HMRC SDLT: SDLTM31910 – Application -General Powers of Attorney

General Powers of Attorney

This section of the HMRC internal manual provides guidance on the application of General Powers of Attorney. It outlines the principles and concepts necessary for understanding their use within legal and financial contexts.

• Definition and scope of General Powers of Attorney.
• Legal implications and responsibilities involved.
• Procedures for establishing and revoking authority.
• Guidance on documentation and record-keeping requirements.
• Compliance with relevant laws and regulations.

General Powers of Attorney

Understanding General Powers of Attorney

A General Power of Attorney is a legal document that allows one person (known as the ‘attorney’) to act on behalf of another person (the ‘principal’). This arrangement is used for a variety of reasons, such as handling financial affairs or making important decisions when the principal is unable to do so themselves. It’s important to note that the term ‘general’ refers to the specific legal framework established by the Powers of Attorney Act 1971 in England and Wales, not to the extent of the attorney’s power.

Key Differences by Country

– England and Wales: The term ‘General Power of Attorney’ is specifically defined under the Powers of Attorney Act 1971. It contrasts with other types of powers, such as Lasting Powers of Attorney, which are designed for situations where a person may lose mental capacity, and Enduring Powers of Attorney, which were superseded by Lasting Powers of Attorney but were previously used for similar purposes. Importantly, having a General Power of Attorney does not mean the attorney has unlimited authority to act on behalf of the principal. The range of powers given can be specifically outlined in the document.

– Northern Ireland: The laws regarding General Powers of Attorney are similar to those in England and Wales, as the Powers of Attorney (Northern Ireland) Order 1971 serves the same function. Again, the term ‘general’ is used in a statutory sense, not implying all-encompassing authority.

– Scotland: In Scotland, the legal framework is slightly different. A General Power of Attorney is established under common law, which allows for either individuals or organisations to be given authority to manage someone’s affairs. Here, the extent of an attorney’s powers can be defined in a deed, which may cover specific areas of the principal’s life or provide broader authority across multiple matters.

Defining the Powers Granted

When setting up a General Power of Attorney, it is essential for the parties involved to specify what powers are conferred. This means the document may grant broad or limited authority depending on the individual’s needs.

– Tailored Powers: Often, the powers granted are designed to meet specific needs, such as:
– Handling bank transactions
– Managing rental properties
– Selling or buying assets
– Making healthcare decisions, though this is generally covered better under Lasting Powers of Attorney.

The intention is for the principal to clearly define what the attorney can and cannot do, ensuring that the legal responsibilities are understood by both parties.

When to Use a General Power of Attorney

There are many scenarios in which a General Power of Attorney might be useful, including:

– Travel: If a person will be travelling abroad and may need someone to manage their financial affairs while away.
– Illness: In cases where an individual may be temporarily incapacitated due to illness and needs someone to manage their day-to-day affairs.
– Convenience: For individuals who wish to delegate their financial responsibilities or decision-making processes to someone they trust for efficiency.

Limitations of a General Power of Attorney

While a General Power of Attorney offers flexibility, there are some limitations to be aware of:

– It typically becomes invalid if the principal loses mental capacity. In such cases, a Lasting Power of Attorney is more suitable as it is specifically designed to remain effective under those circumstances.
– It cannot be used for certain specific legal actions, such as making a will or making decisions about medical treatment, unless additional legal powers are explicitly included in the agreement.

Legal Requirements and Creation

For a General Power of Attorney to be valid, certain legal requirements must be met:

– Written Document: The document must be in writing and signed by the principal.
– Capacity: The principal must have the mental capacity to understand the implications of granting authority to another person.
– Specified Powers: The powers granted should be clearly written out to avoid any confusion regarding what authority is given.

An example of the wording might be: ‘I, [Principle’s Name], hereby appoint [Attorney’s Name] to act on my behalf in all financial matters, including managing my bank accounts, paying bills, and buying or selling property.’

Revoking a General Power of Attorney

A General Power of Attorney can be revoked at any time, provided the principal still has the mental capacity to do so. The revocation must be made in writing and communicated clearly to the attorney and any third parties who may be relying on the power of attorney. Once revoked, the attorney’s authority ceases immediately.

– If a principal wants to revoke the Power of Attorney, they should consider the following steps:
– Draft a clear revocation document that states the original Power of Attorney is no longer valid.
– Inform the attorney as well as any institutions or organisations that might have relied on the Power of Attorney.

When Professional Advice is Recommended

Creating a General Power of Attorney is a significant decision, and it may be beneficial to seek professional legal advice to ensure that the document is properly drafted and meets all legal requirements. This can help prevent potential misunderstandings or disputes later.

Consider consulting a solicitor or a legal advisor if:

– You have complex affairs or assets that need to be managed.
– You plan to include special provisions in the Power of Attorney.
– You want to ensure that the document complies with all applicable laws and regulations.

Final Thoughts on General Powers of Attorney

A General Power of Attorney is an important legal tool that enables individuals to manage their affairs through a trusted attorney. By clearly outlining the powers granted and understanding the rights and limitations involved, principals can ensure that their needs are met and that their interests are protected.

For more detailed information on specific scenarios and further guidance, you can visit the appropriate resources or legal advice services available.

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