A personal injury trust account in the UK is a special type of bank account used to hold compensation received for a personal injury claim, such as damages from an accident, medical negligence, or other injury-related cases. The primary purpose of a personal injury trust is to ensure that the compensation does not affect the injured person’s eligibility for means-tested benefits or care support.

Key Features of a Personal Injury Trust:

1. Exemption from Means-Tested Benefits:

   • Without a trust, compensation could be counted as part of your financial assets. If your total assets exceed a certain threshold (e.g., £6,000 for certain benefits), this might reduce or disqualify you from receiving benefits.
   • Funds held in a personal injury trust are disregarded for means-tested benefits purposes as long as the trust is correctly set up.

2. Protection of Funds:

   • A trust protects the compensation from being spent unintentionally or accessed by creditors, family members, or others.

3. Set-Up Timeframe:

   • It’s recommended to set up the trust within 52 weeks of receiving the compensation. During this period, the compensation is generally disregarded for means-testing purposes, even if a trust isn’t yet in place.

4. Trustees:

   • The trust requires trustees, who are individuals responsible for managing the account. Typically, you (the injured party) can be a trustee, but it’s advisable to appoint at least one or two other trustworthy individuals, such as family members or professionals.

5. Types of Trusts:

   • The most common type used for this purpose is a bare trust (simple trust), where the injured person retains full control over how the funds are used, but the funds are still legally held in trust.

6. Uses of the Funds:

   • The funds can only be used for your benefit, such as medical care, housing adaptations, or general living costs. However, trustees should ensure the spending aligns with the trust’s purposes.

The Personal Injury Trust Account from Money Carer

Professionals such as solicitors, independent financial advisors (IFAs), and family trustees can open a personal injury trust bank account on the Monika banking platform within minutes. The account can then be used to receive deposits and make payments from a bank account to support the beneficiary in line with the trustee’s fiduciary responsibilities.

As Money Carer has a unique and long-established relationship with Zempler Bank, trustees can immediately benefit from the banking services technology and payment innovations developed by Money Carer and used by hundreds of law firms and local authorities to help them fulfil their fiduciary duties in supporting the vulnerable people under their care.

To open a personal injury trust bank account, simply contact us.

A trust is a legal arrangement that allows money, property, or other assets to be managed on behalf of someone else. It provides a structured way to ensure that these assets are used for the benefit of the intended individual(s), often under specific conditions outlined by the person who created the trust.

Key Parties Involved in a Trust

Every trust involves three main roles:

1. The Settlor: This is the person who creates the trust by placing money or assets into it. In Scotland, the settlor is referred to as the “Granter.” The settlor also decides the terms of the trust, including who will benefit and how the assets should be managed or distributed.
2. The Beneficiary: This is the individual or group of individuals who will benefit from the trust. Beneficiaries can receive income, assets, or other advantages from the trust, depending on its terms.
3. The Trustee: This is the individual, group, or institution responsible for managing the trust. Trustees ensure the trust’s assets are managed in line with the settlor’s instructions and for the benefit of the beneficiary. Trustees have a legal duty to act in the best interests of the beneficiaries and to follow the terms of the trust.

Advantages

1. Protection of Means-Tested Benefits

• Preserves eligibility: Compensation placed in a personal injury trust is disregarded when assessing eligibility for means-tested benefits such as Universal Credit, Income Support, or Housing Benefit.
• Mitigates financial impact: Without a trust, compensation could push you over the savings threshold, causing you to lose benefits.

2. Protection of Assets

• Ring-fenced funds: The trust ensures that the compensation is separate from your personal finances, reducing the risk of mismanagement or impulsive spending.
• Asset preservation: Helps protect the compensation from creditors, divorce settlements, or other claims.

3. Flexibility and Control

• Controlled access: Trustees (appointed by you) manage the funds, which can ensure that money is used for its intended purpose, such as healthcare, housing, or other necessities.
• Tax planning opportunities: Trusts can sometimes offer tax advantages, though this depends on specific circumstances.

