Commentary

I5.1302 Whether interest vested or contingent

IHT, trusts and estates

I5.1302 Whether interest vested or contingent

I5.1302 Whether interest vested or contingent

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:

  1.  

    •     have the power to apply the income for the maintenance, education or benefit of the infant2, and

  2.  

    •     are bound to accumulate the remainder3

If

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial