NEWS
They come up throughout the year: birthdays, weddings, religious celebrations, anniversaries, charitable donations, inheritance planning, property transfers, financial support for family members, and sentimental gifts made during a person’s lifetime.
Gifts are not just a Christmas issue.
They come up throughout the year: birthdays, weddings, religious celebrations, anniversaries, charitable donations, inheritance planning, property transfers, financial support for family members, and sentimental gifts made during a person’s lifetime.
Sometimes the gift is small and familiar. Sometimes it is substantial: money, jewellery, a vehicle, a share in a property, or even the person’s home.
That is when the question becomes more serious: Does the person have the mental capacity to make this specific gift, at this specific time?
Independent, decision-specific mental capacity assessments can provide evidence where there is a reason to question capacity for a proposed gift. The question, relevant legal framework and evidence should be agreed with the instructing professional; an assessment does not itself authorise the transaction.
Capacity to make a gift means the person can understand the nature and effect of giving something away.
This is not about whether other people agree with the gift. It is not about whether the gift seems generous, unusual or unwise. A person is allowed to make a decision that others consider unwise, provided they have capacity to make that decision.
The Mental Capacity Act 2005 guide explains understanding, retention, use or weighing, communication and the causal requirement for an inability under the Act in England and Wales. Lifetime gifts also engage common-law principles, including Re Beaney, so the assessor and legal adviser should identify the applicable question for the particular transaction.
For gifting decisions, the relevant information usually includes:
The larger or more unusual the gift, the more careful the assessment needs to be.
The leading authority on capacity to make lifetime gifts is Re Beaney [1978].
The key principle is that the level of understanding required depends on the size and nature of the gift in the context of the person’s overall assets. The Law Society summarises the position clearly: a small or trivial gift may require a lower degree of understanding, but where the gift disposes of the donor’s only valuable asset or affects how their estate will pass, the person may need a level of understanding similar to that required for making a will.
That means there is a major difference between:
A small customary gift may be straightforward. A substantial lifetime gift may warrant legal advice and, where there is a reason to doubt capacity, suitably focused assessment evidence. Value alone does not establish incapacity.
Yes, sometimes.
A diagnosis of dementia, acquired brain injury, learning disability, mental illness or cognitive impairment does not automatically mean a person lacks capacity to make a gift.
Capacity is not decided by diagnosis alone. It is decided by looking at whether the person can make the particular decision in question.
For example, someone may not be able to manage all their finances independently but may still understand a simple, affordable gift to a close family member. Equally, someone may appear socially confident but be unable to understand the consequences of transferring a large sum of money or giving away property.
That is why gifting capacity should be assessed in the real-world context of the proposed gift.
Where the wider issue is whether the person can manage money, bank accounts, bills or broader financial affairs, a mental capacity assessment to manage finances may also be relevant.
There is an important distinction between:
If the person has capacity to make the gifting decision, they should usually make the decision themselves.
If the person lacks capacity, an attorney or deputy may only make gifts within strict limits. Current Office of the Public Guardian guidance says deputies and attorneys have limited powers to make gifts, and that gifts must be reasonable, affordable and in the person’s best interests. The guidance also says the person’s capacity to understand the gifting decision should be considered before a gift is made.
For a property and financial affairs LPA, section 12 of the Mental Capacity Act 2005 limits an attorney’s gifting power: gifts on customary occasions may be made to people related or connected to the donor, and gifts may be made to charities the donor supported or might have supported, provided the value is reasonable in the circumstances. Deputies must check the wording of their court order; the powers are not automatically identical.
Examples of customary occasions can include birthdays, weddings, civil partnerships, Christmas, Eid, Diwali, Hanukkah and Chinese New Year.
Christmas is therefore one example of a wider issue: the occasion, recipient, value, available authority and the person’s circumstances all matter.
Some gifts go beyond what an attorney or deputy can safely authorise.
The Office of the Public Guardian states that any gift or transfer of real property, including land, a house or a share in a property, is almost certainly outside the powers of a deputy or attorney and is likely to require Court of Protection permission.
Court approval may also be needed where:
Where a Court of Protection application is being considered, a COP3 mental capacity assessment may be needed to provide clear, decision-specific evidence.
