sec.128Application of trust capital for beneficiary’s maintenance etc.

sec.128 Application of trust capital for beneficiary’s maintenance etc.

This section applies if, under a trust, a beneficiary is entitled to the capital, or any share of the capital, of the trust property. The capital, or the share of the capital, to which the beneficiary is entitled is the relevant capital . Subject to section 129 , the trustee may— pay or apply amounts out of the relevant capital for or towards the beneficiary’s maintenance, education or advancement (including past maintenance or education); or apply any part of the relevant capital for or towards any of those purposes. The amounts of the relevant capital paid or applied and the value of the parts of the relevant capital applied must not, in total, be more than the greater of— the prescribed amount under section 130 ; or one-half the relevant capital. See, however, section 133 in relation to amounts that are taken not to have been paid or applied. However, the court may, on application, authorise the trustee to— pay or apply greater amounts out of the relevant capital; or apply part of the relevant capital of greater value. The power to pay or apply amounts, or apply part of the relevant capital, may be exercised— whether the beneficiary is entitled to the relevant capital absolutely or contingently on the beneficiary reaching a stated age or on the happening of another event; or whether the beneficiary is entitled in possession, in remainder or in reversion. Also, it does not matter whether the beneficiary’s entitlement to the relevant capital— is liable to be defeated by the exercise of a power of appointment or revocation; or is liable to be diminished by an increase of the class to which the beneficiary belongs. (sec.128-ssec.1) This section applies if, under a trust, a beneficiary is entitled to the capital, or any share of the capital, of the trust property. (sec.128-ssec.2) The capital, or the share of the capital, to which the beneficiary is entitled is the relevant capital . (sec.128-ssec.3) Subject to section 129 , the trustee may— pay or apply amounts out of the relevant capital for or towards the beneficiary’s maintenance, education or advancement (including past maintenance or education); or apply any part of the relevant capital for or towards any of those purposes. (sec.128-ssec.4) The amounts of the relevant capital paid or applied and the value of the parts of the relevant capital applied must not, in total, be more than the greater of— the prescribed amount under section 130 ; or one-half the relevant capital. See, however, section 133 in relation to amounts that are taken not to have been paid or applied. (sec.128-ssec.5) However, the court may, on application, authorise the trustee to— pay or apply greater amounts out of the relevant capital; or apply part of the relevant capital of greater value. (sec.128-ssec.6) The power to pay or apply amounts, or apply part of the relevant capital, may be exercised— whether the beneficiary is entitled to the relevant capital absolutely or contingently on the beneficiary reaching a stated age or on the happening of another event; or whether the beneficiary is entitled in possession, in remainder or in reversion. (sec.128-ssec.7) Also, it does not matter whether the beneficiary’s entitlement to the relevant capital— is liable to be defeated by the exercise of a power of appointment or revocation; or is liable to be diminished by an increase of the class to which the beneficiary belongs.