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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11561
Experience:  30 years as a practising solicitor.
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If a person is a beneficiary of a discretionary trust and the

Resolved Question:

If a person is a beneficiary of a discretionary trust and the trustees exercise their discretionary to pay income and capital to the beneficiary, is the following a correct assessment of how the beneficiary’s entitlement to benefits will be affected?
• the trust fund itself does not count as savings owned by the beneficiary because they have no access to those funds,
• if the beneficiary receives any income from the trust, the income will be taken into account in determining the beneficiary’s entitlement to benefits,
• if the beneficiary receives any capital from the trust, the capital itself will not be treated as income in determining the beneficiary’s entitlement to benefits, but to the extent that the beneficiary builds up savings with the capital, those savings will be taken into account in determining benefits.
Submitted: 2 years ago.
Category: Law
Expert:  JGM replied 2 years ago.
Thank you for your question.
You are correct. It's only income and capital in the hands of the beneficiary that can be taken into account in assessing benefits.
Happy to discuss further.
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