Tax on discretionary trust

[topsails]

My adult daughter has a learning disability. Ive set up a discretionary trust and hoped that she would continue to get incapacity benefit plus, at discretion of trustees, receive income on capital they invested on her behalf - without having to pay too much tax. I've since learned that the trustees will have to pay 40% on any income. Other people think the trustees may be able to claim any tax paid back because of her incapacity.

Another website indicates the only way to avoid this punitive level of tax is to occasionally release the capital to her rather than interest.

Any advice would be tremendously appreciated.

many thanks

[Lee Young]

If your daughter is not a higher rate tax payer then some or all of the 40% tax paid by the trustees can be reclaimned by her.

[topsails]

Lee Young. Many thanks for responding. Topsails