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What are the tax advantages of a trust for a disabled (adult) child in a Will as opposed to a normal discretionary Will trust?

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Published on LexisPSL on 18/01/2018

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  • What are the tax advantages of a trust for a disabled (adult) child in a Will as opposed to a normal discretionary Will trust?

What are the tax advantages of a trust for a disabled (adult) child in a Will as opposed to a normal discretionary Will trust?

The legislation governing disabled persons’ trusts is set out in sections 89, 89A, 89B and 89C of the Inheritance Tax Act 1984 (IHTA 1984). Following Finance Act 2006, there are essentially two main varieties of disabled trusts which can be established—a discretionary trust and a life interest trust. We assume from your question that you are referring to a discretionary disabled trust under IHTA 1984, s 89.

Providing the trust satisfies the qualifying conditions under IHTA 1984, s 89 and the disabled person qualifies as such at the time when the property is transferred into the

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