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Introduction

It has long been recognised that special concessions are appropriate where property is held in trust for the benefit of a person who is unable to manage his financial affairs. Broadly, these concessions aim to treat the trust property as if it was owned outright by the individual, instead of applying special trust tax rules to it.

Concessions have been introduced piecemeal with the result that the qualifying definitions and conditions were not consistent and at times contradictory.

The Finance Act 2013 (and, for Scotland, the Social Security (Scotland) Act 2018) introduced amendments across the board to the tax legislation dealing with trusts for disabled persons and other vulnerable beneficiaries.

In summary, the amendments:

1. •

   updated the definition of a disabled person and applied it to all the relevant provisions

2. •

   harmonised the qualifying conditions for all such trusts

Special trust provisions for disabled persons and vulnerable beneficiaries

The provisions which are affected by these definitions are:

Inheritance tax

1. •

   trusts for bereaved minors ―