Accumulation period

The period during which the trustees ( www.practicallaw.com/8-107-7419) of a trust ( www.practicallaw.com/4-107-7416) may accumulate the trust income (that is, add it to the trust capital, rather than pay it out to or for the benefit of the beneficiaries ( www.practicallaw.com/9-382-5565) (see accumulated income ( www.practicallaw.com/7-382-5528) )). After the accumulation period has ended, the trustees are obliged to distribute trust income to, or for the benefit of, the beneficiaries (unless they have a power to accumulate income for minor ( www.practicallaw.com/8-382-5716) beneficiaries under section 31 of the Trustee Act 1925).

The statutory rule against excessive accumulations ( www.practicallaw.com/7-382-5694) applies to trusts that took effect, and wills executed, before 6 April 2010. For these trusts, the accumulation period must be one of six periods set out in:

The Perpetuities and Accumulations Act 2009 abolished these statutory restrictions for trusts taking effect, and wills executed, on or after 6 April 2010, except for charitable trusts ( www.practicallaw.com/3-107-5899) . However, the settlors ( www.practicallaw.com/7-107-7245) of non-charitable trusts can still choose to include restrictions on accumulation in the trust document. For more information, see Practice note, Perpetuities and Accumulations Act 2009: how the law has changed: Changes to the rule against excessive accumulations ( www.practicallaw.com/6-386-6091) .

{ "siteName" : "PLC", "objType" : "PLC_Doc_C", "objID" : "1247245072529", "objName" : "Accumulation period", "userID" : "2", "objUrl" : "http://uk.practicallaw.com/cs/Satellite/resource/3-382-5530?null", "pageType" : "Resource", "academicUserID" : "", "contentAccessed" : "true", "analyticsPermCookie" : "2-62dceab2:15b0b6ed4bb:-633a", "analyticsSessionCookie" : "2-62dceab2:15b0b6ed4bb:-6339", "statisticSensorPath" : "http://analytics.practicallaw.com/sensor/statistic" }