Personal Injury Trust

by **dmplondon** on Fri Apr 30, 2010 5:00 pm

It must be Friday afternoon...

Simplest revocable declaration of Trust has been made in setting up a Personal Injury Trust (i.e. settlor has received a sum of money following personal injury and beneficiary is the settlor)

"The Trustees shall hold the capital and income of the Trust Fund UPON TRUST for the Beneficiary absolutely"

Unless I've really had enough this week I read that as a 'simple' bare trust (as Beneficiary is absolutely entitled). Am I missing something?

If so, is the effect of this Trust purely to remove the Trust assets from being taken account of for benefits, etc. purposes? For all other purposes (e.g. tax) the assets are treated as the beneficiaries and income and gains are returned on his tax return (and not a Trust return) and I don't need to worry whether it meets the CGT/IHT definitions of trust for vulnerable beneficiary, etc.

by **Lee Young** on Fri Apr 30, 2010 5:28 pm

It is Friday afternoon but you are still functioning properly. It is a bare trust and its purpose is solely to take the assets out of account when looking at certain means tested benefits. It has no tax benefit. For tax the assets belong to the settlor/beneficiary.

by **maths** on Fri Apr 30, 2010 10:48 pm

I know very little of the rules re means tested benefits but a bare trust surely cannot help in any way in this regard unless by way of non-disclosure?

by **Lee Young** on Sat May 01, 2010 12:03 pm

Bizarre as it might sound all that is needed to shield both the capital and income of aperosnal injury payout from being taken in to account when considering mean tested benefits is that it is held "in trust". A bare trust is sufficient - use them all the time with my clients. Amazing these rules have not been reversed.

by **maths** on Sat May 01, 2010 12:16 pm

Thanks. You live and learn!

by **dmplondon** on Tue May 04, 2010 9:53 am

Many thanks.

Just goes to show that some things that give you the 'that can't be true' response can be. What a strange set-up for the benefits laws, then.

by **kckanlaw** on Wed Jan 05, 2011 3:04 pm

you can take help of Mckyton Law firm they will help you out
Thanks

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