TSEM1564 - Introduction to trusts: types of trust: interest in possession trust
There is no statutory definition of 鈥榠nterest in possession鈥�.
A Board鈥檚 Press Notice dated 12 February 1976 indicates that an interest in possession 鈥榚xists鈥� where the person having the interest has the immediate entitlement (subject to any prior claims by the trustees for expenses or other outgoings properly payable out of income) to any income produced鈥s the income arises鈥�.鈥�
See CG36320 for a more detailed explanation.聽
Sometimes we refer to interest in possession trusts as 鈥榥on-discretionary鈥� trusts. The interest in possession beneficiary is sometimes referred to as having a 鈥榣ife interest鈥� or being the 鈥榣ife tenant鈥�. See also TSEM6203.
The interest in possession beneficiary is taxable on the trust income after allowable trust management expenses. See TSEM3760+.