Q&As

Can a company be a discretionary beneficiary under a discretionary trust?

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Produced in partnership with Lynne Counsell of 9 Stone Buildings
Published on LexisPSL on 10/02/2020

The following Private Client Q&A Produced in partnership with Lynne Counsell of 9 Stone Buildings provides comprehensive and up to date legal information covering:

  • Can a company be a discretionary beneficiary under a discretionary trust?
  • The nature of discretionary trusts
  • Beneficiaries of a discretionary trust

The nature of discretionary trusts

The nature of a discretionary trust is often analysed in the context of tax cases. See Pearson v IRC and Re Trafford’s Settlement.

Trusts can be divided into two categories—namely, fixed trusts and discretionary trusts, depending on the nature of the beneficial interests under the trust. A fixed trust is one whereby a beneficiary or beneficiaries have a current entitlement to a defined part of the net income or capital of the trust fund. See: Nature and classification of trusts—overview.

A discretionary trust is a more flexible type of trust

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