ACCUMULATION & MAINTENANCE

An accumulation and maintenance trust is one that is specifically established for the education and maintenance of the beneficiaries and is of particular application in providing for the future of young children. The income of such a trust is accumulated (to the extent that it is not used usually at the sole discretion of the trustees) for the maintenance, education or benefit of the trust’s beneficiaries. On reaching a specified age, such as 18 after the termination of a child’s minority or more commonly in the United Kingdom 25 (because of Inheritance Tax Planning), the trust deed would direct that the income of the trust (or a specified proportion thereof) becomes a beneficiary’s absolutely. In the United Kingdom, an accumulation and maintenance trust may only accumulate its income for a period of 21 years (from the date of a trust’s inception), after which any income that arises must be distributed. However, trusts subject to Manx Law, are able to accumulate income throughout the perpetuity period, i.e. life, of the trust.

Crossman Trust Company Limited PO Box 1, Portland House, Station Road, Ballasalla, Isle of Man, IM99 6AB, British Islands. Telephone: +44 (0)1624 825805 or 822816, Fax: +44 (0)1624 824570, E-Mail: mail@crossmantrust.com