4. Peace of Mind

• Professional oversight: Trustees can include professionals who provide financial advice, ensuring the money is invested and used wisely.
• Longevity of funds: Ensures that funds last over the long term, particularly for those with ongoing care or medical needs.

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Disadvantages

1. Costs

• Set-up costs: Establishing the trust requires legal assistance, which can be expensive.
• Ongoing fees: Trustees, especially professional ones, may charge fees for managing the trust. There may also be costs for preparing annual accounts.

2. Administrative Burden

• Ongoing compliance: Trustees must comply with legal and regulatory requirements, which can involve paperwork and reporting.
• Time-consuming decisions: Trustees must collectively agree on how the funds are managed and spent, which can delay decisions.

3. Limited Access

• Restricted use of funds: The trust can only be used for specific purposes, as outlined in the trust deed. You’ll need trustee approval for withdrawals.
• Potential frustration: Some beneficiaries find it inconvenient not to have direct access to their compensation.

4. Tax Implications

• Tax liabilities: While many personal injury trusts have limited tax exposure, they may still incur tax on income or capital gains generated within the trust if they exceed certain thresholds.
• Inheritance Tax (IHT): Depending on the type of trust, there could be IHT implications every 10 years or when assets are distributed.

5. Trustee Challenges

• Trustee selection: Choosing suitable trustees can be difficult. Trustees need to act in your best interests and manage the trust responsibly.
• Trustee disagreements: Conflicts among trustees could lead to delays or legal disputes.

6. Potential Impact on Relationships

• Dependency on trustees: Relying on trustees for access to funds can strain personal relationships if friends or family members are appointed.

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Who Should Consider a Personal Injury Trust?

• Individuals receiving a significant compensation payout and who rely on means-tested benefits.
• People who need long-term financial planning for ongoing care or medical expenses.
• Those seeking to safeguard their compensation from financial mismanagement or external claims.

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Types of Personal Injury Trusts

• Bare Trusts: The beneficiary has direct entitlement to the funds, and income tax is paid at the beneficiary’s rate.
• Discretionary Trusts: Trustees decide how and when to distribute funds, offering more flexibility and protection but with more complex tax rules.
• Life Interest Trusts: The beneficiary has the right to income generated by the trust, while capital is preserved for others.

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Key Takeaway: A personal injury trust can offer significant benefits in terms of financial protection and means-tested benefit preservation. However, it is important to weigh the costs, administrative responsibilities, and restrictions. Consulting with a solicitor or financial adviser is crucial to determine if a trust aligns with your circumstances.

If you would like to open a personal injury trust bank account on the Monika platform, simply contact us and our friendly banking team will be happy to assit you with this.

Key Features of a Lifetime Trust

1. Creation During Lifetime: Unlike a will trust (which takes effect after death), a lifetime trust is established while you’re alive. It allows for assets to be managed immediately.
2. Managed by Trustees: Trustees are appointed to hold and manage the assets on behalf of the beneficiaries. These can include yourself, family members, friends, or professionals.
3. Control and Flexibility: You can specify how and when assets should be distributed, whether as a lump sum, income, or under specific conditions (e.g., when a beneficiary reaches a certain age).
4. Types of Lifetime Trusts:
   • Bare Trusts: Assets are held in the name of a beneficiary, who has an absolute right to them once they come of age (typically 18 in England and Wales).
   • Discretionary Trusts: Trustees have flexibility over how and when to distribute assets to beneficiaries, offering more protection.
   • Interest in Possession Trusts: A beneficiary has the right to income from the trust assets during their lifetime, but the capital typically passes to others later.
5. Irrevocability: Many lifetime trusts are irrevocable, meaning once assets are transferred into the trust, they are no longer part of your estate.

