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Generally speaking, there are no strictures as to who may be a beneficiary of a trust; a beneficiary can be a minor, or under a mental disability (in fact many trusts are created specifically for persons with those legal disadvantages). It is also possible to have trusts for unborn children, although
371:
Although it is not the only role. Trusts have a variety of uses outside of the tax sphere, notably for protecting minor and disabled beneficiaries. Although because the tax treatment of trusts is usually complex in most countries, even when the trust is being used for non-tax related purposes, tax
206:
Although individual countries tend to have very detailed rules about the taxation of trusts, the three mechanisms whereby taxation is usually assessed is by either treating (i) the trust as a separately taxable entity in its own right, (ii) treating the trust property as still the property of the
181:
Similarly, where a trust gives rise to successive interest, the title of a remainderman is a prospective, or contingent, interest; although unlike a discretionary beneficiary, this is still a species of property that can be dealt with, much in the same way as a contingent or prospective debt.
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Historically, whilst the courts have been fairly amenable to the use of trusts in tax planning, as tax planning schemes have become more aggressive, so the courts have increasingly taken a restrictive view of their tax treatment.
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Because an interest under a trust is a species of property, adult beneficiaries of sound mind are able to deal with their rights under the trust fund as they could with any other species of property. They can sell it,
101:
Where a trust gives rise to sequential interests, from a tax perspective (and also from the point of view of trustee's duties), it is often necessary to differentiate beneficiaries sequentially, between:
397:(UK) the House of Lords asserted "Every man is entitled to do what he can to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be".
167:
In the case of a fixed trust, the beneficiary's interest is proprietary; they are the owners of an equitable interest in the property held under the trust.
358:(UK) it was argued that because a beneficiary might receive all the income, he should be treated as being entitled to all of the income, however, the
211:, and (iii) treating the trust property as belonging absolutely to the beneficiaries. Some jurisdictions apply different combinations of the rules in
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states that beneficiaries are entitled to see trust documents and have information about trust property. This entitlement is a proprietary right.
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There are various ways in which beneficiaries of trusts can be categorised, depending upon the nature and need of the categorisation.
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held that it could not be said that any individual beneficiary under a discretionary trust was entitled to any quantifiable share.
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as the beneficiary of a trust, and this often happens in sophisticated commercial transaction structures. With the exception of
51:), is the person or persons who are entitled to the benefit of any trust arrangement. A beneficiary will normally be a
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If all of the beneficiaries of the trust are adults and of sound mind, then they can terminate the trust under the
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For the purposes of various exercise of beneficiaries' rights, it is often necessary to distinguish between:
174:; in such cases the beneficiaries are dependent upon the exercise by the trustees of their powers under the
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Where the trust is a discretionary trust, the beneficiary may renounce his position as a class member; see
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256:, and require the trustees to transfer absolute legal title to the trust assets to the beneficiaries.
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discretionary beneficiaries, whom the trustees must make decisions as to the respective entitlements.
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The nature of a beneficiary's interest in the trust fund varies according to the type of trust.
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From the perspective of the trustees' duties, it is most common to differentiate between:
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fixed beneficiaries, who have a simple fixed entitlement to income and capital; and
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usually plays a considerable role relative to the use of trusts.
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67:, all trusts are required to have ascertainable beneficiaries.
137:), to whom the trustee owes basic duties arising by law; and
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Person(s) entitled to the benefit of a trust arrangement
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it, and do most other things that they could do with a
383:
Commissioners of Inland
Revenue v Duke of Westminster
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The position is slightly different in the case of a
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140:beneficiaries under an express trust (either an
372:planning considerations often come into play.
344:Gartside v Commissioners of Inland Revenue
113:those with a contingent interest, such as
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106:those with a vested interest, such as
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424:[2007] NSWSC 1068
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125:beneficiaries under a
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430:(NSW, Australia).
387:[1935] UKHL 4
348:[1967] UKHL 6
273:Beneficiary (general)
227:Beneficiaries' powers
172:discretionary trust
160:Rights and interest
27:(also known by the
253:Saunders v Vautier
192:Taxation of trusts
149:testamentary trust
320:orphan structures
299:Explanatory notes
217:capital gains tax
178:in their favour.
77:perpetuity period
61:charitable trusts
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452:Wills and trusts
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393:1 at p 19,
143:inter vivos
25:beneficiary
441:Categories
314:Quistclose
293:Cestui que
213:income tax
127:bare trust
46:cestui que
36:cestui que
29:Law French
330:Footnotes
278:Trust law
21:trust law
267:See also
251:rule in
238:mortgage
186:Taxation
288:Settlor
283:Trustee
209:settlor
57:company
410:Ch 408
316:trusts
234:assign
31:terms
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147:or a
145:trust
110:; and
49:trust
318:and
219:and
73:vest
42:and
23:, a
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381:In
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342:In
133:or
38:use
19:In
443::
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391:AC
352:AC
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79:.
155:.
117:.
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