Briefing

Trusts for disabled beneficiaries

Since 2006, just about the only gift into trust which will be a potentially exempt transfer (PET) rather than an immediately chargeable transfer will be a gift into a trust for the benefit of a disabled beneficiary. The level of disability required is defined in sub-sections (4) to (6) of s89 Inheritance Tax (IHT) Act 1984, and is (at least outside Revenue circles) generally regarded as higher than is necessary or desirable. It is certainly understood to exclude many who would benefit from the assistance and protection of trustees, for example, sufferers of bi-polar disorder, who would not be regarded as incapable of managing their affairs.