Bare trusts: charges
If trustees have to pay duty, taxes, costs or other outgoings, they can generally meet it out of the trust property, and may refuse to hand it over to the beneficiary until these liabilities are satisfied. This right to hold on to the property is disregarded in determining whether the beneficiary is absolutely entitled or not. See TCGA92/S60 (2).
In contrast, if trustees have to pay an annuity out of property which they hold, then that property is settled property. The annuity is not `outgoings’, see Stephenson v Barclays Bank Trust Co, 50TC374 at 386A-F. Walton J makes it clear that the annuity is a beneficial right under the settlement and therefore not outgoings.