Accumulation and maintenance trust legal definition of accumulation and maintenance trust
accumulation and maintenance trust
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accumulation and maintenance trust a special type of discretionary trust under which income is accumulated for beneficiaries or used for their maintenance. Special relief is given for INHERITANCE TAX purposes if all the beneficiaries have a grandparent in common (or the trust can only exist for 25 years) and the beneficiaries will become entitled to the assets on or before reaching the age of 25, at which point the property will pass to them absolutely or they will obtain an INTEREST IN POSSESSION in it. Transfers of property into such a trust are POTENTIALLY EXEMPT TRANSFERS and no inheritance tax is chargeable during the existence of the trust or at the time that the beneficiary becomes entitled to the assets or to an interest in possession therein.