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Advantages of a Lifetime Trust

1. Inheritance Tax (IHT) Planning:
   • Lifetime trusts can help reduce the value of your estate for IHT purposes. If the trust is established more than seven years before your death, the assets may fall outside your estate, avoiding IHT on them.
   • Certain trusts, such as discretionary trusts, can limit IHT liability by distributing assets strategically.
2. Protection of Assets:
   • Safeguards assets from creditors, divorce settlements, or spendthrift beneficiaries.
   • Provides security for vulnerable beneficiaries (e.g., minors or those with disabilities).
3. Avoiding Probate:
   • Assets held in a trust do not go through probate, meaning faster distribution to beneficiaries.
   • Ensures confidentiality, as trusts are private and not subject to public record like wills.
4. Control Over Distribution:
   • You can dictate how and when beneficiaries access funds, e.g., limiting access until they reach a certain age or ensuring funds are used for specific purposes (e.g., education).
5. Means-Tested Benefits:
   • Assets in certain trusts may not count towards means-tested benefits eligibility for beneficiaries.

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Disadvantages of a Lifetime Trust

1. Cost of Setup and Management:
   • Setting up a trust can be expensive, involving legal and professional fees.
   • Trustees may charge ongoing fees for administration, particularly if professional trustees are appointed.
2. Potential Tax Implications:
   • Inheritance Tax: Lifetime trusts may attract IHT if the value exceeds the nil-rate band (currently £325,000). A 20% IHT charge may apply when setting up the trust if it exceeds this threshold.
   • Periodic Charges: Some trusts are subject to a 10-yearly IHT charge (up to 6% of the trust’s value) and exit charges when assets are distributed.
   • Income and Capital Gains Tax: Trusts may have to pay tax on income or capital gains generated by trust assets, often at higher rates than individuals.
3. Loss of Asset Control:
   • Transferring assets to a trust means you no longer own them outright. While you can be a trustee, you must act in the best interests of the beneficiaries, not yourself.
4. Complexity:
   • Trusts involve legal and financial complexities that require professional advice to establish and maintain.
   • Mismanagement of the trust could lead to disputes or unintended tax liabilities.

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Who Should Consider a Lifetime Trust?

• Individuals with significant wealth who want to reduce IHT liabilities.
• People who want to protect assets for specific beneficiaries, such as children or vulnerable family members.
• Those looking to avoid probate and ensure efficient asset distribution after their death.
• Parents or grandparents who want to fund specific purposes (e.g., education) while retaining some control over the timing and use of funds.

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Types of Assets Suitable for a Lifetime Trust

• Property (e.g., family homes or investment properties)
• Cash or savings
• Investments (e.g., stocks and shares)
• Business interests

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Key Considerations

• Seek professional advice from a solicitor or tax adviser to ensure the trust is set up correctly and aligns with your estate planning goals.
• Choose trustworthy and competent trustees, as they will have significant responsibility for managing the assets.

By carefully setting up a lifetime trust, you can achieve financial protection, control, and tax efficiency while providing for your beneficiaries in a structured manner.

If you would like to open a personal injury trust bank account on the Monika platform, simply contact us and our friendly banking team will be happy to assist you with this.

In the UK, a bare trust is a straightforward form of trust in which the trustee holds legal ownership of assets for the sole benefit of the beneficiary, who has an absolute right to the trust’s assets and income. It is commonly used for tax planning, estate planning, or holding assets for children. You can open a bank specialist bank account for a bare trust here.

Key Characteristics of a Bare Trust in the UK:

1. Absolute Beneficiary Rights:
   • The beneficiary (or beneficiaries) is entitled to the assets and any income generated by the trust.
   • The trustee has no discretion over the use or distribution of the assets.
   • The trustee must act in accordance with the beneficiary’s instructions, provided the beneficiary is of legal age (18 in England and Wales; 16 in Scotland).
2. Taxation:
   • Income Tax: Any income generated by the trust is taxed as though it belongs to the beneficiary. If the beneficiary is a minor, the tax rules may differ (e.g., parental tax rules if the settlor is the parent).
   • Capital Gains Tax (CGT): Beneficiaries are liable for any CGT on gains made by the trust assets.
   • Inheritance Tax (IHT): Assets in a bare trust are treated as part of the beneficiary’s estate for IHT purposes.
3. Legal Ownership:
   • The trustee is the legal owner of the trust property but holds it “on behalf of” the beneficiary.
   • The beneficiary has “equitable ownership,” meaning they have the right to benefit from the trust assets.
4. Common Uses:
   • For Minors: Parents or guardians often use bare trusts to hold investments or savings for children until they reach adulthood.
   • Nominee Shareholdings: Bare trusts can be used in investment or property transactions to hold shares or property temporarily.
   • Gifts: They are useful for passing assets directly to beneficiaries while keeping the arrangement simple.
5. Structure:
   • There is typically no written trust deed required for a bare trust (though having one is often advisable).
   • The creation of a bare trust can be explicit (e.g., via a deed) or implied (e.g., by transferring assets to a nominee for the benefit of another person).

