Capital and income in trusts: classification and apportionment
A project to reform the complicated rules governing (1) the classification of trust receipts and outgoings as capital or income and (2) the requirement that trustees apportion capital and income in order to keep a fair balance between different beneficiaries.
The Consultation paper published July 2004 (Law Com No 175).
Provisional proposals
- new, simpler rules for the classification of corporate receipts by trustee-shareholders
- a new trustee power to allocate investment returns and trust outgoings as capital or income (in place of the existing rules of apportionment)
- clarification of the mechanism by which trustees of permanently endowed charities may invest on a "total return" basis
We received 40 responses to the consultation paper.
A report and draft Bill are expected in Summer 2006, dependent on the team's work on trustee exemption clauses.
For more information, contact the property and trust law team or go the team page.
NOTE - We are happy to provide information about our projects. However, we cannot give legal advice or deal with individual cases. Nor do we help with student