TSEM1566 - 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. »Ê¹ÚÌåÓýappse 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. »Ê¹ÚÌåÓýapp law limits the period during which income may be accumulated.
Accumulated income becomes capital in the hands of the trustees. »Ê¹ÚÌåÓýappy may be able to pay it as if it were income but it remains capital.