Example:

A grandparent might set up a bare trust to hold £10,000 in investments for a grandchild. The trustee (e.g., the grandparent) manages the assets until the grandchild reaches 18 (16 in Scotland). At that point, the grandchild gains full access to the assets and any income they have generated.

Bare trusts are particularly common because of their simplicity and clarity, but they may not provide the same level of protection or flexibility as other types of trusts, such as discretionary trusts.

If you would like to open a trustee bank account for a Bare Trust on the Monika platform, simply contact us and we will be happy to assist.

In the UK, a discretionary trust is a flexible type of trust in which the trustees have the power to decide how to allocate the trust’s income and/or capital among a group of potential beneficiaries. Unlike a bare trust, where beneficiaries have an absolute right to the assets, the beneficiaries of a discretionary trust only have a potential right to benefit, subject to the trustees’ discretion.

You can open a bank account for a discretionary trust here.

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Key Features of a Discretionary Trust:

1. Trustees’ Discretion:
   • Trustees have the authority to decide:
     • Which beneficiaries receive income or capital.
     • How much each beneficiary receives.
     • When beneficiaries receive their entitlement.
   • This allows the trustees to respond to changes in circumstances, such as beneficiaries’ financial needs or tax situations.
2. Beneficiaries:
   • The trust usually has a class of beneficiaries, which may include specific individuals (e.g., children, grandchildren) or broader categories (e.g., “my descendants”).
   • No beneficiary has an automatic right to the assets—they are only entitled to what the trustees choose to distribute to them.
3. Flexibility:
   • The flexibility of discretionary trusts makes them suitable for protecting assets and managing the needs of multiple beneficiaries, especially if those needs are uncertain or change over time.
4. Letter of Wishes:
   • The settlor (the person creating the trust) can provide a letter of wishes to guide the trustees on how they might exercise their discretion. While not legally binding, it serves as a reference point for the trustees.

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Taxation of Discretionary Trusts in the UK:

Discretionary trusts have distinct tax rules compared to other trusts:

1. Income Tax:
   • Income retained within the trust is taxed at the trust rate:
     • 45% on most income.
     • 39.35% on dividend income.
   • If the income is distributed to beneficiaries, they may reclaim some of the tax paid, depending on their personal tax rates.
2. Capital Gains Tax (CGT):
   • Trustees are liable for CGT on gains made by trust assets, taxed at 20% (or 28% for residential property).
   • Trustees have a reduced annual CGT exemption, currently 50% of the standard individual allowance.
3. Inheritance Tax (IHT):
   • Discretionary trusts are subject to a periodic charge (up to 6% of the value of the trust assets) every 10 years.
   • An exit charge may also apply when assets leave the trust (e.g., distributed to beneficiaries).

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Common Uses of Discretionary Trusts:

1. Asset Protection:
   • Trust assets are protected from the creditors or divorce settlements of beneficiaries.
   • Suitable for beneficiaries who are vulnerable, financially inexperienced, or have special needs.
2. Tax Planning:
   • Helps manage and minimize inheritance tax (IHT) exposure.
   • Flexible for distributing income and capital in tax-efficient ways to beneficiaries.
3. Providing for Multiple Generations:
   • Ideal for families where the settlor wishes to benefit descendants but does not want to divide the assets outright.

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Example:

A parent sets up a discretionary trust for their children and grandchildren. The trustees are given the discretion to allocate trust income or capital to support beneficiaries’ education, medical expenses, or other needs. One child might receive a larger share for university tuition, while another might receive nothing if they are already financially secure.

