Perpetuities And Accumulations Act, 1986 (Gibraltar)

Perpetuities And Accumulations Act, 1986

Published: 1986-04-03

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Unlimited Searches
Weekly Updates on New Laws
Access to 5,345,848 Global Laws from 110 Countries
View the Original Law Side-by-Side with the Translation

Subscribe Now for only USD$40 per month.

Perpetuities and Accumulations

1986-06

PERPETUITIES AND ACCUMULATIONS

ACT, 1986

Principal Act

Act. No. 1986-06 Commencement 3.4.1986

Assent 3.4.1986

Amending

enactments

Relevant current

provisions

Commencement

date

Act. 2014-29 ss. 4(1), (3), (4), 16 & 17 23.10.2014

English sources

Perpetuities and Accumulations Act 1964. (1964 c.55).

Perpetuities and Accumulations

1986-06

ARRANGEMENT OF SECTIONS

Sections.

1. Short title.

2. Interpretation.

3. Application to Crown.

4. Power to specify perpetuity period.

5. Presumption: and evidence as to future parenthood.

6. Uncertainty as to remoteness.

7. Reduction of age and exclusion of class members to avoid

remoteness.

8. Condition relating to death of surviving spouse.

9. Saving and acceleration of expectant interests.

10. Power of appointment.

11. Administrative powers of trustees.

12. Options relating to land.

13. Avoidance of contractural and other rights in cases of remoteness.

14. Rights of enforcement of rent charges.

15. Possibilities of reverter, conditions subsequent, exceptions and

reservations.

16. Restrictions on accumulations for charitable trusts.

17. Omitted.

18. Repeal.

Perpetuities and Accumulations

1986-06

AN ACT TO MODIFY THE LAW OF GIBRALTAR RELATING TO THE

AVOIDANCE OF FUTURE INTERESTS IN PROPERTY ON GROUNDS

OF REMOTENESS AND GOVERNING ACCUMULATIONS FROM

PROPERTY.

Short title.

1. This Act may be cited as the Perpetuities and Accumulations Act, 1986.

Interpretation. (s.15).

2.(1) In this Act-

“disposition” includes the conferring of a power of appointment and any

other disposition of an interest in or right over property, and

references to the interest disposed of shall be construed

accordingly;

“in being” means living or en ventre sa mere;

“power of appointment” includes any discretionary power to transfer a

beneficial interest in property without the furnishing of valuable

consideration;

“will” includes a codicil;

and of the purposes of this Act a disposition contained in a will shall be

deemed to be made at the death of the testator.

(2) For the purposes of this Act a person shall be treated as a member of

a class if in his case all the conditions identifying a member of the class are

satisfied, and shall be treated as a potential member if in his case some only

of those conditions are satisfied but there is a possibility that the remainder

will in time be satisfied.

(3) Nothing in this Act shall affect the operation of the rule of law

rendering void for remoteness certain dispositions under which property is

limited to be applied for purposes other than the benefit of any person or

class of persons in cases where the property may be so applied after the end

of the perpetuity period.

(4) This Act shall (except as provided in section 11(2)) apply only in

relation to instruments taking effect after the commencement of this Act,

and in the case of an instrument made in the exercise of a special power of

(1964 c. 55 s.15).

Perpetuities and Accumulations

1986-06

appointment shall apply only where the instrument creating the power takes

effect after that commencement:

Provided that section 10 shall apply in all cases for construing any

reference to a special power of appointment.

(5) This Act shall apply in relation to a disposition made otherwise than

by an instrument as if the disposition had been contained in an instrument

taking effect when the disposition was made.

Application to Crown.

3. This Act binds the Crown.

PERPETUITIES.

Power to specify perpetuity period.

4.(1) Subject to section 12(2) and to subsection (2), where the instrument by

which any disposition is made so provides, the perpetuity period applicable

to the disposition under the rule against perpetuities, instead of being of any

other duration, shall be of a duration equal to such number of years not

exceeding two hundred and fifty as is specified in that behalf in the

instrument.

