sec.124Child beneficiaries—application of trust income for maintenance etc.

sec.124 Child beneficiaries—application of trust income for maintenance etc.

This section applies if, under a trust, a trustee holds trust property for a beneficiary who is a child. The trustee may pay all or part of the income of the trust property to the beneficiary’s guardian (if any), or otherwise apply all or part of the income, for or towards the beneficiary’s maintenance, education or advancement (including past maintenance or education). The power conferred under subsection (2) may be exercised— whether the beneficiary’s interest in the trust property is a vested interest or a contingent or future interest or is absolute or liable to be divested; and whether or not— there is another fund that may be applied for the beneficiary’s maintenance, education or advancement; or there is another person who is bound by law to provide for the beneficiary’s maintenance or education. However, despite subsection (3) (a) , if the beneficiary’s interest in the trust property is a contingent or future interest, the power conferred under subsection (2) may be exercised only if the interest includes the intermediate income of the trust property. For subsection (4) and without limiting the Succession Act 1981 , section 33H , a contingent or future interest in the trust property is taken, during the beneficiary’s minority and while the beneficiary’s interest continues, to include the intermediate income if— the interest would not, apart from this section, include the intermediate income; and the intermediate income is not expressly or specifically disposed of, but would pass to some other person— only because of an interest to which the person is entitled under a residuary or a general disposition in the trust instrument; or in the absence of a disposition mentioned in subparagraph (i) , on intestacy or as a resulting trust. (sec.124-ssec.1) This section applies if, under a trust, a trustee holds trust property for a beneficiary who is a child. (sec.124-ssec.2) The trustee may pay all or part of the income of the trust property to the beneficiary’s guardian (if any), or otherwise apply all or part of the income, for or towards the beneficiary’s maintenance, education or advancement (including past maintenance or education). (sec.124-ssec.3) The power conferred under subsection (2) may be exercised— whether the beneficiary’s interest in the trust property is a vested interest or a contingent or future interest or is absolute or liable to be divested; and whether or not— there is another fund that may be applied for the beneficiary’s maintenance, education or advancement; or there is another person who is bound by law to provide for the beneficiary’s maintenance or education. (sec.124-ssec.4) However, despite subsection (3) (a) , if the beneficiary’s interest in the trust property is a contingent or future interest, the power conferred under subsection (2) may be exercised only if the interest includes the intermediate income of the trust property. (sec.124-ssec.5) For subsection (4) and without limiting the Succession Act 1981 , section 33H , a contingent or future interest in the trust property is taken, during the beneficiary’s minority and while the beneficiary’s interest continues, to include the intermediate income if— the interest would not, apart from this section, include the intermediate income; and the intermediate income is not expressly or specifically disposed of, but would pass to some other person— only because of an interest to which the person is entitled under a residuary or a general disposition in the trust instrument; or in the absence of a disposition mentioned in subparagraph (i) , on intestacy or as a resulting trust.