Discretionary trusts are popular for their flexibility and protective features, but they come with administrative responsibilities and specific tax implications. Trustees must carefully manage the trust in line with both legal obligations and the settlor’s intentions.

A special needs trust is a legal arrangement designed to provide financial support for individuals with disabilities or special needs, without compromising their eligibility for means-tested benefits, such as Universal Credit or other government assistance.

The purpose of the trust is to ensure that the person with special needs can receive financial assistance and resources while protecting their long-term interests.

Key Features of a Special Needs Trust

1. Beneficiary: The trust is set up to benefit a person with a disability or special needs, ensuring they have access to funds for specific purposes (e.g., care, housing, or recreation).
2. Trustees: Individuals or entities (like solicitors or family members) are appointed to manage and oversee the trust on behalf of the beneficiary.
3. Assets: The trust holds assets, which could include money, property, or investments. These assets are managed and used to support the beneficiary.
4. Discretionary Nature: Special needs trusts are typically discretionary trusts, meaning the trustees have control over how and when the assets are distributed. This ensures the beneficiary does not have direct control over the assets, which helps preserve their eligibility for benefits.

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Why Use a Special Needs Trust?

• Preservation of Benefits: Means-tested benefits like Universal Credit or housing assistance may be reduced if an individual inherits significant assets outright. A trust can protect these benefits.
• Long-Term Support: The trust ensures ongoing financial support throughout the lifetime of the beneficiary, even after the death of parents or caregivers.
• Protection of Assets: By holding assets in trust, they are safeguarded from misuse or exploitation.
• Tailored for Specific Needs: Trustees can use the trust funds to cover expenses that improve the quality of life of the beneficiary, such as therapies, education, holidays, or personal care.

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Types of Special Needs Trusts

1. Discretionary Trust: The most common type for special needs. Trustees decide how to use funds to benefit the person with special needs.
2. Disabled Person’s Trust: A specific type of trust recognized under UK tax law, where the primary beneficiary is someone with a qualifying disability. It has certain tax advantages if structured correctly.

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Tax Considerations

• Special needs trusts, particularly disabled person’s trusts, may qualify for favorable tax treatment under Inheritance Tax (IHT), Capital Gains Tax (CGT), and Income Tax.
• For instance, the trust can avoid certain punitive tax rates if it meets criteria laid out in UK tax laws, such as ensuring the beneficiary meets the definition of a “disabled person” under the law.

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Setting Up a Special Needs Trust

• Legal Advice: It’s advisable to consult a solicitor or financial advisor specialising in trusts and disability law.
• Trust Deed: A legal document that outlines the terms of the trust, including the appointment of trustees, the beneficiaries, and the management of assets.
• Funding the Trust: Assets can be transferred into the trust through lifetime gifts, inheritances, or life insurance policies.

By setting up a special needs trust, families and carers can ensure that individuals with disabilities have financial security and quality of life, without risking access to vital government support.

If you would like to chat with our banking team about opening a bank account as a trustee of a Special Needs Trust, simply contact us, and we will be very happy to assist you.

Yes. Our trustee banking services are available for access by financial representatives such as IFA’s or specialist trust advisors and planners who represent professional or individual/family trustees, deputies and attorneys.

The Monika banking platform will enable you to open a trustee account much more quickly than legacy banks, and you will also be able to provide your clients with the full range of innovations and financial tools unique to the platform.

To open a trustee bank account on the platform, we will need the necessary documents to confirm your representative status, along with a copy of the Trust Deed and KYC details for the trustees.

If you are a financial advisor and would like to learn more, simply contact us, and our team will be happy to assist you and your team.

Open a personal injury trust bank account here.

Yes, you can transfer your deputy bank accounts to the new bank accounts opened on the Monika platform.

If you are a professional deputy and wish to use the Monika banking platform. In that case, we have simplified transferring your deputyship accounts using our unique access to the Current Account Switch Service (CASS) In fact, we have engineered the ability to bulk transfer current accounts so as to make the process as hassle free as possible.

