Commentary

I5.511 A&M trusts—required interest in capital

IHT, trusts and estates

I5.511 A&M trusts—required interest in capital

I5.511 A&M trusts—required interest in capital

Prior to 6 April 2008, a trust was a qualifying accumulation and maintenance (A&M) trust if one or more persons will become beneficially entitled to the settled property (or to an interest in possession in it) on or before attaining a specified age not exceeding 251.

As these trusts will have become an absolute interest or a qualifying interests in possession (QIIP — Division I5.2) since 6 April 2008 they are not discussed further.

After 5 April 2008, a trust is a qualifying A&M trust if:

  1.  

    (a)     one or more persons will become beneficially entitled to the settled property on or before attaining a specified age not exceeding 182, and

  2.  

    (b)     the trust was created before 22 March 2006 and condition (a) applied to the settled property immediately before 22 March 2006, and at all subsequent times3

This capital condition (referred to as the substituted condition) thus differs from the original one (ie the one that applied before 6 April 2008) in that the maximum age for entitlement is lowered from 25 to 18, and the entitlement at 18 (or younger) must be absolute and not merely for an interest in possession. HMRC previously said4 (now obsolete) that they accept that the substituted capital condition will be met even where there is a wide power of advancement which could be exercised so as to prevent a beneficiary taking absolutely at age 185. The exercise of such a power will not trigger an

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