Personal injury trusts and compensation for injury – our speciality.

Personal injury trust

A personal injury trust allows you to hold and use injury compensation and keep your means tested benefits. It is the only legitimate way to protect your means tested benefits and keep and use compensation. If held in a trust, the benefit rules allow compensation paid to you for an injury to be ignored. The same rules apply if you need local authority care.

You will appoint trustees and the trust holds the compensation separate from your personal money. You can use the trust fund very much as you wish. Make payments direct from the trust fund, not to yourself. You can learn more about personal injury trusts:

Personal injury compensation

Here you can find legal support for personal injury and accident compensation claims. You will need time and empathy together with the expert advice to help you make a successful compensation claim. I aim to help you back to normal as quickly as possible and receive the maximum compensation

Help is available for motorcycle accidents, pedestrian accidents, car accidents, cycling accidents, injury at work, industrial disease.

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36 thoughts on “Home”

  1. My mum is about to receive £35k compensation payment for a personal injury.
    My father is in receipt of Pension Credit, am I right in thinking that Personal Injury payments are disregarded indefinitely for “pension Credit”
    That is the advice on websites such as

    1. The current regulations for Pension Credit simply say that personal injury compensation will be ignored. It is sensible to tell the pension agency about the payment, then you will have a letter confirming the position.
      The same applies to Council Tax Reduction for those beyond State retirement age.
      Do carefully check benefit entitlement. You can use http://www.entitledto.co.uk
      A trust will be necessary to protect entitlement to any other means tested benefit, an example being Housing Benefit. A trust will also keep the compensation outside a financial assessment for care..
      Take a look at the whole picture to be sure.

  2. I’m due a PI compensation payment. Our family financial advisor is setting up a trust, where my dad is a trustee, and the money will be named as a trust for my children’s future. With access to via my dad only. Do I still need to pay for a deed of trust, and doing it this way will it effect my benefits.
    My FA can’t understand why we need a deed of trust if the money is to go straight to the trustee account

    1. The purpose of a personal injury trust is to ensure the compensation is not taken into account for means tested benefits or care. You need a deed to create the trust, it not being enough to hold funds in a financial vehicle with the word “trust” in its name. What your financial adviser is suggesting will not create a trust, just an investment with the word “trust” in its title.

  3. I want to take what remains of my personal injury compensation out of trust. What is the tax position of doing this? Is the money counted as income or a capital gain when it leaves the trust? Thanks.

    1. The answer depends on the type of trust you have.
      Most trusts written for personal injury compensation are bare, or simple trusts, as they are sometimes called. If it is a bare trust, the trust is irrelevant for tax purposes. You are the taxpayer for any trust income or capital gain, so whether the trust or you holds the money does not matter. In such a case, no tax is payable if trust funds are paid to you.
      If not a bare trust, or if you are not sure, I would need to see the trust deed to answer your question.

  4. Hi, I had a car accident in March this year (other party at fault) I had a medical examination via FaceTime due to COVID-19, when the medical report was sent over it stated all my injuries should be healed within 6 months so I signed this. Further from that I’ve been having physio over the phone and been sent exercises to do at home. My physio have now said I could potentially have nerve damage in my arm, I told my solicitor this and asked them whether I should accept the settlement offer and they’re reply was ‘you signed the medical report confirming your injuries would be fine within 6 months, so the other party will more than likely take you to court if you were to reject the offer’ my physio didn’t mention nerve damage till after the medical was done and after I signed it. Can you advise what I should do? I thought the solicitor was suppose to be on my side but it doesn’t seem they want to help very much.

    1. You can agree a medical report is factually accurate and the conclusion seems sensible. You cannot commit to a predicyed recovery and then be bound by it if the prediction does not come trust.
      You could obtain your physiotherapy notes, or a letter from the physio. The solicitors could pass that to the medical expert to see if the opinion can be altered.
      The difficulty with cases like yours, is that solicitors are working on a rather low fixed fee. You expect a comprehensive personal service, but the solicitors are trying to crack through the claim as quickly as possible. If solicitors were up front about the way they feel they have to work, there would be less need for enquiries such a yours.

  5. Hi Mark

    I recieved a medical negligence pay out of 175,000.. 25% of that is being held by the solicitors until costs are determined. A letter was sent to the DWP from my solicitor stating that i was in receipt of the payout and notifying about the trust. The dwp are claiming to not have recieved the letter. Also a property has been bought through my trust for £95,000 will this effect my benefits. Currently recieving PIP, employment and support allowance and housing benefit. I look to moving into the property what is the right way to cancel my claim for housing benefit at the property im in currently?

