Bereaved minor’s trust (BMT) meaning

A bereaved minor’s trust (BMT) is a testamentary trust used to hold a deceased parent’s estate for a child until age 18, with specific inheritance tax treatment. In UK tax law it is defined in IHTA 1984 section 71A (introduced by Finance Act 2006) and is also called a trust for bereaved minors (TBM). It arises only on a parent’s death (under a will or intestacy, or by a qualifying variation within two years). While it qualifies: only the bereaved minor(s) can benefit; trust income must be applied for their maintenance, education or benefit; and the child must become absolutely entitled at 18 (or earlier if the trustees appoint). Meeting these conditions takes the trust outside the relevant property regime for inheritance tax, so there are no ten‑year charges or exit charges before age 18. If benefits are available to others, or absolute entitlement is postponed beyond 18, the trust will not be a BMT; it may instead be an 18–25 trust under section 71D (with exit charges) or a relevant property trust. The regime applies across England & Wales, Scotland and Northern Ireland. In Ireland, there is no statutory BMT and no equivalent CAT relief; the term is descriptive only.