(1) Income may be directed to be held "on protective trusts" for the benefit
of any person (in this section called
"the principal beneficiary" ) for the period of the principal beneficiary's
life or for any less period, and where there is such a direction the income
shall during the period (in this section called
"the trust period" ), and without prejudice to any prior interest, be held
upon trust as provided in this section.
(3) The trust of the income shall fail or
determine in any of the following cases, as well as on the termination of
the trust period, whichever first happens, that is to say, if
the principal beneficiary does or attempts to do or suffers any act or thing
or if any event happens whereby if the income were payable to
the principal beneficiary absolutely, the principal beneficiary would be
deprived of the right to receive the same or any part thereof.
(4) The trust
of the income shall so fail or determine, whether the principal beneficiary
does or attempts to do or suffers the act or thing before or after the
termination of any prior interest.
(5) The trust of the income shall not so
fail or determine by reason of an advance under any statutory or express
power.
(6) If the trust of the income fails or determines during the
subsistence of the trust period, the income shall during the residue of that
period be held upon trust for the application thereof--
(a) for the
maintenance, support, or otherwise for the benefit of all or any one or more
exclusively of the others of the principal beneficiary and his or her spouse,
if any, and his or her children or more remote issue, if any, as the trustee
in the trustee's absolute discretion thinks fit, or
(b) if there is no spouse
or issue of the principal beneficiary in existence, then for the maintenance,
support, or otherwise for the benefit of all or any one or more exclusively of
the other or others of the principal beneficiary and the persons who would, if
the principal beneficiary were actually dead, be entitled to the trust
property or the income thereof or of the annuity fund, if any, or arrears of
the annuity, as the case may be, as the trustee in the trustee's absolute
discretion thinks fit.
(7) This section extends to an annuity or other
periodical income payment directed to be held on protective trusts.
(8) Any
trusts implied by this section may be set aside in any case where an express
trust to the same effect might be set aside.
(9) 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.
(10) This section applies
only to trusts created after the commencement of this Act.
(11) In this
section--
"spouse" means--
(a) the person to whom a person is legally married (including
the husband or wife of a person), or
(b) the other party to a
de facto relationship in which the parties have cohabited for a period of not
less than 2 years,
but where more than one person would so qualify as a
spouse, means only the last person so to qualify.
(11A) In this section, a reference to a child of a
person includes, if the person is in a de facto relationship, or a domestic
relationship within the meaning of the Property (Relationships) Act 1984 , a
reference to the following--
(a) a child born as a result of sexual relations
between the parties to the relationship,
(b) a child adopted by both parties,
(c) in the case of a de facto relationship between a man and a woman, a child
of the woman of whom the man is the father or of whom the man is presumed, by
virtue of the Status of Children Act 1996 , to be the father (except where
the presumption is rebutted),
(12) Subsection (11) does not apply in relation to a trust created before the
commencement of the amendments made to this Act by the Property
(Relationships) Legislation Amendment Act 1999 .