Power of attorney

Power of attorney

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Client has power of attorney over her husband's assets. She then sells the assets - has she made the capital gain, or is it her husband? does the power of attorney mean that she has "acquiried" the shares at no gain no loss, or is the power of attorney purely the ability to sell the shares? Legal minds please help!
DK

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By User deleted
14th Aug 2006 11:44

A useful analogy
once given by a continental lawyer was that a power of attorney is like lending your front door key.

You may go in and out, but not drive a furniture van up to the front door and take away the furniture.


He was trying to distinguish between what you could do[your power] and what you should do.

One other point is that the Revenue are very chary about accepting returns signed under a power of attorney.
What they say is:-
"The signature of a Power of Attorney will only be acceptable if
– The taxpayer is physically incapable of signing the return. In which case the signatory must be an attorney acting under a general or enduring power. Note: If the person is merely unavailable to sign the return, for example because of absence abroad, the signature of the attorney will not suffice
Or
– The taxpayer is mentally incapable of understanding the significance of the return. In which case the attorney must be appointed under an enduring power registered with the Court of Protection. In Scotland, an attorney appointed under a power granted on or after 1 November 1990 or a curator bonis may sign the return"

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By Euan MacLennan
14th Aug 2006 09:53

Husband's gain
As you said in your first sentence, they are the husband's assets; the wife merely has the legal right to deal with them on behalf of her husband. She would only have acquired them on a "no gain/no loss" basis if her husband had given her the assets. I suppose that she might have exercised her power of attorney to give her husband's assets to herself and then sold them in her own name, but this would be very contorted!

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By AnonymousUser
14th Aug 2006 10:34

Belongs to husband.
However, if she had expenses of handling his affairs, and he did not reimburse her for these expenses, there may be some way to recoup those expenses on her tax return. Does anyone know whether expenses she incurs would be allowable, and if so, against what schedule?

Assuming they are not allowable, she should seek to be reimbursed for those expenses from her husband, and her husband can add these costs to the basis for his capital gains/losses as costs of sale expenses related to the sale of the shares.

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