Accumulation period

The period during which the trustees ( of a trust ( 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 ( (see accumulated income ( )). 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 ( beneficiaries under section 31 of the Trustee Act 1925).

The statutory rule against excessive accumulations ( 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 ( . However, the settlors ( 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 ( .

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