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Disabled/Vulnerable
Persons Trust

Daisy Graphic
Daisy Graphic
Daisy Graphic

This trust is used to protect those who are incapable of looking after their own financial affairs. For such individuals, a trust can be a way of ensuring they can maintain their quality of life while protecting their means-tested benefits.

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It qualifies for reductions in income tax and capital gains tax. It also qualify for exemption from Inheritance tax in some situations.

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The trust must be one where:

  • the trust was set up before 8 April 2013 and at least half of the payments from the trust go to the disabled person; or

  • the trust was set up on or after 8 April 2013 and all payments go to the disabled person, except for up to £3,000 per year (or 3% of the assets, if that's lower), which can be used for someone else’s benefit;

  • the trust was set up when someone who suffers from a condition that's expected to make them disabled sets up a trust for themselves.

Who qualifies as a vulnerable beneficiary?

A vulnerable beneficiary is either someone under 18 whose parent has died or a disabled person who is eligible for any of the following benefits (even if they do not receive them):

  • Attendance Allowance

  • Disability Living Allowance (either the care component at the highest or middle rate, or the mobility component at the higher rate)

  • Personal Independence Payment (PIP) at the standard or enhanced rate for 'daily living activities'

  • An increased disablement pension

  • Constant Attendance Allowance

  • Armed Forces Independence Payment

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A vulnerable beneficiary can also be someone who is unable to manage their own affairs because of a mental health condition.

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