CG37520 | Absolute entitlement: part of trust fund: immediately

Where there are successive contingencies affecting different parties, for example, where a trust is in terms that property is to vest in A, B, and C on their respectively reaching the age of 25, the following treatment should normally be adopted on the basis of the decision in Crowe v Appleby, 51TC457.

Each beneficiary should be regarded as having become absolutely entitled on the occurrence of the contingency to the appropriate share of assets which are readily divisible into shares, see CG37560, unless the trustees have an express power to decide which assets should go to a beneficiary in satisfaction of his beneficial interest, see CG37530.

Thus if, in the situation described above, the trustees have no such power of appropriation and own a holding of 300 ordinary shares in X Ltd, A should be regarded as becoming entitled to 100 ordinary shares in X Ltd on attaining age 25 and the trustees as disposing of the 100 shares under Section 71(1) on that date and as holding them thereafter as bare trustees for A.