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accumulation


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N.

The continual addition of the income of a fund to the capital, so that the fund grows indefinitely. Before the Accumulation Act 1800 accumulation was permitted for the length of the perpetuity period (i.e. lives in being plus 21 years: see rule against perpetuities). The periods for which accumulation is now permitted are shorter; they are listed in the Law of Property Act 1925 and the Perpetuities and Accumulations Act 1964 and include a period of 21 years from the date of the disposition, the period of the life of the settlor, and the duration of the minority of any person mentioned in the disposition. Income is often directed to be accumulated if (for example) the beneficiary is a minor, or the interest in his favour is protected or contingent, or if the terms of a trust are discretionary.

Subjects: Law.


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