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Interest in Possession Trusts

Interest in Possession Trusts gives a named beneficiary (or beneficiaries) the right to any Trust income. This beneficiary is often referred to as the ‘life tenant’ of the Trust. The right to income could also be satisfied by allowing the life tenant to benefit from the Trust property without actually owning it.

For example, it may allow them to live rent free in a residential property owned by the Trust.  The Trustees cannot accumulate income within an Interest in Possession Trust.

Ultimately the beneficiaries of the Trust will be determined by the Trust Deed which is created at outset.

When making investments, the Trustees have responsibilities to both the life tenant and the beneficiaries and must take account each of their interests when choosing where to invest, unless the Trust says otherwise.

Trust planning is complex, and we strongly recommend that you contact us for further guidance.

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