Protected Capital Trust Fund

A Protected Capital Trust Fund is the most important financial asset instrument at our disposal for the protection of funds for disabled beneficiaries. It allows for the free contribution of capital in the form of cash or other assets with the objective of meeting the necessities of an individual with a specific grade of disability.

Who could constitute it ?

The fund may be created by anyone, although they are most commonly constituted as a trust by parents for the benefit of their disabled child. Once created, anyone can contribute money or other assets to the fund. The fund is administered as designated by the constitution; the administrator may be the founder(s) themselves or may be other designated persons in the case that the initially designated administrators are unable to fulfill the role.

Tax benefits

Contributions to Protected Capital Trust Funds have important tax benefits, including an IRPF deduction available for contributions by direct family members, to a maximum of €10,000/year. However, for this tax advantage to apply, the contributed amount must be retained for the first 5 year following contribution, except in the case of exceptional circumstances. Once this period has elapsed, the funds can be used to cover expenses and other necessities of the disabled beneficiary.

This is a relatively new instrument created by Law 41/2003. It is a specific civil fiscal regime which requires professional advisory services and a notary to formalize its constitution.

D. Valero Soler
Notary Barcelone