Inheritance Tax Act 1984 section 89B

Meaning of "disabled person's interest"

Section 89B defines what constitutes a "disabled person's interest" for inheritance tax purposes, covering interests in possession held by or for the benefit of disabled persons under various qualifying conditions.

• A disabled person's interest includes interests in possession arising under trusts for disabled persons (section 89) and self-settlements by persons expected to become disabled (section 89A)
• A disabled person who becomes beneficially entitled to an interest in possession on or after 22 March 2006 qualifies, provided the trust terms ensure that any property applied during their lifetime is applied for their benefit
• A self-settlement qualifies where the settlor transferred their own property into trust on or after 22 March 2006, has satisfied HMRC that they have a condition expected to lead to disability, and the trust terms ensure that any property applied during their lifetime is applied for their benefit
• The age 18-to-25 trust rules do not apply to property in which a disabled person's interest subsists