Power to accumulate income

The investments of a trust are likely to produce income. The trust deed will detail how the income should be dealt with by the trustees. This may be due to the beneficiaries as of right where they have an interest in possession, distributed to beneficiaries at the discretion of the trustees or where not distributed to the beneficiaries there may be a direction or an option to accumulate the income. ‘Accumulating the income’ means saving or reinvesting the income instead of paying it out to beneficiaries as it arises. It is