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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
Updated
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Introduction to trusts: types of trust: accumulation and maintenance trust

An ‘accumulation and maintenance’ trust has some CGT privileges. (It used also to have IHT advantages until FA 2006 removed them.)

The basic conditions are that there is settled property (TSEM1102) where

  • there is no interest in possession
  • the income must be accumulated unless it is applied for the maintenance, education or benefit of a beneficiary within the next bullet
  • one or more beneficiaries must on or before reaching 25 become

    • entitled to the property or
    • entitled to an interest in possession

In other words, by that age they must have an interest in possession (TSEM1564).

If you are asked whether a trust qualifies as an accumulation and maintenance trust for CGT purposes, refer the query to SPT Capital Gains.