Glossary · UK
What is Bereaved Minors Trust?
A UK trust for a child under 18 who has lost a parent, given favourable inheritance tax treatment provided the child takes the property at age 18.
Full Definition
A bereaved minor's trust (BMT) is a UK trust created for a child under 18 who has lost at least one parent, usually under that parent's will or the intestacy rules, or via the Criminal Injuries Compensation Scheme. Its key feature is favourable inheritance tax treatment: provided the bereaved minor becomes absolutely entitled to the trust capital, and any income or capital used in the meantime is applied only for their benefit, by their 18th birthday, the trust escapes the periodic ten-year and exit charges that apply to most relevant property trusts. If entitlement is deferred beyond 18, the arrangement instead falls within the 18-to-25 trust rules, which can attract limited exit charges. BMTs replaced much of the role of accumulation and maintenance trusts after the 2006 reforms. They matter for parents drafting wills, as careful wording is needed to secure the IHT advantages while still protecting a young child's inheritance.