Q&As

Section 36(9) of the Trustee Act 1925 provides: (9) Where a trustee lacks capacity to exercise their functions as trustee and is also entitled in possession to some beneficial interest in the trust property, no appointment of a new trustee in their place shall be made by virtue of paragraph (b) of subsection (1) of this section unless leave to make the appointment has been given by the Court of Protection. What does ‘entitled in possession to some beneficial interest in the trust property’ mean in this context? In particular, does it include a beneficiary under a discretionary trust?

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Produced in partnership with Oliver Auld of Charles Russell Speechlys LLP
Published on LexisPSL on 29/10/2019

The following Private Client Q&A produced in partnership with Oliver Auld of Charles Russell Speechlys LLP provides comprehensive and up to date legal information covering:

  • Section 36(9) of the Trustee Act 1925 provides: (9) Where a trustee lacks capacity to exercise their functions as trustee and is also entitled in possession to some beneficial interest in the trust property, no appointment of a new trustee in their place shall be made by virtue of paragraph (b) of subsection (1) of this section unless leave to make the appointment has been given by the Court of Protection. What does ‘entitled in possession to some beneficial interest in the trust property’ mean in this context? In particular, does it include a beneficiary under a discretionary trust?

Section 36(9) of the Trustee Act 1925 provides: (9) Where a trustee lacks capacity to exercise their functions as trustee and is also entitled in possession to some beneficial interest in the trust property, no appointment of a new trustee in their place shall be made by virtue of paragraph (b) of subsection (1) of this section unless leave to make the appointment has been given by the Court of Protection. What does ‘entitled in possession to some beneficial interest in the trust property’ mean in this context? In particular, does it include a beneficiary under a discretionary trust?

An entitlement in possession comprises a present right to present enjoyment, that is a vested and indefeasible interest in the net trust income (see Pearson v IRC). It does not include a beneficial interest that is defeasible or discretionary.

Section 36 of the Trustee

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