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Disabled Person’s Trusts

 

Our team of specialists are highly experienced in the area of Trusts and can help you understand your options, as well as setting up the Trust effectively.

What is a Disabled Person’s Trust (DPT)?

A DPT is a Trust set up to specifically benefit a ‘disabled person’ and is largely discretionary in its nature which means the Trustees are in control of how the Trust will be administered.

For the purposes of a DPT, a disabled person is defined as someone who is:

  • By reason of mental disorder, within the meaning of the Mental Health Act 1983, incapable of administering their own property or managing their own affairs; or
  • In receipt of Attendance Allowance; or
  • In receipt of Disability Living Allowance (DLA) by virtue of entitlement to the care component at the highest or middle rate or, in receipt of Personal Independence Payment (PIP) at the standard or enhanced rate for ‘daily living activities’.

The main advantage of a DPT over a Discretionary Trust is the favourable tax treatment it receives for Inheritance Tax, Income Tax and Capital Gains Tax. There are other criteria that need to be met to comply with the rules for a DPT and our lawyers can discuss these with you in detail to establish if this type of Trust is right for you and your family.

Alternative options

You may wish to consider an alternative type of Trust for your circumstances. A Discretionary Trust is one where the beneficiaries do not have any fixed entitlement to receive money from the Trust, and the Trustees have complete flexibility. Find out more here.