    Sorry for all the questions

    Thank you in advance for your time

    1. I think your solicitors should send their earlier letter again. The DWP handle mail electronically, so if a letter is not sent to the correct mail handling address in Wolverhampton, it is possible the letter has gone astray.
      Property ownership is not currently a factor in benefit entitlement, but it is important if financial support for care is required.
      Provided your trust allows a property to be held, I see no problem with that.
      I suggest you write to your council giving notice of the date you are to leave your rented property. Send it a few weeks in advance to avoid overpayment of benefits.

  6. Hi, I was wondering if my mother is entitled to some of my compensation for caring for me, I have been awarded 200k and £40,000 out of the £200,000 is for care I have received from her. Would I have to give her the full amount? And is she legally entitled to the money. Thank you.

    1. It sounds as if an award has been made, or a settlement reached which includes a claim for the gratuitous care provided by your mother. The amount was only included in your claim because the care has been provided by your mother. That part of the compensation belongs to your mother and you hold it on trust for her.
      Just because an amount is included in the claim, does not mean that amount was actually recovered. If there is any doubt as to how much was recovered for gratuitous care, your solicitor should be able to guide you.

  7. Thank you Mark. Your view is as I thought.
    Fortunately my son is working and fully able to support himself. He was advised to place his compensation in a pit to protect the award should he deteriorate physically and need benefits or care in the future.

  8. Thank you for your help Mark.
    Does that mean that my son could buy himself a house for him to live in, using a mortgage paid monthly from his own personal salary (so nothing at all to do with the trust) and he could open a lifetime ISA in his personal name to benefit from the bonus towards the purchase or is he prevented from holding a Lifetime or help to buy isa because the trust, of which he is the beneficiary, has previously purchased a property meaning he is not now a ‘first time buyer’?

    1. I am not a property or tax lawyer, but from what I have come across with other clients I will offer a view.
      If your son has a bare or simple trust, he is the taxpayer, so the property held by the trust is his for stamp duty purposes. He is therefore not a first time buyer for the second property.
      He can certainly hold an ISA as an individual, but the trust cannot hold an ISA.
      The trusts I deal with are to hold personal injury compensation to protect entitlement to means tested benefits and financial support for care. Does your son’s trust serve either purpose?

  9. My son has a PI trust and the trust purchased a property several years ago, in which tenants live. The rent is paid directly to the trust. In the future my son wishes to purchase a property from his own personal income, which he will live in. Is he entitled to open a LISA or a help to buy isa and use the funds towards his property purchase?

    1. As I understand the ISA rules, an ISA can only be held by an individual and not by a trust.
      Holding a rented property in a trust and the trust receiving the rent, makes a lot of sense.
      On current rules, means tested benefits are not affected by ownership of the home you live in. This must change. The benefit of your own residence being in trust is that it will be ignored if you need financial help with care.
      Trust funds, subject to the trust itself allowing for it, can be used to buy a personal residence, or part buy a residence. The property could be part owned by the trust, or the trust could make a loan for part of the purchase cost, the loan to be repaid on the sale of the property. The loan would be registered, just like a mortgage.

  10. Hi Mark
    Quick question.
    I have a bare trust based on a personal injury, I know there are restrictions with a trust.I want to give my son money to go traveling,is this classed as acceptable in the eyes of the dwp/ tax,I mean will this break the terms of a bare trust.

    1. Not all trusts are the same, but if the trust can be used for your benefit, in the broadest terms, such a payment to you son, made direct from the trust will not create a problem. It is vital the payment be made direct from the trust.

  11. I have a trust account setup where I am the sole Beneficiary . There are two trustee’s and I am one of them. I have setup a account to invest in crowd funding via the trust.

    The crowdfunding platform have verified the account and set in up in the name of the trust.

    I wanted to invest today in a certain investment. I picked the investment then I need to transfer the funds.

    I my trustee one and my mum trustee two went in branch and instead of sending the funds straight from the trust bank account to trust investment account. She transferred money to my sole account the beneficiary and then to the trust investment .

    This is obviously wrong as the money should of went direct from trust account.

    Is there any complications what could come of this ?

    It is a personal injury trust. Could the money be put back into trust ?


    1. It is an obvious mistake. Pay the money back to the trust and start again. In case your bank statements are ever reviewed by a benefit agency, it would be helpful to have a letter from the bank which acknowledges the error.
      Others may ask if crowd funding is an investment open to trustees of personal injury trusts. The answer lies within your trust, as it is there the powers of th e trustees are contained.

  12. Before my accident i was claiming lower rate DLA and working. Since my accident two years ago I claimed contribution esa for one year and now on higher rate DLA because of my accident. I have recently had an operation to improve the injuries the accident caused and go back to work. (I will still be in pain and will never fully recover)I would be on tax credits and working tax credits at work.
    My question is the benefits agency is seeking through CRU the full amount of benefits paid to me because of the accident to be repaid to them. Is this correct? (Is DLA now changed to PIP means tested?)
    Would setting up a trust fund stop this? Sould it it be a Bare trust fund and what is a Bare trust fund with a deed?
    The benefits agency wants any compensation left over to cover any benefits they may pay to me.

