The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The special category of ‘trusts for bereaved minors’ (TBM) was introduced by Finance Act 2006 to provide 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. 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 his or her 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 and at least one of whose parents has died.
For these purposes, ‘parent’ includes a step-parent or a person with parental responsibility.
Property that is held in a trust for bereaved minors is not subject to the relevant property regime of principal charges and exit charges.
There is no inheritance tax charge as a result of:
the bereaved minor attaining the age of 18 or becoming absolutely entitled to the trust property under that age
the death of the bereaved minor under the age of 18
the trust property being paid or applied for the benefit of the bereaved minor
IHTA 1984, s 71B(2)
There is a trust for a bereaved minor where property is
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