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.
References in periodicals archive
* Accumulation and Maintenance Trust
(A&M trust): a Type of discretionary trust used to benefit beneficiaries who are under the age of 25.
In recent years the "accumulation and maintenance trust
" has emerged as one of the most popular tools to give whilst still minimising tax liabilities and imposing some conditions over the use of the gift.
An Accumulation and Maintenance Trust
is a type of discretionary trust and may be used to benefit beneficiaries who are under the age of 25.
The rules apply to accumulation and maintenance trusts
and interest in possession trusts, which are generally set up by wealthy people to avoid inheritance tax.
The issue relates to Gordon Brown's announcement that he was changing the tax treatment of accumulation and maintenance trusts
and interest in possession trusts.
Before the Budget, Accumulation and Maintenance Trusts
(A&M) and Interest in Possession Trusts (IIP) benefited from favourable inheritance tax treatment.