CG37641 - Absolute entitlement: mergers of interests: examples

A has a life interest in settled property and B is the remainderman; both are original beneficiaries. N buys A’s life interest and, before it terminates, he also buys the remainder interest from B. N therefore becomes absolutely entitled to the settled property as against the trustees, and there is an `occasion of charge’ on both the trustees and N.

The facts are the same as above, except that the remainderman B, for a consideration in money or money’s worth, acquires the life interest of A. B thereupon becomes absolutely entitled to the settled property as against the trustees, and there is an `occasion of charge’ on the trustees. B, however, is not chargeable under Section 76(2) because, when he became absolutely entitled to the property, he was regarded as still being the original beneficial owner of the remainder.