As with standard current account switches, all inbound payments made to the old deputy accounts will be automatically redirected to the new deputy accounts opened on the Monika platform. Similarly, any existing direct debits and standing orders set up on the old account will be automatically ported to the new account, with the old account closed and the entire balance transferred to the new account.

All this happens within seven working days and is completely free of charge.

To discuss arranging for a bulk transfer of deputyship bank accounts, just get in touch and our friendly banking team will be happy to discuss the process and your requirements.

Read an article about how Pay.UK and Money Carer have worked together to develop the Current Account Switch Service to promote financial inclusion for vulnerable clients.

Absolutely.

We often suggest that you put us in touch with your solicitor or financial advisor when they are in the process of setting up the trust, as they can supply us with a copy of the Trust Deed as we will need this to open a personal injury trust bank account. With your permission, we can also supply them with the trust account bank account details when it is opened so they can transfer the funds from their client account if they receive any money awarded.

As your Monika account can also be used to store and view important documents such as the Trust Deed, your solicitor or financial advisor will be able to upload documents into your Monika account, and you can receive notifications when any new activity on your account occurs. You can receive notifications via email or message notifications within our free smartphone app.

You will also be able to see the balance of the personal injury trust account and view any stored documents as well along with lots of other features.

Open a PI Trust Bank Account by contacting our friendly banking support team.

The cost of setting up a personal injury trust in the UK can vary depending on the complexity of the trust, the type of trust chosen, and the professional services you use (e.g., solicitors, financial advisors). Here’s a breakdown of the typical costs:

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Typical Costs

1. Basic Setup Costs
   • For a straightforward Bare Trust (the simplest type of personal injury trust), the setup cost is typically between £300 and £600.
   • For more complex trusts like Discretionary Trusts, costs can range from £1,000 to £2,500 due to the additional legal and tax considerations.
2. Professional Fees
   • Solicitors’ fees: Solicitors usually charge a fixed fee for drafting the trust deed and advising on the setup. This is often included in the setup cost mentioned above.
   • Financial advice fees: If you seek advice on managing or investing the compensation, independent financial advisors may charge additional fees, either as a flat fee or a percentage of the investment.
3. Ongoing Administration Costs
   • If you appoint professional trustees (e.g., a solicitor or accountant), they may charge annual fees for managing the trust. This can range from £500 to £2,000+ per year, depending on the complexity of the trust and the level of involvement required.
   • DIY trusts (where family members or close friends act as trustees) generally have no ongoing professional fees but may still require occasional legal or accounting advice.
4. Additional Costs
   • Tax advice: For discretionary trusts, you may need advice on income tax, capital gains tax, or inheritance tax implications. A one-off consultation with a tax advisor could cost £200 to £500.
   • Bank account fees: Many trusts require a separate bank account, which may incur maintenance fees, especially for business or trustee accounts.

It is worth noting that setting up a Personal Injury Trust on the Monika Banking Platform is free of charge.

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Cost Factors

• Type of Trust: Bare Trusts are simpler and less expensive than Discretionary Trusts, which require more detailed drafting and administration.
• Professional vs. Non-Professional Trustees: Using family or friends as trustees reduces costs but may lack expertise.
• Size of the Compensation: Larger settlements may require more complex trusts and professional advice, increasing costs.

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How to Minimise Costs

• Shop around: Compare fees from different solicitors or trust providers.
• Use fixed-fee services: Many solicitors offer fixed-fee packages for personal injury trusts, avoiding unexpected costs.
• Consider your needs: If the trust is for straightforward purposes, a Bare Trust may suffice, reducing setup and administration costs.

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Funding the Trust Setup

The cost of setting up the trust can often be paid from the compensation awarded, ensuring that it doesn’t require out-of-pocket expenses.

For an exact quote, it’s recommended to consult a solicitor experienced in personal injury trusts. They can assess your needs and provide a clear breakdown of the costs involved.

To open a personal injury trust bank account, simply contact us.

An Interest in Possession Trust (IIP Trust) in the UK is a type of trust where at least one beneficiary (known as the life tenant) has the legal right to receive the income generated by the trust assets during their lifetime, or to use the trust property. This right exists even though they don’t own the underlying assets, which remain held in the trust for the benefit of other beneficiaries.

