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The Trusts (Capital and Income) Act 2013 has received Royal Assent.

The Act derives from the Law Commission report, “Capital and Income in Trusts: Classification and Apportionment”. It enacts three principal reforms:

• abolishing some of the equitable and statutory rules of apportionment for all new trusts
• classifying receipts following tax-exempt corporate demergers as capital, and
• making total return investment more easily accessible to charitable trusts with a permanent endowment.

Professor Elizabeth Cooke, the Law Commissioner responsible for the project, said:

“The Trusts (Capital and Income) Act 2013 brings much-needed reform to certain specialist aspects of trust law that have been widely regarded as problematic. It will have a helpful impact on those who administer charities, and on individuals who benefit from both private and charitable trusts”.

The Act received Royal Assent on 31 January 2013. It completed its passage through Parliament on 7 January 2013 having followed the procedure for uncontroversial Law Commission Bills. It will come into force on a date to specified by the Secretary of State.

Notes for editors

1. The Law Commission is a non-political independent body, set up by Parliament in 1965 to keep all the law of England and Wales under review, and to recommend reform where it is needed.

2. For more details on this project, visit www.lawcom.gov.uk

3. For all press queries please contact:
Phil Hodgson, Head of External Relations:  020 3334 0230
Jackie Samuel:  020 3334 0216
Email:  communications@lawcommission.gsi.gov.uk