We have a disabled person’s trust where the trustees have power to accumulate the income, rather than to pay this to the beneficiary. It is intended for income to be accumulated, so as to not affect the beneficiary’s entitlement to means tested benefits.
My understanding is that if a vulnerable person election is made, the income that is accumulated is treated as if it had been income received by the beneficiary himself and therefore charged at his marginal rate, and not the higher rate tax of 39.35%/45%? Can anyone confirm my understanding is correct?
Thanks
Ihsan Ali
I Will Solicitors Ltd