    1. You are talking about two quite separate concepts.
      The defendant who is to pay you compensation, must, in addition to your compensation, repay to the government all benefits you have received as a result of the injury you suffered. This is called the recoupment process, the government recouping its benefits. Within the calculation of your compensation, you must give credit for certain benefits against certain parts of your claimed compensation. For instance, if your claim includes the care you need, you must give credit for state benefits received for care against that aspect of your compensation claim. Full details can be found here.
      A personal injury trust has nothing to do with the recoupment process. Once compensation is to be paid, you must then decide if any benefits you currently receive, or may receive in the future, will be reduced or disallowed because of the amount of compensation received. For help have a look here.

  13. Hi I have no savings claim universal credit and housing benifits and I am currently doing a paid clinical trial I will receive £1.800 do i need to tell the benifits system and will it effect my benifits .

    1. You could be signing the trust document within two weeks if you are prompt in providing the information I need.
      What does take time, is opening the trust bank account. You need the trust document from me first to take to the bank. Banks take three weeks or more to open an account for the trustees.

  14. I have been told by my solicitor I need to set up a personal injury trust to protect my benefits, however I have nobody who I can ask to be trustees. Would it be possible to keep £5000 and put the rest into two accounts for my two children which they won’t have access to until they’re 18?

    1. That just does not work. You are hiding money in the bank account of someone else.
      You can be a trustee. I usually advise you should have two others acting as trustees with you. If the amount is not high and you do not intend to hold it for long, you could get away with you pls one other trustee.

  15. Hi, I have received a compensation cheque for £9700 for a fall I had 4 years ago, I receive housing benefit & council tax support so I wonder about setting up a trust I contacted a solicitor who advised the cost would be £1600 and asked me to contact them if I thought it was worth it! Truth is I plan on spending £5000 on a car but I don’t want the help we receive to be taken away! Help I have not cashed the cheque as I have only revived today

    1. It is not a huge amount of money, but it is enough to reduce your benefits.
      Buying a car from the compensation is not the answer, as benefit agencies will take the view such expenditure is not reasonable for someone receiving benefits. You could be treated as still having the price of the car and your benefits will be reduced.
      The answer is to set up a trust. The expenditure direct from the trust cannot be assessed as to its reasonableness, so if you need to, you can buy the car and still keep your benefits.
      The cost you have been quoted for setting up a trust is very high. I will work on a fixed fee of £400 plus VAT of £80, a total charge of £480.

      The way I work is set out here.

  16. Dear Mark

    I have a question regarding the changes that came into effect today with regards to the Lords Chancellors Discount rates.
    Does this change in the law apply to Criminal Injuries Compensation cases also?

    1. The Criminal Injuries Compensation Authority operates a compensation scheme for injuries caused by criminal acts. The scheme operates along similar lines to the general rules for compensation, but with some very marked limitations. The CICA scheme places limitations on the total award, on the amounts which can be claimed for earnings loss and the scheme sets the multipliers which are used to calculate future loss. A multiplier is the figure used to multiply an annual net loss to reflect losses which will be incurred in the future. It is these multipliers which will be increased by the change in the discount rate and the effect will be felt in the highest value cases, which exceed the maximum available from the CICA.
      So in theory there may be some difference, but in practice I think the change will be minimal.

      1. Hi Mark.

        Thank you for your reply, but I am somewhat confused when you say the change will be minimal.

        In my circumstances, I have a historical CICA case that is due to be finalised very shortly that falls under the 1996 Scheme.

        If say for instance that my future losses are calculated at £300k over the next 15 years, where as before the multiplier discount rate would decrease this amount significantly because of the lump sum payment, under the new rules the discount rate would actually “increase” the award. That was my understanding, or am I completely wrong?

        I was unsure if these changes to the lord chancellors discount rate even applied to the CICA as I could not find details for this anywhere online as all the websites and media only talk about personal injury claims and Insurance claims

        Kind Regards


        1. My reply related to the current CICA scheme. I do not claim expertise in CICA cases.
          The change to the discount rate only affects the calculation of future losses, not past losses, as past losses are actual losses.
          Under the current law for personal injury cases, so forgetting your question relates to the CICA, if a male is 50 years of age and is prevented working to age 65, his current net annual earnings figure is not multiplied by 15 years. Using the old 2.5% discount rate the multiplier would be 12.11, but using the new discount rate of 10.75% the multiplier would be 15.29. This would produce an increased loss of earnings claim, reflecting that investment of the money would actually produce a loss when compared with wage and general inflation. So if your future loss is not limited in any way by the old CICA scheme, the change in the discount rate will make a difference.
          Beware, the change to the discount rate has caused quite a fuss. The government has agreed to consult on the method used to calculate future losses, so do not hang about as I would not be surprised if the rules became less generous to claims.

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