The following Trusts and Inheritance Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
A disabled person’s interest is a disabled person’s entitlement to property held in trust. The entitlement could be discretionary or fixed. It is usually created by another person for his benefit but could also be created by himself.
A trust for a disabled person receives special inheritance tax (IHT) treatment whether created during a lifetime or following a death.
The definition of a ‘disabled person’ includes someone who:
For the full definition, see the Disabled and vulnerable beneficiary trusts ― uniform definitions guidance note.
A disabled person’s interest (DPI) is a qualifying interest in possession (QIIP). See the Qualifying interest in possession guidance note.
For IHT purposes, this means that he is treated as if he owns the underlying trust property, with the following consequences:
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