Confidentiality when dealing with the customer: disclosure to agents, representatives and third parties: disclosure with ‘power of attorney’: general (all jurisdictions)
What is a power of attorney?
Where a customer is unable to directly deal with their own affairs they may decide to provide a third party with authority to act on their behalf. A power of attorney is a legal document whereby a person (the ‘donor’) gives another person (the ‘attorney’ or ‘donee’) this authority.
An ordinary or general power of attorney
Ordinary powers of attorney (known as general powers of attorney in Scotland and Northern Ireland) are used by individuals who are able to conduct their own affairs but where, for practical reasons, they need someone else to act on their behalf. In these documents the individual granting the power will be known either as the donor or the granter; the person receiving the power is the attorney.
An ordinary or general power of attorney can be effective for a specified period of time (perhaps to cover a trip abroad by the donor/granter) or can run indefinitely until the donor/granter decides to bring it to an end by issuing a Deed of Revocation. If the donor/granter becomes mentally incapacitated whilst an ordinary or general power of attorney is in effect, then the authority granted by the document is automatically revoked.
An ordinary/general power of attorney can provide a general authority to deal with all the donor/granter’s affairs or it can be in respect of specific matters, such as a house purchase or sale.
Because the donor/granter will be legally competent, an ordinary or general power of attorney does not need to be registered with the Office of the Public Guardian or Court of Protection.
Procedure to follow - ordinary power of attorney
The Powers of Attorney Act 1971 sets out the documentation necessary to prove power of attorney. This must either be the original copy of the power of attorney or a certified copy of it. A copy is certified, according to section 3 of the Act, if it is certified as a true and complete copy on every page by
- the donor of the power,
- a solicitor or
- a stockbroker.
The authorised person should sign each page of the copy to certify their verification.
In accordance with these requirements, any documentation presented to you should therefore be either the original document or a certified copy as specified by the Powers of Attorney Act.
Such proof of power of attorney is required by most financial institutions, such as banks, before details of an account can be disclosed. Any request for this level of proof by you should not therefore present problems.
Once you are satisfied that the attorney has the donor/granter’s authority to deal with their financial affairs, you should take a copy of the documentation for your file. You may then disclose to the attorney any information that could have been provided to the donor/granter.
Please note that in these cases the customer also retains his or her right to deal with their own affairs and so you may continue to disclose information to the customer in the usual way.
Deceased taxpayers - powers of attorney for repayments from estates
A power of attorney can be used by a trust or other organisation to obtain a repayment on behalf of a deceased person’s estate. In such cases an ordinary (or general) power of attorney must be signed by the deceased’s personal representative, as defined at IDG30470onwards.
If a Trust has been authorised by a power of attorney to obtain a repayment you should:
- Ensure that the form has been correctly completed as described above, and;
- Take action as described in IDG30472 concerning the supply of information to personal representatives or their appointed agents.
As in most cases the documentation supplied can be verified from HMRC’s own records, it should not usually be necessary to ask the trust for further information.
Powers of attorney for incapacitated individuals
In addition to an ordinary or general power of attorney, it is possible to make provision for when an individual becomes incapacitated and unable to conduct their own affairs; for the most part these will be instances where there is mental impairment. The rules covering this type of power of attorney vary between England & Wales, Scotland, and Northern Ireland, details of which are set out below. But each administration will have the following common features:
- All require a power of attorney for incapacitated individuals to be registered with either a public guardian or a specialist court. If they are not registered they have no validity and you should not provide any HMRC data.
- Any amendments to the power of attorney should have been notified to the public guardian or court. The guardian or court will either have annotated the document to show they have seen and approved the amendment, or will issue a replacement document showing the revised powers. If you have any doubts about the authenticity of documents presented to you, take advice from the Information Strategy Team.
- Any documentation presented to you should be either the original document or a certified copy as specified by the Powers of attorney Act. Specific guidance for the different administrations is set out below.
- As the authority of attorneys can vary, you should always ensure that they have instructions to deal with the customer’s financial affairs. If you have any doubts, do not release any data until you have taken advice from the Information Strategy Team.
- On receipt of the power of attorney you should process the document as a matter of urgency. This is because the attorney will require the document(s) in order to validate their authority with other financial institutions also requiring sight of them. Updating our systems promptly will also ensure that repayments etc are not sent to the wrong person.
- Before returning the document(s) you should always take a copy for your file which should be noted to the effect that you have had sight of original documents or an appropriately certified copy.
- In all circumstances, if the donor/granter dies, the power of attorney is immediately revoked and is replaced by normal probate rules; no further HMRC data should therefore be supplied to the attorney under the authority of the power of attorney.
Procedural instructions according to locality
If you are dealing with a power of attorney and are unsure how to proceed, please contact your Data Guardian.