Phillipa Bruce-Kerr
I help people to understand the challenges they may face as they get older, and provide guidance on how to tackle them head on. I work with families to plan for the future they want, and support older people when they want to keep their independence.
I specialise in helping older and vulnerable people, and many of my clients are referred to me by charities such as Age UK, Alzheimer’s Society and Scope. I’m also an approved adviser for Mencap, and a fully accredited member of Solicitors for the Elderly. It’s important to be clear and to listen carefully when working with any person, but I use my skills to bring reassurance to my clients. Thanks to my knowledge and experience, I provide an insight that relatively few solicitors can offer.
I’m happy to visit my clients at home, or in hospitals or care homes, and I’m always available when they have concerns or questions.
Practice Area
Panel
- Contributing Author
4 Contributions by Phillipa Bruce-Kerr
PRACTICE NOTES
Managing personal injury damages awards: deputyship or trust? Court of Protection guidance from SM v HM and Watt v ABC (England and Wales)
Introduction
It is an unfortunate reality that, in many personal injury matters, particularly those involving the most catastrophic injuries, the injured person has lost or will lose the ability to manage their own affairs. In numerous instances, they also lack the capacity to appoint an attorney to act on their behalf or to set up a personal injury trust themselves. The involvement of the Court of Protection (COP) will usually be required in such situations. The court (either the COP or the court dealing with the personal injury claim) may need to determine whether to approve the creation of a personal injury trust or the appointment of a deputy. It should be emphasised that, even where an Enduring or Lasting Power of Attorney exists, the appointed attorney(s) do not have the authority to create a trust to hold any award without the court hearing the claim granting permission to establish a trust. Such permission would normally be recorded in a court order. Where the injured person has capacity to make some (but not all) decisions about their finances, or where their capacity to make such decisions may...
Private Client
PRACTICE NOTES
Personal Injury Trusts in England and Wales: Capacity, Court of Protection Approvals, Trust Selection (Bare, Discretionary, Life Interest), Disabled Person’s Trusts, Tax, Means-testing and Trustees’ Duties
Types of personal injury trust
How to choose between the different types of trust
Consideration of the various personal injury trust options commonly proceeds on the basis that the injured individual has full capacity and acts as settlor. Yet a trust may equally be created by court order, whether during the litigation or once a personal injury claim concludes. In those circumstances, the trust is put in place for the injured person, irrespective of whether their capacity is impaired. Watt v ABC (see Practice Note: The Court of Protection versus personal injury trusts) indicates that such orders can be made either by the court determining the claim and granting the award, or by the Court of Protection, whilst acknowledging that some jurisdictional questions remain unresolved. Although these notes proceed on the footing that the injured person is capable of setting up the trust, the discussion of the alternative trust structures is pertinent when drafting a proposal for the court’s approval. Accordingly, evaluation of the injured party’s capacity to create a trust is essential; where capacity is uncertain, judicial approval will be required. If the injured person’s capacity fluctuates, the trust must likewise be sanctioned by the court...
Private Client
PRACTICE NOTES
Personal Injury Trusts—Taxation and Registration: IHT traps, income tax and CGT across bare, discretionary, life interest and disabled trusts; TRS obligations
Inheritance tax and personal injury trusts
Many advisers mistakenly assume that choosing one form of personal injury trust over another delivers an inheritance tax (IHT) benefit, with discretionary trusts often singled out. In truth, for a self-settled personal injury trust, the structure chosen makes no difference. The gift with reservation of benefit rules bite, so the trust fund’s value is treated as part of the settlor’s estate for IHT purposes, whether or not it actually falls back into the estate on death. This remains the position even for disabled trusts...
From an IHT perspective, a poorly planned personal injury trust can be positively harmful. If an amount exceeding the nil rate band (£325,000 for England and Wales 2025–26) is placed into a relevant property trust—such as a discretionary or life interest trust—that does not qualify as a disabled persons trust, there is an immediate IHT charge of 20% on the excess above the nil rate band. A modestly higher figure (maximum £331,000) may apply where the individual has unused annual exemptions of £3,000 per year...
Private Client
PRACTICE NOTES
UK IHT treatment of disabled persons' trusts: qualifying beneficiary tests, s89/89A/89B structures, RNRB 'closely inherited' rules, aggregation, and pre-1981 s74 settlements
‘Disabled trust’
A ‘disabled trust’ receives preferential inheritance tax (IHT) treatment. Access to this concession depends on meeting specific qualifying conditions. Eligibility requires the trust to be a type permitted under section 89 of the Inheritance Tax Act 1984 (IHTA 1984), as amended, and to have a qualifying disabled beneficiary. Before the Finance Act 2006 (FA 2006), disabled persons’ trusts were little known among practitioners. FA 2006 moved most life interest trusts—particularly inter vivos arrangements rather than those set up by Will—into the relevant property regime. Consequently, for many families the IHT effects of transferring assets to a life interest trust mirrored those already applied to discretionary trusts. Chief among these was a 20% entry charge on amounts above the nil-rate band (NRB) for IHT (£325,000 in England and Wales up to 5 April 2023). Trusts holding more than the NRB could also incur ten-yearly and exit charges. However, where a trust constitutes a disabled person’s interest, a transfer into it does not...
Private Client
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