. The Part B Certificate of understanding was completed by Neil Morris, JMA’s long-standing solicitor and adviser. The LPA was registered on 16^th December 2010.

In October 2010 JMA provided funds of £586 499 for the purchase of 3DR, the property where PBC now lives. Neil Morris explains that “After [RA] died, [JMA] wanted [PBC] to live in a better area.” (180)

On 12^th April 2011 JMA executed a will (149) which:

Some insight into JMA’s approach to her will can be gleaned from the various attendance notes exhibited to statements:

In April 2012, on the sale of a property at 1CC, which JMA owned but her late daughter had lived in, JMA made a gift of £50 000 to PBC “to provide a fund for [PBC] to help maintain the properties” (180). At the same time she made a gift of £15 000 to her sister, JG.

JMA’s estate is currently worth “in the region of £18 650 000” (128). When the application was made, it included her matrimonial home but that has been sold so that, apart from five paintings of significant value, the estate is now entirely held in investments.

It is clear that over a considerable period RA and JMA together and, since RA’s death, JMA alone have taken professional advice about the management of their assets: “both have retained Neil Morris whose specialist area is tax advice for high net worth individuals.” (186)

The gifts made by JMA (as set out chronologically above) are listed by the Applicant in a schedule exhibited to his second statement (241). There is no suggestion of any gifting other than the provision of rent-free accommodation to both PBC and JA during the lifetime of RA but within ten months of RA’s death, JMA gifted to her son the purchase cost of the home where he now lives; and within approximately 3 years, a further £50 000 liquid funds and the beneficial interest in the property at 4SH to the Applicant, and £15 000 to her sister.

An attendance note dated 1^st March 2012 (221) records discussions about the cash gifts in the following terms:

“[JA] died four years ago and her house was now being sold at just over £92 000. You had already agreed that £15 000 from the sale proceeds should go to your sister [JG] and her husband. [Mr. Morris] mentioned that you had very kindly set [PBC] up with his own house and had also given him [4SH]. However, he does not have any cash for maintenance or anything else and it would be kind to give him some money. It was agreed that £50 000 from the sale of the house…should be paid to [PBC]. You said that you had been very remiss when it came to cash where [PBC] was concerned and you had been thinking that you should make some payment to him to set him up financially.”

A subsequent attendance note just over a month later (11th April 2012) (182) is rather different in tone, recording JMA’s confirmation that:

“…£50 000 should be paid to your son [PBC] to give him a fund to support the properties that you have given him. [PBC] has had a lot of money in the past and this will be the last payment to assist him. You wanted to give [PBC] protection when his wife kicked him out some years ago and that was when [4SH] was purchased. [PBC] has to know that this is the end of financial support from you. The balance of sale proceeds should go to your Barclays account.”

Mr Morris puts a gloss on this later attendance note in his second statement (181):

“Although [JMA]…is recorded as saying that that would be the last financial support of [PCB], that was not actually what she meant. Over a period of two years, [JMA] had given [PCB] effectively two properties and £50 000 and she intended to hold back for a period.”

JAA does not accept that Mr Morris’ explanation of the later attendance note is reasonable (289) :

“If my grandmother advised him that she no longer wished to support my Uncle, it is confusing that he is able to infer that this is not what she meant, recollecting events some 4-5 years later.”

A more expansive account of JMA’s gifting is set out in the third statement of Neil Morris (tab 13 of supplementary bundle), dated just 2 days before the hearing. Mr Morris additionally identifies that JMA “gifted each of the six charities listed in [RA’s] will £10 000 each in September 2010.” Copies of the covering letter for each donation, and the Gift Aid form, are exhibited to the statement. Similarly he describes a further gift of £5 000 to JG and her husband, and exhibits a covering letter dated July 2010.

In respect of those persons named in the Residuary Provisions of RA’s will, Mr. Morris provides an account of JMA’s views:

It would appear therefore that JMA’s lifetime gifting from her own assets amounted to some £936 499, most of it to PBC.

