Written question asked by Chris Huhne (Liberal Democrat) on Monday, 21 November 2005, in the House of Commons. It was due for an answer on Wednesday, 23 November 2005. It was answered by Baroness Primarolo (Labour) on Tuesday, 29 November 2005 on behalf of the Treasury.

Disability Discrimination Act

Question: To ask the Chancellor of the Exchequer what the cost would be of applying the definition of disability in the Disability Discrimination Act 1995 to the tax regime for trusts with a vulnerable beneficiary as defined by section 38(1) of part 2, Chapter 4 of the Finance Act 2005.

Answer: We are unable to quantify this cost. The Government recognised that the increase in the rate applicable to trusts and the dividend trust rate from 6 April 2004 could have an impact on trusts with vulnerable beneficiaries, especially those set up for disabled and minor children who have suffered the death of a parent. We therefore introduced the special tax regime for such trusts in Finance Act 2005.We consulted widely before introducing the regime and, in consultation, including with groups representing the disabled, the consensus was to use the existing, generous definition from within the Taxes Acts that already works well within the tax system and relies on qualification for Department for Work and Pensions benefits.

Secondary information