This is a trust where the beneficiary is entitled to the trust income as it arises.
Prior to 22 March 2006, these were taxed in the same way as absolute trusts. However, following changes in legislation, this is no longer the case and this type of trust is subject to the relevant property regime applicable to discretionary trusts. Any trusts created on or after 22 March 2006, or varied on or after this date, are liable to potential entry, exit and periodic charges.
This type of trust may be suitable where the trustees are investing in collectives because they can request that the income is paid directly to the beneficiary, who will be liable to tax at their marginal rate. The beneficiary can make use of their available allowances.
Old Mutual Wealth does not offer this type of trust but an existing interest in possession trust can invest into an Old Mutual Wealth product.