4(1)Section 71D (age 18-to-25 trusts) is amended as follows.U.K.
(2)For subsection (6)(c)(ii) substitute—
“(ii)if any of the income arising from any of the settled property is applied for the benefit of a beneficiary, it is applied for the benefit of B.”
(3)After that subsection insert—
“(6A)Where the income arising from the settled property is held on trusts of the kind described in section 33 of the Trustee Act 1925 (protective trusts), paragraphs (b) and (c) of subsection (6) have effect as if for “living and under the age of 25,” there were substituted “under the age of 25 and the income arising from the settled property is held on trust for B,”.
(4)In subsection (7), before paragraph (a) insert—
“(za)the trustees' having powers that enable them to apply otherwise than for the benefit of B amounts (whether consisting of income or capital, or both) not exceeding the annual limit,”.
(5)After that subsection insert—
“(7A)For the purposes of this section and section 71E, the “annual limit” is whichever is the lower of the following amounts—
(a)£3,000, and
(b)3% of the amount that is the maximum value of the settled property during the period in question.
(7B)For those purposes the annual limit applies in relation to each period of 12 months that begins on 6 April.
(7C)The Treasury may by order made by statutory instrument—
(a)specify circumstances in which subsection (7)(za) is, or is not, to apply in relation to a trust, and
(b)amend the definition of “the annual limit” in subsection (7A).
(7D)An order under subsection (7C) may—
(a)make different provision for different cases, and
(b)contain transitional and saving provision.
(7E)A statutory instrument containing an order under subsection (7C) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.”