A client has asked me to set up a disabled person’s trust fund in her will for her youngest son who is 46 and severely autistic. But she wants the trustees to have the power to revoke the trust if it gets too much for them. What would be the tax consequences if they are able to revoke the trust?
Hi Jane,
To qualify, the terms of the DPT would have to “secure” (IHTA84 s.89(1)(b)) that if any of the trust property were applied during the life of the VP, it would have to be applied for the benefit of that VP (subject to the powers and the de minimus amounts in s.89C). So, as I see it, to all intents and purposes, for the trust to be “revoked”, it would need to be wound up in favour of the VP.