What is a trust for a bereaved minor?

The special category of ‘trusts for bereaved minors’ (TBM) (sometimes called ‘bereaved minor’s trusts’ (BMT)) was introduced by Finance Act 2006 to provide inheritance tax (IHT) concessions for trusts in favour of children with a deceased parent. Before 22 March 2006, such trusts would have been included within the more wide-ranging accumulation and maintenance (A&M) regime, but no new A&M trusts can be created after that date (at least not with favourable IHT treatment). See the Accumulation and maintenance trusts guidance note. TBMs have a more limited application. Except in rare circumstances explained below, they are created on the death of a parent for the benefit of their minor children.

Typically, trustees have the power to accumulate income and to apply capital for the benefit of the beneficiary. Therefore they are of a discretionary nature, although it is also possible for TBM beneficiaries to have an interest in possession.

A bereaved minor is a person who is under the age of 18 years where at