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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
Updated
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Legal background to trusts & estates: absolute interest in property

A person with complete and absolute ownership of an item of property, has both the

  • legal interest, and
  • beneficial interest.

In legal terms the interest is absolute, vested and in possession. ‘Absolute’means entitlement to the item of property not limited by any other person’s interest.In strictness it covers income and capital. ‘Vested’ or (‘indefeasiblyvested’) means nothing can happen to take away the person’s beneficialentitlement without their say so. ‘In possession’ means the title is notdependent on something yet to happen.

It entitles the owner to whatever benefit comes from the property. This may be

  • the income it produces, or
  • the pleasure of using it, or looking at it.