New South Wales Consolidated Acts

TRUSTEE ACT 1925 - SECT 43

43 Maintenance and accumulation-instruments that came into operation on or after 1 March 1926

(1) Where any property is held in trust for a person who is for the time being an infant for any interest whatsoever, whether vested or contingent, and whether absolute or liable to be divested, the trustee may at the trustee’s sole discretion pay to the parent or guardian, if any, of the infant, or to the person with whom the infant is for the time being residing, or otherwise apply to the whole or any part of the income of the property, for or towards the maintenance education or benefit of the infant.

(1A) The power conferred by subsection (1) extends to the payment, after the commencement of the Minors (Property and Contracts) Act 1970 , of income to an infant who has reached the age of eighteen years, but this subsection does not limit the generality of subsection (1).

(2) The power conferred by subsection (1) may be exercised whether there is any other fund applicable to the same purpose, or any person bound by law to provide for the maintenance or education of the infant, or not.

(3) The power conferred by subsection (1) shall not prejudice or affect any prior interest in or charge over the property:
Provided that where the interest for which the property is held in trust for the infant is future or contingent, and the trust for the infant would not, apart from the provisions of this section, carry the intermediate income, and the same is not expressly or specifically disposed of but would pass to some other person in virtue only of an interest to which that other person is entitled under a residuary or a general gift in the instrument, if any, creating the trust, or in the absence of such a gift then as upon intestacy or as upon a resulting trust, the trust for the infant shall, during the infancy, if the interest of the infant so long continues, be deemed to carry the intermediate income, and the interest of such person shall not be deemed to be a prior interest within the meaning of this subsection.

(4) During the infancy, if the interest of the infant so long continues, the trustee shall accumulate all the residue of the income in the way of compound interest by investing the same, and the resulting income thereof from time to time on securities on which the trustee is by the instrument, if any, creating the trust, or by law authorised to invest the trust money.

(5) During the infancy, if the interest of the infant so long continues, the trustee may at any time, if he or she thinks fit, apply the accumulations or any part thereof as if the same were income arising in the then current year.

(6) In the following cases the trustee shall hold the accumulations absolutely for the infant, that is to say:

(a) if otherwise than by virtue of this section the infant is entitled to the income which has been accumulated, or

(b) if under the provisions of the instrument, if any, creating the trust, the infant is entitled on attaining the age of twenty-one years or on the occurrence of some prior event to a vested interest, whether absolute or liable to be divested, in fee-simple or in full ownership in the property from which the income arose, and the infant in fact becomes entitled to such vested interest.

(7) Any accumulations held in trust in accordance with subsection (6) shall be so held without prejudice to any provision with respect thereto contained in any settlement made by the infant under any statute during the infant’s infancy.

(8) Except in the cases mentioned in subsection (6), and notwithstanding that the person for whom the property is held in trust had a vested interest in the income by virtue of this section, the trustee shall hold the accumulations as an accretion to the capital of the property from which the accumulations arose, and as one fund with such capital for all purposes, and so that if such property is a settled estate within the meaning of Part 4 of the Conveyancing and Law of Property Act 1898 , the accumulations shall be held on the same trusts as if the same were capital money arising therefrom.

(9) This section extends to a vested annuity in like manner as if the annuity were the income of property held by a trustee in trust to pay the income thereof to the annuitant for the same period for which the annuity is payable, save that in any case accumulations made during the infancy of the annuitant shall be held in trust for the annuitant absolutely.

(9A) This section does not affect such right as an infant may have in consequence of the Minors (Property and Contracts) Act 1970 upon reaching the age of eighteen years or otherwise, to call for payment or transfer of property to which the infant is absolutely entitled.

(10) This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument, and to the provisions therein contained.

(11) This section, and the repeal of section 18 of the Trustee Act 1898 by this Act, apply only where the instrument, if any, creating the trust comes into operation after the commencement of this Act.

Note: This Act repealed all of the provisions of the Trustee Act 1898 ( "the 1898 Act"), other than section 1 (Name of Act) and section 18. The above subsection limited the ongoing application of section 18 of the 1898 Act to any instrument creating a trust where the instrument came into operation before 1 March 1926. Section 43A contains provisions transferred from section 18 of the 1898 Act by the Statute Law (Miscellaneous Provisions) Act 2011 .