Soton Equity and Trusts - alastairhudson.com

The maximum period (under the case law) for the vesting of interests under trusts: a
life or lives in being + 21 years.
2) Trusts created after 16 July 1964
*ss. 1, 3 and 4 of the Perpetuities and Accumulations Act 1964.
The parties “wait and see” for a statutory limitation period whether or not the
trust comes to an end, further to s.3.
If it does not, then the class closing rules in s.4 apply so as to close the
beneficial class to any future members.
3) Trusts created after 6 April 2010
Perpetuities and Accumulations Act 2009
(a)
The ambit of the Act
Section 1 describes the ambit of the PAA 2009, subject to the notion in s.1(1) that
“The rule against perpetuities applies (and applies only) as provided by this
section”
(b)
(c)
(d)
Hence, the Act applies to
trusts with successive interests;
trusts subject to some condition precedent (such as “the beneficiary must
reach the age of 21”);
trusts subject to some condition subsequent (such as “provided that the
beneficiary does not marry”);
wills with successive interests; and
powers of appointment.
The statutory perpetuity period
s.5(1): ‘The perpetuity period is 125 years (and no other period).’
Section 5(2): s.5(1) applies “whether or not the instrument … specifies a perpetuity
period; and a specification of a perpetuity period in that instrument is ineffective”.
Section 6: the starting point for measuring the period of 125 years is the time at
which the relevant instrument takes effect.
Trusts which would otherwise be invalid
Section 7: “wait and see” until the statutory period has expired and then any unused
parts of the trust come to an end.
Section 8 then introduces a “class closing” rule to eliminate beneficiaries once the
statutory perpetuity period has been reached.
Non-charitable purpose trusts
Section 18 provides that nothing in the Act affects the rule that “limits the duration
of non-charitable purpose trusts”
Summary
Definitions
Re Hay’s Settlement Trusts
Fixed Trusts
IRC v Broadway Cottages
Mere powers
Re Gulbenkian
Discretionary trusts
McPhail v Doulton
Personal powers
Re Hay’s Settlement Trusts
Alternative approaches
Re Baden No 2
Re Barlow
Re Tuck’s ST
Re Coxen
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