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Accumulation and maintenance (A&M) trusts
I5.502 A&M trusts—overview
The terminology regarding accumulation and maintenance (A&M) trusts can be confusing.
From a trust law perspective it is still perfectly possible to create an A&M trust. A settlement for 'my grandson subject to him attaining the age of 21' is an A&M trust — the income and capital can be accumulated or applied for his maintenance using either express powers or the statutory powers of advancement under the Trustee Act 1925, s 31, 32. The trust is neither a discretionary trust nor an interest in possession.
However, for tax purposes it will form part of the relevant property regime and the tax treatment will mirror that of a discretionary trust.
When most practitioners refer to 'accumulation and maintenance' trusts they mean the type of trust which, prior to the Finance Act 2006, attracted favourable IHT treatment and, in limited cases, still does.
This Division discuss those trusts which fall into the favourable tax regime and the term 'accumulation
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Web page updated on 17 Mar 2025 16:34