Trusts for vulnerable persons—Scotland
Produced in partnership with Peter Murrin of Turcan Connell
Trusts for vulnerable persons—Scotland

The following Private Client practice note produced in partnership with Peter Murrin of Turcan Connell provides comprehensive and up to date legal information covering:

  • Trusts for vulnerable persons—Scotland
  • What is a trust for (or with) a vulnerable beneficiary?
  • Who is a vulnerable beneficiary?
  • Trusts for bereaved minors
  • Trusts for disabled persons
  • What is required for the trust to qualify?
  • Time of trust formation
  • Trusts for bereaved minors
  • Trusts for disabled persons
  • Drafting requirements and considerations
  • More...

What is a trust for (or with) a vulnerable beneficiary?

A trust for a vulnerable beneficiary will fall into one of two categories:

  1. a disabled person's trust; or

  2. a trust for a bereaved minor (referred to as ‘relevant minors’ in statutory provision)

A trust that meets the conditions for both will be treated as a disabled person's trust, which will allow it to continue after the beneficiary reaches legal majority.

What distinguishes a trust for a vulnerable beneficiary is often its purpose. Such trusts are commonly regarded as administrative. The focus is on affording the protections of a proper settlement but without the sometimes weighty tax implications. It is for this reason that the tax legislation relative to these trusts aims, broadly, to make the trusts transparent for tax—similar in effect to a bare trust.

That can be the effect but, inevitably, and often, it is not that straightforward legally and administratively.

Who is a vulnerable beneficiary?

A person will qualify as a vulnerable beneficiary either as a disabled person or a bereaved minor. Relevant definitions are to be found in sections 23, 38, 39 and Schedule 1A of the Finance Act 2005 (FA 2005).

Trusts for bereaved minors

A bereaved or relevant minor is a person under the age of 18 where one or both of their parents have died.

Trusts for disabled persons

A disabled person is a person who by reason

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