Annex GLOSSARY:
Accumulate/accumulation: The conversion of income arising from trust property into capital. It should be distinguished from the administrative retention of income.
	Administrative retention of income: The temporary retention of income, usually as an administrative precaution against unseen future deficiencies.  The retention of income for such purposes does not convert it to capital; it is a separate concept from the accumulation of income.
	Appoint: To exercise a power of appointment.
	Beneficiary: A legal person (that is, an individual or a corporation) who is entitled to the benefit of trust property, that is, entitled to it for his, her or its own benefit, and not merely as a trustee holding it for others.
	Capital: Trust property that constitutes a pool or fund of assets, to which a particular class of beneficiaries under the trust in question may be entitled.  Where there is a trust one class of beneficiaries may be entitled to the capital, and others to the income derived from it. Capital is to be distinguished from the income earned on those assets.  For example, A may settle money on trust to be held first for the benefit of B for life, and then absolutely for the benefit of C. In this situation, B is entitled only to the income earned on the fund (for example, the interest earned by its investment in a bank) during B’s lifetime, while C will be entitled to the money (that is, the capital sum) after B’s death.
	Charitable purposes: A charitable purpose must be for the public benefit and fall within one of the descriptions of purposes provided in section 2 of the Charities Act 2006.
	Charity: see paragraph 39 of the Explanatory Notes.
	Charity Commission for England and Wales: The statutory organisation which acts as the regulator and registrar of charities.
	Class-closing rules: “Gift-saving” devices that allow potential beneficiaries whose interest would vest outside the perpetuity period to be excluded from a class of beneficiaries.  This has the effect of saving the interest of the beneficiaries whose interest vests within the period. Class closing rules exist at common law and under section 4 of the Perpetuities and Accumulations Act 1964.
	Codicil: An addition or supplement to an executed will or testament.  It must be executed with all the formalities appropriate to the execution of a will.
	Common law: Rules of law that have been derived from the decisions of the courts rather than enacted in statute by Parliament.
	Condition precedent: A condition which delays the vesting of an interest until the occurrence of a specified event. For example, “to X if he or she graduates from medical school”.  A condition may be in terms of a description rather than an event. A gift “to the first person to land on Mars”, or “to my first great-great-grandchild”, is a gift to whatever person satisfies the stated condition.
	Condition subsequent: A condition which provides for an interest to come to an end on the occurrence or non-occurrence of a specified event. For example, a gift of money could be made to B “provided B does not qualify as a doctor”.  If B does qualify as a doctor, B’s right to the money will come to an end.
	Determinable interest in property: An interest that is to come to an end on the happening of a specified event. A determinable estate, such as a determinable fee simple, carries a similar meaning in relation to land. For example, a gift of a sum of money “to A until A’s house is no longer used as an orphanage”. Whilst this type of limitation is very similar to a condition subsequent there is a subtle difference in the construction of the condition that has legal consequences.  If a gift is worded in a way that suggests the event will happen, rather than might happen, a determinable interest is created—the end is determinate.  When the condition is fulfilled, the interest comes to an end.
	Easement: A right of one landowner over another’s land.  For example, the owner of Blackacre grants a right to the owner of Whiteacre to walk along a path through Blackacre.
	Estate: An entitlement to land for a particular time period, which may be fixed (a lease), uncertain (for example, a life estate) or infinite (a fee simple). Under the Law of Property Act 1925, many estates in land (such as life estates or estates subject to conditions precedent) can now exist only in the context of trusts. The exceptions are the fee simple absolute in possession (freehold) and the term of years absolute (leasehold).
	Instrument: A formal legal document.
	Income: Assets that represent the earnings on property held on trust, to which a particular class of beneficiaries under the trust in question may be entitled. Income may be contrasted with capital and capital gains.
	Life in being: A human being who is alive at the date of a disposition. A child who has been conceived but has not yet been born also qualifies as a life in being provided that the child is in fact born alive. The perpetuity period is the length of a life or lives in being, plus 21 years. A life in being means a life in being at the time of the disposition. Lives in being may be expressly specified in the instrument by which the disposition is made (for example, by using a royal lives clause like “the lineal descendants of Queen Victoria living at the time of my death”). If no lives are specified, the lives in being will be the persons whose lives are connected with the date of vesting of the disposition. So, for example, in a gift to “the first of A’s great-great-grandchildren to play chess with B”, where no such great-great-grandchildren have been born at the time of the gift, B’s is the measuring life – the life in being.
	Non-charitable purpose trust: A trust for purposes (and so not made in favour of an ascertainable group of beneficiaries) where the purposes are not charitable purposes. Very few such trusts are valid.  Their duration must be confined to a period equivalent to the common law perpetuity period. An example of such a trust is a trust for the upkeep of tombs.
	Perpetuity period: The time period within which an interest in property must vest, or be capable of vesting, in order to avoid being void for remoteness.
	Power: In the context of the Act, an authority to act in relation to another’s property.  A power may be administrative or dispositive.  An administrative power is a power, the exercise of which does not affect the beneficial interest arising under a trust, such as a power to sell or lease property. A dispositive power is a power, the exercise of which does affect the beneficial interests arising under a trust, for instance, a power of advancement or a power of appointment.
	Power of advancement: A power given to trustees to apply capital for the benefit of a beneficiary under the trust who is not yet entitled to the capital.  For instance, where capital is held on trust for A on reaching the age of 30, part of that capital might be paid to A at the age of 21 in order to pay for university fees.
	Power of appointment: A power to create or transfer an interest in property. The extent of the power will depend on the terms of the instrument granting it. Under the Act general and special powers of appointment are defined in sections 11 and 20.
	Resulting trust: A trust where the settlor of the trust property is also the beneficiary, which may arise automatically (i.e. by operation of law) in some circumstances.  For example, A grants property to trustees to be held on trust for B subject to a condition subsequent.  If the condition is broken, the trustees will hold the property on trust for A.
	Right of re-entry: A right entitling a person to reclaim possession of land granted to another.  For example, if X gave a house to Y on the condition that Y never marry, X has a right of re-entry which will become exercisable if Y marries.
	Right of reverter: The possibility of the original owner of an estate in land becoming entitled to possession of the land if a determinable interest in the same land comes to an end.  For example, if A grants land to B until B re-marries, A has a right of reverter.  If B re-marries, the land reverts to A.
	Settlor: A person who creates a trust.
	Trust: An arrangement for holding property which imposes equitable obligations on a trustee to deal with property for the benefit of another. In the case of charitable trusts and non-charitable purpose trusts, trustees are obliged to use the property for certain purposes. A trust can be created by deed, by will, by statute, by declaration or by operation of law.
	Vest: An interest designated for a person (for example, in a gift or will) vests at the point when it becomes that person’s property. An interest can be vested in possession, in which case the interest is capable of being presently enjoyed.  An interest can also be vested in interest, in which case the interest is not vested in possession and therefore cannot be presently enjoyed, but will come to be so on the eventual termination of the prior interest or interests in the same property. For example, when property is given to X for life, remainder to Y, X has an interest vested in possession until he dies.  Y’s interest in the property is vested in interest.  When X eventually dies, Y then has an interest vested in possession.