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PI Brief Update

Pesonal Injury Trusts and Tax Planning - Alan Robinson, Cross Keys Associates

21/06/13. Originally a personal injury trust was simply a method of sheltering compensation paid to someone as a result of personal injury. For someone receiving means tested benefits, this would mean that the compensation did not form part of their capital for benefit purposes, and they would therefore not be caught by the maximum capital rules. If they were (or were likely to become) resident in residential care, the capital rules which limit the amount payable by the local authority towards their charges would also be avoided by this method.

However, following the coming into force of the Finance Act 2006, certain types of personal injury trusts also have tax implications. It may therefore be the case that the personal injury trust can be employed as a method of tax planning, especially if it is desired to provide protection for the dependants of the injured person...

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All information on this site was believed to be correct by the relevant authors at the time of writing. All content is for information purposes only and is not intended as legal advice. No liability is accepted by either the publisher or the author(s) for any errors or omissions (whether negligent or not) that it may contain. 

The opinions expressed in the articles are the authors' own, not those of Law Brief Publishing Ltd, and are not necessarily commensurate with general legal or medico-legal expert consensus of opinion and/or literature. Any medical content is not exhaustive but at a level for the non-medical reader to understand. 

Professional advice should always be obtained before applying any information to particular circumstances.

Excerpts from judgments and statutes are Crown copyright. Any Crown Copyright material is reproduced with the permission of the Controller of OPSI and the Queen’s Printer for Scotland under the Open Government Licence.