Trust in the mix

A mixed trust is, as its name suggests, a mixture of more than one type of trust. For example, if a trust is set up to support two children of different ages, it may start out as an accumulation and maintenance trust, but when one child reaches 18, the part benefiting that child will need to convert to an interest in possession trust. The other part would remain an accumulation and maintenance trust until the second child reaches 18. The trust is therefore ‘mixed’. The income for each part of the trust will be taxed under the rules for that type of trust. The trustees, but not the beneficiaries, will be liable for capital gains tax on gains over the annual trust exempt amount.

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