I have started acting for a trust which appears to be set up with a view to using the vulnerable beneficiary rules for tax purposes. This trust owns a property which is occupied by the disabled beneficiary and the trust receives rent benefit from the local authority. Does anyone know if this is a valid structure? It does not feel right that rent benefit could end up being paid to the beneficiary occupying trust property
Hello,
(3)(e) The Housing Benefit (General) Amendment (No. 2) Regulations 1998 does exclude payments to trusts if the cliamant is a beneficary.
However the legislation then states: (1B) Sub-paragraphs (e) and (g) of paragraph (1) shall not apply in a case where the person satisfies the appropriate authority that the liability was not intended to be a means of taking advantage of the housing benefit scheme.
If the trust was established bona fide to protect a venerable adult I’d suggest you meet the legislation requirements based on the “valid structure” question you pose.
Is it right? Would fall on - “satisfies the appropriate authority”.
Richard C. Bishop
PFEP
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