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Power to apply income for maintenance and to accumulate surplus income during a minority

Trustees Act 1967

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—(1) Where any property is held by trustees in trust for any person for any interest, whether vested or contingent, then, subject to any prior interests or charges affecting that property —(a)during the infancy of that person, so long as his or her interest continues, the trustees may, at their sole discretion, pay to his or her parent or guardian (if any) or otherwise apply for or towards his or her maintenance, education or benefit, the whole or such part (if any) of the income of that property as may, in all the circumstances, be reasonable, whether or not there is —(i)any other fund applicable to the same purpose; or(ii)any person bound by law to provide for his or her maintenance or education; and(b)if that person on attaining 21 years of age has not a vested interest in the income, the trustees must from that time pay the income of that property and of any accretion mentioned in subsection (3) to him or her, until he or she either attains a vested interest in the income or dies, or until failure of his or her interest.(2) In deciding whether the whole or any part of the income of the property is during a minority to be paid or applied for the purposes mentioned in subsection (1), the trustees must have regard to the age of the infant and the infant’s requirements and generally to the circumstances of the case, and in particular to what other income (if any) is applicable for the same purposes; and where trustees have notice that the income of more than one fund is applicable for those purposes, then, so far as practicable, unless the entire income of the funds is paid or applied as mentioned in subsection (1) or the court otherwise directs, a proportionate part only of the income of each fund must be so paid or applied.(3) During the infancy of the person, so long as his or her interest continues, the trustees must accumulate all the residue of that income by investing it, and any profits from so investing it, from time to time in authorised investments, and must hold those accumulations as follows:(a)if the person —(i)attains 21 years of age, or marries under that age, and his or her interest in the income during his or her infancy or until marriage is a vested interest; or(ii)on attaining 21 years of age, or on marriage under that age, becomes entitled to the property from which the income arose in fee simple, absolute or determinable, or under a grant issued under the State Lands Act 1920 or absolutely,the trustees must hold the accumulations in trust for that person absolutely, and so that the receipt of that person after marriage, and though still an infant, is a good discharge; and(b)in any other case the trustees must, even though the person had a vested interest in the income, hold the accumulations as an accretion to the capital of the property from which the accumulations arose, and as one fund with such capital for all purposes,but the trustees may, at any time during the infancy of the person, so long as his or her interest continues, apply all or part of those accumulations as if they were income arising in the then current year.(4) This section applies in the case of a contingent interest only if the limitation or trust carries the intermediate income of the property, but it applies to a future or contingent legacy by the parent of, or a person standing in loco parentis to, the legatee, if and for such period as, under the general law, the legacy carries interest for the maintenance of the legatee, and in the latter case the rate of interest is (if the income available is sufficient and subject to any provision of the Rules of Court to the contrary) 5% per annum.(5) This section applies to a vested annuity in the same manner as if the annuity were the income of property held by trustees in trust to pay the income to the annuitant for the same period for which the annuity is payable, except that in any case accumulations made during the infancy of the annuitant must be held in trust for the annuitant or the annuitant’s personal representatives absolutely.(6) This section does not apply where the instrument (if any) under which the interest arises came into operation before 1 September 1929.

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