10(1)In section 89B (meaning of “disabled person's interest”), in subsection (1)(c) after “2006” insert “ if the trusts on which the settled property is held secure that, if any of the settled property is applied during the disabled person's life for the benefit of a beneficiary, it is applied for the benefit of the disabled person ”.U.K.
(2)After that section insert—
(1)The trusts on which settled property is held are not to be treated for the purposes of section 89B(1)(c) or (d) (meaning of “disabled person's interest”: cases involving an interest in possession) as failing to secure that the settled property is applied for the benefit of a beneficiary by reason only of—
(a)the trustees' having powers that enable them to apply otherwise than for the benefit of the beneficiary amounts (whether consisting of income or capital, or both) not exceeding the annual limit,
(b)the trustees' having the powers conferred by section 32 of the Trustee Act 1925 (powers of advancement),
(c)the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by proviso (a) of subsection (1) of that section,
(d)the trustees' having the powers conferred by section 33 of the Trustee Act (Northern Ireland) 1958 (corresponding provision for Northern Ireland),
(e)the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by subsection (1)(a) of that section, or
(f)the trustees' having powers to the like effect as the powers mentioned in any of paragraphs (b) to (e).
(2)For the purposes of this section, the “annual limit” is whichever is the lower of the following amounts—
(a)£3,000, and
(b)3% of the amount that is the maximum value of the settled property during the period in question.
(3)For those purposes the annual limit applies in relation to each period of 12 months that begins on 6 April.
(4)The Treasury may by order made by statutory instrument—
(a)specify circumstances in which subsection (1)(a) is, or is not, to apply in relation to a trust, and
(b)amend the definition of “the annual limit” in subsection (2).
(5)An order under subsection (4) may—
(a)make different provision for different cases, and
(b)contain transitional and saving provision.
(6)A statutory instrument containing an order under subsection (4) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.”
(3)The amendments made by this paragraph have effect in relation to property transferred into settlement on or after the day on which this Act is passed.
(4)Nothing in this paragraph is to be read as preventing property transferred into a settlement to which sub-paragraph (5) applies from being settled property for the purposes of section 89B(1)(c) or (d) of IHTA 1984.
(5)This sub-paragraph applies to a settlement—
(a)created before the day on which this Act is passed the trusts of which have not been altered on or after that day, or
(b)arising on or after the day on which this Act is passed under the will of a testator, if—
(i)the will was executed before the day on which this Act is passed and its provisions, so far as relating to the settlement, have not been altered on or after that day, or
(ii)the will was executed or confirmed on or after the day on which this Act is passed and its provisions, so far as relating to the settlement, are in the same terms as those contained in a will executed by the same testator before that day.