The Applicant asserts that both his mother and her late husband RA “took actions to reduce their tax liabilities.” In so far as JMA’s actions are concerned, that assertion is based on two separate matters:

It is to be noted that each of these actions of JMA, in so far as they were concerned with limitation of tax liability, are seemingly focussed on lifetime taxes. The only mention of post-death tax planning appears to be incidental to that focus. The attendance note of 1^st November 2010 records that “transferring the flat to [PBC] would start the seven years running for inheritance tax purposes.” In his second statement Mr. Morris states that JMA “expressed her satisfaction” that if she survived seven years from the gifts of the properties to PBC “that would avoid inheritance tax” but the contemporaneous attendance note is silent as to JMA’s view of the impact on post-death taxes.

The agreement which the parties have come to amongst themselves is complex and multi-faceted. I adopt the helpful summary which Mr. Rees has set out in his position statement:

“It has been agreed (subject to court approval) that the following should be authorised:

(a)

The execution of a statutory will for [JMA]. This replicates [JMA’s] existing will save that:

(i)

It also includes a legacy of £100 000 for the Alzheimer’s Society;

(ii)

It ensures that the amount received by the nine named charities is not less than the amount…..necessary to ensure that the estate is taxed to IHT at the lower rate of 36%; and

(iii)

In the event of the Applicant predeceasing [JMA], [JAA] and the charities must bring into hotchpot any gifts made to them under the court order.

(b)

A gift of £6M to the Applicant;

(c)

Gifts of £50 000 to each of the charities who are named as legatees under the 2011 will, and also to the Alzheimer’s Society;

(d)

A gift of £422 800 to be transferred to the trustees of a discretionary settlement under which [JAA] is the primary beneficiary. The IHT in respect of this gift is to be paid out of [JMA’s] estate;

(e)

Further gifts of certain chattels to the Applicant.

The Applicant has agreed to enter into further agreements (Footnote: ³) under which he covenants with [JAA] and the eight charities named in the 2011 will that he will make a will which provides that if he predeceased [JMA] they will receive the sums that they would have received under [JMA’s] 2011 will had the gift to the Applicant not been made.”

The tax effect of this agreement, if authorised, has been set out in a schedule (Footnote: ⁴) (275). Using rounded figures, if no further gifts are made from her estate during JMA’s lifetime, the inheritance tax liability on her death will be approximately £6 200 000. On the other hand, if the proposed gifts and testamentary provisions are made, the inheritance tax liability will taper from approximately £5 600 000 if JMA were to die today, to approximately £3 million if she lives until March 2025.

The effect of this agreement, if authorised, on JMA herself would be that her available assets reduce to approximately £10 million (229), which is commonly agreed to be more than amply sufficient to meet all her needs. There is no suggestion that she would have any understanding of the proposed arrangements such as might either give her pleasure or cause her anxiety.

Where a person lacks capacity to make a decision in respect of their property and affairs, the powers of the court are set out generally in section 16 of the Mental Capacity Act 2005, and more specifically in section 18. The power to make a gift is set out in section 18(1)(b), and to execute a will in section 18(1)(i).

The exercise of those powers is subject to principles set out in section 1 of the Act, including the requirement at section 1(5) that “An act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in their best interests.”

The meaning of ‘best interests’: As has often been observed, the concept of ‘best interests’ is not defined within the Mental Capacity Act. Instead, at section 4 of the Act, a series of requirements of the decision-maker are set out: the person making the determination (in this case the court)

It is now well understood that the concept of “best interests” is a broad one. For example:

It is less commonly considered but equally beyond serious doubt that the concept of “best interests” is not restricted to “self-interest.” For example:

The determination of ‘best interests’: The Supreme Court decision in Aintree University Hospitals NHS Foundation Trust v. James [2013] UKSC 67 makes it clear that a holistic approach is to be taken to the application of the best interests test:

A holistic approach to determining “best interests” is not, however, a “substituted judgment” test. As Charles J was keen to emphasis in Briggs v. Briggs [2016] EWCOP 53:

Charles J further considered how to approach the balancing exercise, in the context of property and affairs, in Watt v. ABC and the Official Solicitor [2016] EWHC 2532 (COP):

The making of gifts: The parties have identified two authorities which specifically consider the concept of “best interests” in the context of the making of gifts:

