Interests in possession: Board's Press Release
The Board’s Press Release of 12 February 1976 included the following explanation: `Aninterest in possession in settled property exists where the person having the interest hasthe immediate entitlement (subject to any prior claim by the trustees for expenses orother outgoings properly payable out of income) to any income produced by the property asthe income arises; a discretion or power, in whatever form, which can be exercised afterincome arises so as to withhold it from that person negatives the existence of an interestin possession. For this purpose a power to accumulate income is regarded as a power towithhold it, unless any accumulations must be held solely for the person having theinterest or his personal representatives. On the other hand the existence of a mere powerof revocation or appointment, the exercise of which would determine the interest wholly orin part (but which, so long as it remains unexercised, does not affect the beneficiary’simmediate entitlement to income) does not in the Board’s view prevent the interest frombeing an interest in possession.’
Although the Press Release was issued after the Court of Appeal decision in Pearson v IRC,it is consistent with the majority opinions of the House of Lords.