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Legal Terms - Accumulation
Accumulation refers to the ongoing process of adding the revenue generated by a fund to its capital, resulting in the fund's endless growth. Prior to the enactment of the Accumulation Act, it was permissible to accumulate wealth for the entire duration of the perpetual period, which was in effect in 1800.
(i.e. residing for more than 21 years: refer to the rule against perpetuities). The allowable periods for accumulation have been reduced and are specified in the Law of Property Act 1925 and the Perpetuities and Accumulations Act 1964. These periods include 21 years from the date of the disposition, the lifetime of the person who created the trust, and the time until a person mentioned in the disposition reaches adulthood. Income is commonly instructed to be accumulated in situations where the recipient is a minor, or when the interest in their favor is safeguarded or conditional, or if the conditions of a trust allow for discretion.
Accumulation refers to the ongoing process of adding the revenue generated by a fund to its capital, resulting in the fund's endless growth. Prior to the enactment of the Accumulation Act, it was permissible to accumulate wealth for the entire duration of the perpetual period, which was in effect in 1800.
(i.e. residing for more than 21 years: refer to the rule against perpetuities). The allowable periods for accumulation have been reduced and are specified in the Law of Property Act 1925 and the Perpetuities and Accumulations Act 1964. These periods include 21 years from the date of the disposition, the lifetime of the person who created the trust, and the time until a person mentioned in the disposition reaches adulthood. Income is commonly instructed to be accumulated in situations where the recipient is a minor, or when the interest in their favor is safeguarded or conditional, or if the conditions of a trust allow for discretion.
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