8. Trustee Powers: Maintenance and Advancement

Question 1

s 31 TA 1925

Answer 1

Power to apply income for minor beneficiaries

Question 2

s 31 TA 1925 Conditions

Answer 2

1. no contrary provision in the trust
2. minor beneficiaries who have some
   kind of interest in income, whether vested or contingent, but not where there are any ‘prior interests’ to income (ie. life tenant)

Question 3

Can trustees be compelled to exercise their powers under s 31 TA 1925

Answer 3

No

Question 4

s 32 TA 1925

Answer 4

Trustees have the power to pay or apply trust capital early for a beneficiary’s advancement

Question 5

Conditions for advancing trust capital under s 32

Answer 5

1. no contrary provision in the declaration of trust
2. beneficiary has an interest (vested or contingent) in capital
3. the capital is actually being used for / advancement of the BENEFICIARY (not their parent etc)
4. Written consent needed from any beneficiary with a prior interest (ie. life tenant)

Question 6

Maximum amount of capital which may be advanced under s 32

Answer 6

For trusts created after 1 October 2014,
the advance payment must not exceed the
beneficiary’s entitlement.
For trusts created on or before 1 October
2014, the trustees can only advance up to
half the beneficiary’s entitlement.