Q&As

How effective is a trust for a disabled beneficiary, on such terms as to fall into section 89 of the Inheritance Tax Act 1984, to protect assets from means-tested benefit assessments?

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Published on LexisPSL on 26/04/2021

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • How effective is a trust for a disabled beneficiary, on such terms as to fall into section 89 of the Inheritance Tax Act 1984, to protect assets from means-tested benefit assessments?
  • The type of disabled persons trust
  • The source of the funds

How effective is a trust for a disabled beneficiary, on such terms as to fall into section 89 of the Inheritance Tax Act 1984, to protect assets from means-tested benefit assessments?

We cannot provide advice on this specific scenario although the following points are relevant to the question of whether assets held within a trust for a disabled beneficiary under section 89 of the Inheritance Tax Act 1984 (IHTA 1984) are likely to be taken into account in an assessment for means-tested benefits.

The type of disabled persons trust

A trust for disabled persons under IHTA 1984, s 89 can either be discretionary or can grant a life interest for the disabled beneficiary (see Practice Note: Taxation of trusts for disabled persons—IHT for further guidance on

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