On behalf of the Applicant, Mr Rees asserts that the application does not seek to change the ultimate devolution of JMA’s estate. Rather, the Court “is being asked to consider if those persons she wanted to benefit could be in the position of benefitting a bit more in order to get tax saving.” He accepts that the gifts proposed are more substantial than gifts actually made during JMA’s lifetime but explains this on the basis of JMA’s own change of circumstances:

“17… At the time of her husband’s death in 2010 [JMA] was a relatively young widow who had just attained her 64^th birthday. At that point she doubtless looked forward to many years of life still ahead of her. She was not in employment or likely to be so. She was used to a comfortable lifestyle which she needed to fund from her investment income and capital assets. She was understandably concerned to ensure that money was available to meet her expenses when she needed to pay them [Tab 34 p219]. Even then she was willing to make significant gifts to the Applicant (and more modest sums to her selected charities) and was willing to invest her assets in a manner designed to minimise her tax liabilities. Also, at this time a significant part of her wealth was tied up in her house.

18.

The position has now fundamentally changed. Her life expectancy has in all probability been limited by the onset of dementia. The impact of the dementia has also shrunk the boundaries of her world. She is now in permanent residential care and her house has been sold. .. The balance between her overall wealth on the one hand and the funds that she may need to meet her expenditure has shifted, such that there is now (unlike in 2011) a clear surplus capable of being gifted to effect a substantial tax saving without in any way adversely affecting her care or quality of life.”

Mr Rees submits that the proposed arrangements are in accord with JMA’s past wishes and feelings in that they benefit the persons and bodies she selected for benefit in her will; and in accord with the beliefs and values that would be likely to influence her in that she previously demonstrated willingness to structure her affairs in a tax efficient manner. They reflect an agreement reached between interested parties, which is a factor JMA would have considered if she were able to. Where JMA was fully open to the prospect of minimising tax liabilities in the past, and there is the possibility of effecting a very substantial tax saving by accelerating gifts to persons who stand to benefit under her will in any event, it would be “the right thing (Footnote: ⁵)” for the court to approve the gifts proposed.

In respect of RA’s wishes expressed at clause 5 of his will, Mr Rees orally submitted that the best evidence of the extent to which those wishes would now be taken into account by JMA is how she did in fact take them into account in the terms of her own will. When asked, Mr Rees did not accept that the “fundamental change” as to availability of surplus wealth would impact on her consideration not just of when persons may receive benefit from her estate but also of who should benefit, asserting that there is “nothing to justify interfering with what JMA set out in her will.”

Addressing the question posed in District Judge Eldergill’s order, Mr. Rees submits that “it is not surprising that [JMA] did not embark on IHT planning” in the light of her relative youth when she lost capacity but “within those constraints, she did seek tax advice and took steps to deal with her estate in a tax efficient manner.” He submits that “in the absence of evidence that P is going to act in a manner which does not mitigate tax, the default position should be that most people are motivated by a desire to save tax if that benefits their relatives.” He distinguished the taking of “aggressive steps” from the proposals currently under consideration, which he characterised as “plain vanilla” tax planning, “such as any High Street Solicitor would recommend to any client.” The absence of any such steps taken by JMA herself whilst she had capacity does not, Mr Rees says, take the matter out of his ‘default’ approach because of the fundamental change in her circumstances: what is possible now, was not possible when she had an expensive lifestyle and was concerned about meeting her needs. Instead, the matter falls squarely within the ‘default’ approach because of the evidence that JMA was motivated to save lifetime tax where she could, even to the extent of a “slightly esoteric” trust arrangement. Mr Rees accepted that “there are limits” to this default approach, emphasising that the gifts under consideration will still leave JMA with “ten times more than what she needs.”

In respect of the benefit to the recipient of the gifts, Mr Rees submitted that such benefit is a relevant consideration, because benefitting her son, the charities and JAA was something that JMA herself wanted to do. She selected them all for benefit under her will. Her best interests now include consideration of her capacitous wish to benefit these people and bodies. The change of circumstances means that she can accelerate and maximise the benefits she can bestow. In so far as any concern may arise from the magnitude of the proposed gifts, Mr. Rees submitted that “the quantum does not affect the principle.”

On behalf of the Respondent charities, Ms. Rodgers declined the opportunity to make oral submissions. Their written submissions made clear their support of the Official Solicitor’s position.