Key Features

1. Life Tenant’s Interest:
   • The life tenant (or income beneficiary) is entitled to income from the trust or use of its assets, such as living in a property held by the trust.
   • This right usually lasts for the life tenant’s lifetime or a specified period.
2. Remainder Beneficiaries:
   • When the life tenant’s interest ends (e.g., upon their death), the remaining trust assets (the “capital”) are passed to other beneficiaries, known as remainder beneficiaries.
3. Trustees’ Role:
   • Trustees manage the trust assets and ensure that the life tenant’s interest is maintained while preserving the capital for the remainder beneficiaries.
4. Types of Assets:
   • Assets in an IIP Trust can include property, investments, or cash.

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Tax Implications

The tax treatment of IIP Trusts varies depending on when the trust was created and its circumstances:

1. Inheritance Tax (IHT):

• Pre-22 March 2006: IIP Trusts created before this date are often treated as if the life tenant owns the assets directly. When the life tenant dies, the trust assets are included in their estate for IHT purposes.
• Post-22 March 2006: Most new IIP Trusts fall under the “relevant property regime,” subject to periodic charges (10-year charges) and exit charges.

2. Income Tax:

• Income received by the life tenant is taxable at their personal tax rate. Trustees usually pay income tax on the trust’s income and pass it to the life tenant with a tax credit.

3. Capital Gains Tax (CGT):

• Trustees are responsible for CGT when selling trust assets, although there are some exemptions or rollover reliefs depending on the situation.

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Common Uses

• Providing for a spouse/partner: For example, a settlor might create an IIP Trust to allow their spouse to benefit from the income during their lifetime, with the capital passing to their children afterward.
• Asset protection: Helps to ensure that trust assets are preserved for future beneficiaries.
• Estate planning: Can help structure inheritance and mitigate tax liabilities effectively.

If you would like to open a trustee bank account on the Monika platform, contact us, and we will be happy to assist.

Yes, you can, and its simple to do so.

Firstly, we will open a free Personal Injury Trust bank account for the trustees. Please provide us with a copy of the Trust Deed, the relevant identification details of each trustee and the beneficiary of the trust. Our banking partner, Zempler Bank, will then undertake the necessary KYC (Know Your Customer) checks using the information you have provided.

Once we have received the confirmation from Zempler Bank that all the documentation is in order, we can open the trustee managed bank account in the name of the beneficiary within a matter of minutes. If there are any queries that arise from the documentation you provide, our banking team will liaise with you directly to obtain any additional information Zempler Bank may require in order to proceed with the opening of the account on the Monika platform.

Once we have opened the personal injury trust account, you will be able to transfer the money held in the old trust account into the new trust bank account opened on the Monika platform so that the trustee can then manage the funds more easily using the unique features and functionalities available within Monika.

In the UK, several high street banks and building societies have recently withdrawn their personal injury trust accounts, citing increased costs, complexity, and compliance challenges. Notably, Nationwide Building Society has closed such accounts, leaving customers to seek alternatives.

This trend has significantly impacted vulnerable individuals, including those with disabilities or learning difficulties, who rely on these accounts to manage compensation funds without affecting their eligibility for means-tested benefits. The closures have led to difficulties in accessing essential funds, causing distress among account holders.

The Monika Banking Platform provided by Money Carer, the UK’s largest provider of appointee money management services for vulnerable people, provides a much-needed solution via its Personal Injury Trust Bank Account that allows professional and family trustees to open an account online and free of charge.

The account can be used to receive deposits and make payments to support trustees and beneficiaries, and can also be linked to separate, everyday spending accounts and issue prepaid debit cards for use by beneficiaries or their carers.

In summary, while a few traditional banks like Metro Bank offer personal injury trust accounts with associated fees and potentially longer setup times, innovations such as the Monika Banking Platform provide a more modern, cost-effective banking service with quick account opening and no setup fees.

Linked Article: Nationwide Building Society Personal Injury Trust Accounts