Perpetuities and Accumulations Act 2009

Document Number:2009 CHAPTER 18
 
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An Act to amend the law relating to the avoidance of future interests on grounds of remoteness and the law relating to accumulations of income.

[12 th November 2009]

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Application of rule against perpetuities

1 Application of the rule

(1) The rule against perpetuities applies (and applies only) as provided by this section.

(2) If an instrument limits property in trust so as to create successive estates or interests the rule applies to each of the estates or interests.

(3) If an instrument limits property in trust so as to create an estate or interest which is subject to a condition precedent and which is not one of successive estates or interests, the rule applies to the estate or interest.

(4) If an instrument limits property in trust so as to create an estate or interest subject to a condition subsequent the rule applies to—

(a) any right of re-entry exercisable if the condition is broken, or

(b) any equivalent right exercisable in the case of property other than land if the condition is broken.

(5) If an instrument which is a will limits personal property so as to create successive interests under the doctrine of executory bequests, the rule applies to each of the interests.

(6) If an instrument creates a power of appointment the rule applies to the power.

(7) For the purposes of subsection (2) an estate or interest includes an estate or interest—

(a) which arises under a right of reverter on the determination of a determinable fee simple, or

(b) which arises under a resulting trust on the determination of a determinable interest.

(8) This section has effect subject to the exceptions made by section 2 and to any exceptions made under section 3.

(9) In section 4(3) of the Law of Property Act 1925 (c. 20) (rights of entry affecting a legal estate) omit the words from “but” to the end.

2 Exceptions to rule’s application

(1) This section contains exceptions to the application of the rule against perpetuities.

(2) The rule does not apply to an estate or interest created so as to vest in a charity on the occurrence of an event if immediately before the occurrence an estate or interest in the property concerned is vested in another charity.

(3) The rule does not apply to a right exercisable by a charity on the occurrence of an event if immediately before the occurrence an estate or interest in the property concerned is vested in another charity.

(4) The rule does not apply to an interest or right arising under a relevant pension scheme.

(5) The exception in subsection (4) does not apply if the interest or right arises under—

(a) an instrument nominating benefits under the scheme, or

(b) an instrument made in the exercise of a power of advancement arising under the scheme.

3 Power to specify exceptions

(1) The Lord Chancellor may by order provide that the rule against perpetuities is not to apply—

(a) in cases of a specified description, or

(b) if specified conditions are fulfilled.

(2) Different descriptions and conditions may be specified for different purposes.

(3) Any order under this section may include such supplementary, incidental, consequential or transitional provisions as appear to the Lord Chancellor to be necessary or expedient.

(4) In this section “specified” means specified in the order.

(5) The power to make an order under this section is exercisable by statutory instrument.

(6) A statutory instrument containing an order under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

4 Abolition of existing exceptions

These provisions cease to have effect—

(a) section 121(6) of the Law of Property Act 1925 (c. 20) (rule against perpetuities not to apply to certain powers and remedies);

(b) section 162 of that Act (declaration that rule does not apply in certain cases);

(c) section 163 of the Pension Schemes Act 1993 (c. 48) (rule not to apply to trusts and dispositions concerning certain pension schemes).

Perpetuity period

5 Perpetuity period

(1) The perpetuity period is 125 years (and no other...

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