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HMRC internal manual

Trusts, Settlements and Estates Manual

Introduction to trusts: types of trust: trust that requires accumulation of income

A trust may require that all income be accumulated until a certain time. These are known as trusts to accumulate. No beneficiary is entitled to the income.

More normally, trustees will have discretion to apply income for the maintenance, education or benefit of a beneficiary with a requirement that they accumulate income not so used. This is more usual where a minor is involved but can apply to an adult beneficiary. The law limits the period during which income may be accumulated.

Accumulated income becomes capital in the hands of the trustees. They may be able to pay it as if it were income but it remains capital.