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The wrong sort of disability

27 July 2006 / Robin Williamson
Issue: 4068 / Categories: Comment & Analysis , Inheritance Tax , Trusts
Disabled trusts: what is the latest position? ROBIN WILLIAMSON reports.

FEW CAN HAVE missed the constant coverage in both national and professional press of the Finance Bill proposals tightening up the inheritance tax rules on trusts. Throughout the proceedings the Low Incomes Tax Reform Group (LITRG) has voiced one concern: how will the new rules affect the position of disabled people who are beneficiaries of trusts?

As is well known the Government's proposals involved bringing most life interest and accumulation and maintenance settlements within the charging provisions applicable to discretionary trusts. Disabled trusts governed by IHTA 1984 s 89 were to be excepted.

During proceedings on the Finance Bill the LITRG together with a wide-ranging coalition of mental health charities and tax law and accountancy professional bodies briefed Opposition parties on the downside of the Government's detailed proposals. Our main objections were threefold:

  • Under the original proposals in the Bill...

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