Interests in possession: trustees' discretion
Under old Section 72(3)(b) `life interest’ did not include any right contingent on theexercise of the discretion of the trustee or some other person. In the light of Pearson vIRC, see CG36320-CG36321, this provision probably did no more than restate the law. If thetrustees can exercise a discretion to take away the interest, because it is a revocablelife interest, or because they can defeat the interest by exercising a power ofappointment, then it can still be an interest in possession.
But where a will or trust deed provided for the application, in such manner and amount asthe trustees may decide, of the income of settled property for the benefit of X for hislife with remainder to Y absolutely, the interest of X is not a life interest in theproperty.