As announced in the Government’s Autumn Statement in 2013,
last month’s Budget confirmed that, from 5 December 2013 the
Government will remove what has been a significant capital gains
tax downside which applied on the death of the vulnerable
beneficiary of certain types of disabled person’s trust.
Prior to 5 December 2013, on the death of the vulnerable
beneficiary, the value of the assets in the trust was not uplifted
for capital gains tax purposes, leading to potentially significant
future capital gains tax liabilities on the disposal of assets of
the trust. This uplift will now apply to all qualifying trusts for
vulnerable beneficiaries and this change is greatly welcomed. In a
separate change, the Chancellor also confirmed that the definition
of disabled beneficiary will be extended to include those who are
entitled to the mobility element of Disabled Living Allowance and
the new Personal Independence Payment.
The Government has also announced that from 2014 to 2015 the range
of trusts which qualify for the special income tax, capital gains
tax and inheritance tax treatment will also be extended although it
is not clear at this stage what form this extension will take.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.