(2) Subsection (1) shall not have effect where the disposition is made in

exercise of a special power of appointment, but where a period is specified

under that subsection in the instrument creating such a power the period

shall apply in relation to any disposition under the power as it applies in

relation to the power itself.

(3) Subsection (1) shall also apply to dispositions made prior to the

coming into force of the Perpetuities and Accumulations (Amendment)

Act 2014.

(4) An increase in the duration of the perpetuity period to more than one

hundred years of a disposition referred to subsection (3) shall be effected

by a deed executed by the trustees (or as may be otherwise authorised by

the instrument creating the disposition) and citing that subsection.

Presumption: and evidence as to future parenthood.

5.(1) Where in any proceedings there arises on the rule against perpetuities a

question which turns on the ability of a person to have a child at some future

time, then–

(1964 c. 55

s.15(7)).

(s.1).

(s.2).

Perpetuities and Accumulations

1986-06

(a) subject to paragraph (b), it shall be presumed that a male can

have a child at the age of fourteen years or over, but not under

that age, and that a female can have a child at the age of twelve

years or over, but not under that age or over the age of fifty-five

years; but

(b) in the case of a living person evidence may be given to show

that he or she will or will not be able to have a child at the time

in question.

(2) Where any such question is decided by treating a person as unable to

have a child at a particular time, and he or she does so, the Supreme Court

may make such order as it thinks fit for placing the persons interested in the

property comprised in the disposition, so far as may be just, in the position

they would have held if the question had not been so decided.

(3) Subject to subsection (2), where any such question is decided in

relation to a disposition by treating a person as able or unable to have a child

at a particular time, then he or she shall be so treated for the purpose of any

question which may arise on the rule against perpetuities in relation to the

same disposition in any subsequent proceedings.

(4) In the foregoing provisions of this section references to having a child

are references to begetting or giving birth to a child, but those provisions

(except subsection (1)(b)) shall apply in relation to the possibility that a

person will at any time have a child by adoption, legitimation or other means

as they apply to his or her ability at that time to beget or give birth to a child.

Uncertainty as to remoteness.

6.(1) Where, apart from the provisions of this section and of sections 7

and 8, a disposition would be void on the ground that the interest disposed

of might not become vested until too remote a time, the disposition shall be

treated, until such time (if any) as it becomes established that the vesting

must occur, if at all, after the end of the perpetuity period, as if the

disposition were not subject to the rule against perpetuities; and its

becoming so established shall not affect the validity of anything previously

done in relation to the interest disposed of by way of advancement,

application of intermediate income or otherwise.

(2) Where, apart from the said provisions, a disposition consisting of the

conferring of a general power of appointment would be void on the ground

that the power might not become exercisable until too remote a time, the

disposition shall be treated, until such time (if any) as it becomes established

that the power will not be exercisable within the perpetuity period, as if the

disposition were not subject to the rule against perpetuities.

(s.3).

Perpetuities and Accumulations

1986-06

(3) Where, apart from the said provisions, a disposition consisting of the

conferring of any power, option or other right would be void on the ground

that the right might be exercised at too remote a time, the disposition shall

be treated as regards any exercise of the right within the perpetuity period as

if it were not subject to the rule against perpetuity and, subject to the said

provisions, shall be treated as void for remoteness only if, and so far as, the

right is not fully exercised within that period.

(4) Where this section applies to a disposition and the duration of the

perpetuity period is not determined by virtue of section 4 or 12(2) it shall be

determined as follows:-

(a) where any persons falling within subsection (5) are individuals

in being and ascertainable at the commencement of the

perpetuity period the duration of the period shall be determined

by reference to their lives and no others, but so that the lives of

any description of persons falling within paragraph (b) or (c) of

that subsection shall be disregarded if the number of persons of

that description is such as to render it impraticable to ascertain

the date of death of the survivor;

(b) where there are no lives under paragraph (a) the period shall be

twenty one years.

