Accumulation and maintenance trusts

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

What is an accumulation and maintenance trust?

An accumulation and maintenance trust (A&M trust) is a particular type of settlement intended to make provisions for children and young adults up to the age of 25. The key feature is that trustees are given discretion over how to use the income for the benefit of the child up to a specified age. They may accumulate it to augment the child’s capital entitlement, or they may apply it for the purpose of maintaining the child. Income accumulated in early years may be spent in later years when the child is older. The child becomes entitled to the income as it arises when he reaches the age of 18, or at a later age if the trust instrument so provides.

Typically, a beneficiary has a future entitlement to a fixed share of the trust fund and the income arising on it. However, trustees often have the power to vary the allocation of the total income among beneficiaries before they gain an interest in possession. They may

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