Trusts (Income and Capital) Act 2013 section 1

Disapplication of apportionment etc rules

Section 1 abolishes, for trusts created on or after 1 October 2013, several long-standing rules that required trust income and capital to be apportioned between beneficiaries with different interests.

• Trust income is treated as belonging to the beneficiary entitled to it at the time it actually arises, rather than being apportioned on a day-to-day basis over the period it covers.
• Four historic equitable rules — Howe v. Earl of Dartmouth (both parts), Re Earl of Chesterfield's Trusts, and Allhusen v. Whittell — no longer apply, removing complex requirements to sell, convert, or redistribute trust property between life tenants and remaindermen.
• Although the duty to sell certain residuary estate is abolished, trustees retain the power to sell that property if they choose to do so.
• All of these default changes can be overridden if the trust instrument or the power under which the trust was created expresses a contrary intention.