Where the proposed gift overlaps with estate planning or a statutory will application, our Statutory Will Assessment Package may also be relevant.
Property gifts require particular care.
A gift of property may include:
These decisions can significantly affect the person’s estate, care funding position, future security and the expectations of beneficiaries.
Where the proposed gift involves a home, land or ownership interest, a mental capacity assessment to buy, sell or transfer property may be appropriate. Nellie Supports’ property capacity service expressly covers property decisions including gifting an interest in property.
Gifting concerns often arise in LPA cases.
Sometimes a person wants to make a Lasting Power of Attorney and also express preferences about gifts, family support or charitable donations. Sometimes an attorney is already acting and wants to know whether they can continue the person’s usual pattern of gifting.
It is important to understand that an LPA cannot simply give attorneys unlimited gifting powers.
The Office of the Public Guardian guidance explains that preferences and instructions in an LPA must be read in the context of the Mental Capacity Act. A person making an LPA can restrict an attorney’s powers, but cannot expand gifting powers beyond what the law allows.
If there is uncertainty about whether someone can make an LPA, Nellie Supports provides mental capacity assessments to grant a Lasting Power of Attorney.
Consider whether there is a reason to doubt capacity for this gift, whether support would help and whether legal or safeguarding advice is needed. Factors that may call for further enquiry include:
Where the matter is complex, disputed or high value, clarify what additional evidence is needed before choosing a report. An Enhanced Mental Capacity Assessment is one service option; the label itself does not determine evidential quality, legal validity or the outcome of a challenge.
A good gifting capacity assessment should not simply ask, “Do you want to give this gift?”
It should explore whether the person understands the decision properly.
This may include assessing whether they understand:
A mental capacity assessor should also consider what support the person needs to take part in the assessment. This might include simplified explanations, adjusted timing, communication support, visual information, family context or solicitor input where appropriate.
Sometimes concerns only arise after the gift has already happened.
This might be after a large bank transfer, a property transfer, a change in ownership, or after the person has died and beneficiaries discover that substantial assets were given away during their lifetime.
In those cases, the question may become: Did the person have capacity to make the gift at the time it was made? That is a retrospective question.
Retrospective Mental Capacity Assessments provide an opinion about a past decision using the available contemporaneous evidence, such as medical records, care notes, solicitor files, correspondence, bank records and witness accounts. Missing or conflicting records may limit the conclusion; a later assessment cannot recreate a past interview.
This can be particularly important in probate disputes, financial abuse investigations, contested estates and challenges to lifetime gifts.
Large lifetime gifts can overlap with inheritance issues.
If a person gives away a major asset during their lifetime, that gift may alter what is left in their estate. It may also affect people who expected to benefit under a will or intestacy.
That is why Re Beaney is so important. Where the gift effectively changes the destination of the person’s estate, the level of understanding required may become closer to the understanding needed to make a will.
For more detail on the will-making test, Nellie Supports has a guide to Banks v Goodfellow, the leading authority on testamentary capacity.
Gifts can be meaningful. They can preserve relationships, reflect a person’s values, and allow someone to continue patterns of generosity that have mattered to them throughout life.
But gifts can also create risk.
A gift may later be challenged, whether or not a formal assessment was obtained. Capacity evidence can be relevant, but it does not resolve every issue of validity, pressure, authority or financial abuse. Attorneys and deputies must act within their powers, and solicitors may need further evidence before completing a transaction.
A clear assessment can help protect:
The aim is not to stop people making gifts.
The aim is to make sure the person’s decision is properly understood, properly supported and properly evidenced.
If you are unsure whether a loved one, client or protected party can make a gift, the safest step is to get advice before the gift is made.
Nellie Supports provides independent, decision-specific assessments in England and Wales. Its published professional standards and court credentials explain the practice’s approach. Suitability for a gifting instruction depends on the applicable legal question, assessor expertise, available evidence and any court requirements.
You can contact Nellie Supports to clarify the question, evidence, assessor and scope before deciding whether to commission a report. For the current rules on gifts by attorneys and deputies, see the Office of the Public Guardian’s guidance: https://www.gov.uk/government/publications/giving-gifts
For more background reading, visit our Guides and Resource Directory.
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Mental Capacity Act Code of Practice
Published 6 May 2026
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