Special trusts for permanently incapacitated individuals

Section 189A of the Taxes Consolidation Act (TCA) 1997 deals with the taxation treatment of income and gains arising from the creation of special trusts, the funds of which are raised by subscriptions from the general public on behalf of individuals who are permanently and totally incapacitated from being able to maintain themselves. The section exempts from tax certain income and gains arising to the trustees of such funds and to the incapacitated individual or individuals concerned.

Section 10 of Finance Act 2014 amended section 189A TCA 1997 to allow the undistributed part of the trust funds on the death of an incapacitated individual, or of the last surviving incapacitated individual, as the case may be, to form part of the estate of the individual provided they have a surviving spouse, civil partner or child. Previously, the undistributed trust funds at the date of death had to be applied for charitable purposes or appointed in favour of the trustees of charitable bodies.

Tax and Duty Manual Part 7.01.20 has been updated to reflect this change.

05 February 2015