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HMRC internal manual

Trusts, Settlements and Estates Manual

HM Revenue & Customs
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Introduction to trusts: types of trust: trust for minor or incapacitated person

Minors or incapacitated persons are under a legal disability from holding property personally and property has to be held on trust for them.

In a trust where such a beneficiary has an indefeasibly vested interest in the trust income and capital the trust is a bare trust (see TSEM1563). It does not matter that because of the beneficiary’s incapacity the trustee has active duties to perform. The income is the beneficiary’s as it arises.

For most UK trusts for minors the provisions of Section 31 Trustee Act 1925 apply during minority. (This Act does not apply to trusts administered in Scotland or established under Scots law.) Where S31 applies, the Trustees will have discretion over the use of income for the benefit of the minor and must accumulate the balance. Where the beneficiary’s title to income is indefeasible, the income is the beneficiary’s as it arises, and we do not tax the trust as an accumulation/discretionary trust (TSEM1565).