Q&As

What test applies for determining whether someone is 'incapable of administering their property or managing their affairs' for the purposes of establishing whether a beneficiary suffering from a mental disorder would qualify as disabled for tax purposes?

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Produced in partnership with Ward Hadaway
Published on LexisPSL on 06/05/2016

The following Private Client Q&A produced in partnership with Ward Hadaway provides comprehensive and up to date legal information covering:

  • What test applies for determining whether someone is 'incapable of administering their property or managing their affairs' for the purposes of establishing whether a beneficiary suffering from a mental disorder would qualify as disabled for tax purposes?

What test applies for determining whether someone is 'incapable of administering their property or managing their affairs' for the purposes of establishing whether a beneficiary suffering from a mental disorder would qualify as disabled for tax purposes?

This answer is limited to the definition of a disabled beneficiary for inheritance tax (IHT) and does not consider the definition or implications for taxation in relation to income tax or capital gains tax.

It is also assumed that the question relates to the settlement into trust of funds for the disabled person.

Following the changes brought about by the Finance Act 2006, most settlements created by a settlor during their lifetime are relevant property trusts for the purposes of IHT and certain trusts created by Will also fall into the relevant property regime. Therefore, for the most part, lifetime gifts into settlements are immediately chargeable transfers on which the settlor will be charged to IHT at the

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