Where income is accumulated in the hands of the trustees, the tax treatment of that income depends on whether the beneficiary has a vested interest (ie is absolutely entitled to the income) or a contingent interest. This is primarily a question of trust law. The problem usually arises where the beneficiary is an infant.
Where the beneficiary under a trust which carries the intermediate income1, is an infant, the trustees:
- Ìý
•ÌýÌýÌýÌý have the power to apply the income for the maintenance, education or benefit of the infant2, and
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•ÌýÌýÌýÌý are bound to accumulate the remainder3
If the infant attains the age of 18, or marries under that age, the accumulations become his absolutely, if he had a vested interest in the income during infancy,
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Web page updated on 17 Mar 2025 16:54