Finance | Hannah Armit | 2 Oct 2008

Hannah Armit comments on proposed changes to how trusts treat income and capital.

In July 2004, the Law Commission published its consultation paper Capital and Income in Trusts: Classification and Apportionment. the project was suspended until January 2008, but work has now recommenced. the main purpose of the consultation was to examine the rules on the treatment of investment returns by trustees with a view to introducing more flexibility in this area. A major theme is whether and how trustees might adopt a total return approach to investment.