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HMRC internal manual

Trusts, Settlements and Estates Manual

Trust income and gains: vulnerable beneficiaries - definition of a disabled person - receipt of DWP allowances

The benefits mentioned in TSEM3421 are paid by the Department for Work and Pensions. It is that department which assesses an applicant’s eligibility for these benefits.

TSEM3421 specifies actual receipt of the allowances mentioned.

However the legislation provides that in certain circumstances a person who stops receiving attendance or disability living allowance may still qualify as a vulnerable person for tax purposes.

If the sole reason the person is no longer in receipt of the relevant allowance is that they:

  • have been admitted into a certain type of care,
  • have certain accommodation provided (generally speaking where the cost is wholly or partly paid out of public or local funds) or
  • is receiving hospital treatment for renal failure,

then they will continue to qualify as a vulnerable person for the purposes of this special tax treatment.

On the other hand, where someone has received a benefit in the past but has recovered sufficiently so are no longer entitled to it, they will no longer qualify as a vulnerable person.

Also see TSEM3426 for the conditions to be met by a non-resident disabled person.