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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
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Legal background to trusts & estates: vested interest - definition

‘Vested’ means that the interest either already is or will eventually come into the hands of the beneficiary. If this occurs after the beneficiary dies, it will go to the personal representatives of the beneficiary.

The future event must be certain to happen - for example, the death of another person. It does not matter if it is not possible to say when this will be.

If the event is not certain to occur the interest is contingent (TSEM6211) - not vested. For example, the event may be the beneficiary reaching the age of thirty.

Sometimes a trust may provide for a beneficiary to lose a vested interest if an event happens. Until then the interest is vested in possession. It is not contingent.