Search -
Capital and Income in Trusts: Classification and Apportionment (HC)
Capital and Income in Trusts Classification and Apportionment - HC Author:Law Commission Trusts are important to the national economy and provide a range of benefits to individuals and charitable purposes. This project affects charitable and private trusts that are set up in a way which distinguishes capital and the income it produces. The project was referred to the Law Commission as a result of concerns about current trust law rai... more »sed during the passage of the most recent piece of trust legislation - the Trustee Act 2000 - through Parliament. The Law Commission was asked to consider, in particular: the rules governing the classification of trust receipts as income and capital; the circumstances in which trustees must apportion receipts and outgoings between income and capital; and the rights and duties of charity trustees in relation to investment returns on a charity's permanent endowment. In this report, "Capital and Income in Trusts: Classification and Apportionment (HC 426)", the Commission recommends the abolition of the equitable and statutory rules of apportionment for all new trusts and the introduction of a new rule of classification for tax-exempt corporate demergers. It also recommends a new statutory provision that will make total return investment more easily accessible to charitable trusts with a permanent endowment. These recommendations follow extensive consultation.« less