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Rules relating to trusts are to be modernised

A new Bill to modernise the rules relating to trusts has been introduced in the House of Lords.

The Perpetuities and Accumulations Bill will modernise the rules which restrict how long an owner can control the future ownership of property (perpetuities) and how long trustees can add income to capital (accumulations). The rules are designed to prevent people locking wealth away indefinitely.

A spokesman for the Ministry of Justice said: "The Bill will restrict the rule against perpetuities to trusts and simplify its operation by introducing a single 125-year period. It will remove restrictions on accumulations except for charities, which will be subject to a 21-year limit.

"Other than a limited right to opt in to a 100-year period, the changes will not affect pre-existing trusts or wills."

The Bill will implement recommendations put forward by the Law Commission in a report published in 1998.

Sir Terence Etherton, chairman of the Law Commission, welcomed the Bill and said reform of this ancient area of law is long overdue. He added: "The effects of the Bill will be felt particularly in commercial transactions, which will be freed from the unnecessary complexity added by these rules."

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