On behalf of JAA Ms. Watson’s written submissions conceded that the proposed gifts “will not be of any direct financial benefit to JMA” but adopted the Official Solicitor’s submissions as to why they could nonetheless be considered to be in her best interests. In oral submissions, she referred to a “reasonable presumption…that, by benefiting family members in a tax efficient manner, one is also benefitting the Donor.” She relied on “the clear evidence, in the way in which JMA dealt with her property and affairs when she inherited, of her desire especially in difficult times, to see that family members were supported;” and submitted that “if [JMA] were appraised of [JAA’s] circumstances, she would wish to do that for him.”

On behalf of the Official Solicitor acting as Litigation Friend for JMA, Ms. Haren’s first written submission (313) identified the factors relevant to determination of her best interests as:

In her second written submissions (334) Ms. Haren addressed the magnitude of the gifts proposed in the light of JMA’s previous gifting:

“… one cannot infer from the fact that JMA did not make a gift of this magnitude whilst she retained capacity that she had formed a decision never to do so. It is not clear that she was ever given advice about IHT planning in this way and in any event understandable that she should not have contemplated doing so at a time when she was relatively young and healthy.”

And she (cautiously) added to the list of factors in favour of the application, the side agreement reached between the parties:

“..because it means that on JMA’s death the question of who benefits from the assets now in JMA’s estate will be much the same whether or not the gift is made. However, it does not seem to the Official Solicitor that the factor impinges greatly on the assessment of JMA’s best interests. It seems unlikely that, if JMA had retained capacity and was contemplating making a gift of this sort, she would in normal circumstances have been significantly influenced in the decision whether to do so by the possibility that the applicant might predecease her.”

In her third written submissions Ms Haren addressed factors to be taken into consideration in slightly different terms:

In respect of JMA’s comment recorded in an attendance note that the £50 000 cash gift should regarded as “the end of financial support” for the Applicant, the Official Solicitor “considers that it is significant that the gifts made by JMA to PBC at that time served a different purpose from the Proposed Gifts (ie financial support rather than an acceleration of inheritance) and this comment should be seen in that context.” (para 10.1.3)

In respect of RA’s wishes at clause 5 of his will, Ms. Haren notes (para 15) that:

“…JMA discussed with [Mr. Morris] the terms of her husband’s will, expressed some displeasure about at least one member of RA’s family and was advised that she was under no obligation to make the gifts referred to in RA’s will. It therefore seems that JMA did indeed consider the provisions of RA’s will, decided to benefit (both by lifetime gift and by including them in her will) the charities he would have favoured, but not the individuals.”

In her oral submissions Ms. Haren referred to an “assumption that, unless there is evidence to the contrary, most people would choose to maximise inheritance to persons they’ve chosen to inherit their estates.” She confirmed that RA’s death had created no inheritance tax liability for JMA. She pointed to discussions of JMA’s own approach to investment risk (211-12), whereby she chose to leave investments unmoved rather than trigger a tax charge by changing them to suit her own investment preferences, as indicative of JMA’s likely approach to tax planning. She emphasised that the proposed gifts are “once in a lifetime” gifts – the circumstances which now make them possible did not exist before, and will not arise again if the agreement is approved. She agreed with the Applicant that JMA had herself already made a decision in respect of RA’s wish in clause 5 of his will, and that there was no reason to think that the identity of people she wished to benefit had changed.

Affordability: I agree with the Official Solicitor that, where the court is considering the authorisation of gifts, affordability is a “necessary but not sufficient” consideration. The future needs of the protected person must be considered on a cautious basis, and the level of gifting not such as may put in doubt the donor’s ability to meet those needs. I am satisfied that, even though the gifts proposed in this case are very large, they are amply affordable for JMA. If the parties’ agreement is given effect, she will still have at her disposal funds which are more than sufficient to meet her conceivable needs. That in itself is not however sufficient basis to conclude that making the proposed gifts would be in her best interests. There is no expectation on people who retain capacity to make gifts of their surplus wealth during their lifetime, and nor should there be any expectation that it is in the best interests of persons who lack capacity so to do.

Default position/assumption: The purpose of the gifts presently under consideration has always openly been stated as tax mitigation. In support of the parties’ agreement Mr Rees referred to a “default position (Footnote: ⁶)” and Ms. Haren referred to a “reasonable expectation (Footnote: ⁷)” or “assumption (Footnote: ⁸)” in favour of such measures. Similarly, I note that the Official Solicitor in Re KGS referred to a “generalisation. (Footnote: ⁹)” In my judgment, following the exegesis of Charles J in Watts v. ABC , each of these “runs counter to the underlying rationale and purpose of the MCA and, in particular, of its decision and fact sensitive approach to the application of its best interests test in all the circumstances of a given case.”

Mitigation of tax, particularly taxes of inter-generational effect and even by completely lawful “vanilla” means, is a matter on which there may be a range of views. The Mental Capacity Act does not permit the Court to rely on default positions, assumptions or generalisations in making a decision about whether gifts to effect tax mitigation are in the best interests of a particular protected person. The Court must decide the application on nothing more and nothing less than a case-specific application of section 4.

The balancing exercise: In my judgment, the factors weighing in favour and against the making of the proposed gifts from JMA’s estate may be summarised thus:

I have not entered the tax mitigating effect of the proposed gifts as an independent factor on either side of the balance sheet. Payment of tax from her estate after her death will have no direct impact on JMA either way and it is no part of the Court of Protection’s function to protect either an inheritance or a revenue stream. Inheritance tax mitigating effect can in my view only meaningfully be considered in the best interests balancing exercise as a mechanism which either supports or goes against the particular individual’s wishes and feelings, values and beliefs about gifting and tax planning. In the circumstances of this case, I am satisfied that it is subsumed in the positive factor of enhancing benefit to those whom JMA wished to benefit.

JMA herself presently has no discernible wishes in respect of the gifts being proposed or the mitigation of inheritance tax. However, there is clear evidence that she wished in the past to make gifts to her son and charities relevant to her life within the means then available to her; and evidence in the drawing up of her will that she wished to benefit them and her grandson further in due course. Moreover, from the steps she took in respect of the properties which now belong to her son, even if she did not actively turn her mind to post-death tax planning, it is clear that JMA was open to such measures.

On one occasion JMA expressed to her professional adviser a wish that her son should know that financial support from her had reached an end. I do not consider that this implies a decision never to benefit her son again during her lifetime. I prefer the interpretation which Mr. Morris gives, on the basis of an established professional relationship with JMA and also RA. I further accept that JMA’s circumstances have now changed significantly; and that the gifts under consideration are not in the nature of ‘financial support.’ In the balancing exercise, what JMA actually did when she had capacity carries greater weight as a guide to her wishes and feelings than what she is recorded as saying in a single attendance note.

When JMA felt able to make gifts to PBC and favoured charities without jeopardising her ability to meet her own needs, she did so. When opportunities arose, she opted to follow professional advice and minimise her lifetime tax payments. The occasions of both gifting and tax mitigation may have been quite few in number and over a relatively short period of time but I am satisfied that this reflects JMA’s circumstances at the time and, sadly, the early onset of her dementia. The gifts now proposed, in the current circumstances of her life, are in my judgment consistent with the beliefs and values JMA demonstrated when she was able to manage her financial affairs for herself.

RA’s wishes expressed in the Residuary Provisions of his will are a factor which JMA would be likely to consider if she were able to do so. I am satisfied that she has already considered them and made a capacitous decision to make gifts to charities but not (other than by consenting to the release of funds from the inter vivos trust) to any of the individuals. Mr. Morris has given an explanation of JMA’s approach to the individuals, and I find no basis to draw any different conclusion now. I accept the parties’ assertion that JMA’s own capacitous decisions are the best guide to how the Court should consider RA’s wishes in the context of this application. I am satisfied that the proposals reflect JMA’s own considered position in this respect.

The views of other relevant persons as to JMA’s best interests with regard to this proposal are unanimously in favour:

Taking all things into consideration, I am satisfied that the factors in favour of the proposed gifts outweigh the factors against. In the context of the wider agreement between the parties, I am satisfied that the proposals are in the best interests of JMA. I will make orders in the terms of the drafts submitted by the parties.