(5) The said persons are as follows:-

(a) the person by whom the disposition was made;

(b) a person to whom or in whose favour the disposition was made,

that is to say-

(i) in the case of a disposition to a class of persons, any

member or potential member of the class;

(ii) in the case of an individual disposition to a person taking

only on certain conditions being satisfied, any person as

to whom some of the conditions are satisfied and the

remainder may in time be satisfied;

(iii) in the case of a special power of appointment exercisable

in favour of members of a class, any member or potential

member of the class;

(iv) in the case of a special power of appointment exercisable

in favour of one person only, that person or, where the

object of the power is ascertainable only on certain

conditions being satisfied, any person as to whom some

Perpetuities and Accumulations

1986-06

of the conditions are satisfied and the remainder may in

time be satisfied;

(v) in the case of any power, option or other right, the person

on whom the right is confirmed;

to (iv) of paragraph (b), or any of whose children or

grandchildren, if subsequently born, would by virtue of his or

her descent fall within those sub-paragraphs;

(d) any person on the failure or determination of whose prior

interest the disposition is limited to take effect.

(6) This section shall be deemed to have come into operation on the date

on which the Companies (Taxation and Concessions) Act * came into

operation, that is to say, the 10th day of March 1967.

Reduction of age and exclusion of class members to avoid remoteness.

7.(1) Where a disposition is limited by reference to the attainment by any

person or persons of a specified age exceeding eighteen years, and it is

apparent at the time the disposition is made or becomes apparent at a

subsequent time-

(a) that the disposition would, apart from this section, be void for

remoteness, but

(b) that it would not be so void if the specified age had been

eighteen years,

the disposition shall be treated for all purposes as if, instead of being limited

by reference to the age in fact specified, it had been limited by reference to

the age nearest to that age which would, if specified instead, have prevented

the disposition from being so void.

(2) Where in the case of any disposition different ages exceeding eighteen

years are specified in relation to different persons-

(a) the reference in paragraph (b) of subsection (1) to the specified

age shall be construed as a reference to all the specified ages,

and

(b) that subsection shall operate to reduce each such age so far as is

necessary to save the disposition from being void for

remoteness.

* 1967-02

(s.4).

Perpetuities and Accumulations

1986-06

(3) Where the inclusion of any persons, being potential members of a class

or unborn persons who at birth would become members or potential

members of the class, prevents the foregoing provisions of this section from

operating to save a disposition from being void for remoteness, those

persons shall thenceforth be deemed for all the purposes of the disposition to

be excluded from the class, and the said provisions shall thereupon have

effect accordingly.

(4) Where, in the case of a disposition to which subsection (3) does not

apply, it is apparent at the time the disposition is made or becomes apparent

at a subsequent time that, apart from this subsection, the inclusion of any

persons, being potential members of a class or unborn persons who at birth

would become members or potential members of the class, would cause the

disposition to be treated as void for remoteness, those persons shall, unless

their exclusion would exhaust the class, thenceforth be deemed for all the

purposes of the disposition to be excluded from the class.

(5) Where this section has effect in relation to a disposition to which 6

applies, the operation of this section shall not affect the validity of anything

previously done in relation to the interest disposed of by way of

advancement, application of intermediate income or otherwise.

Condition relating to death of surviving spouse.

8. Where a disposition is limited by reference to the time of death of the

survivor of a person in being at the commencement of the perpetuity period

and any spouse of that person, and that time has not arrived at the end of the

perpetuity period, the disposition shall be treated for all purposes, where to

do so would save it from being void for remoteness, as if it had instead been

limited by reference to the time immediately before the end of that period.

Saving and acceleration of expectant interests.

9. A disposition shall not be treated as void for remoteness by reason only

that the interest disposed of is ulterior to and dependent upon an interest

under a disposition which is so void, and the vesting of an interest shall not

be prevented from being accelerated on the failure of a prior interest by

reason only that the failure arises because of remoteness.

Power of appointment.

10. For the purposes of the rule against perpetuities, a power of appointment

shall be treated as a special power unless-

(s.5).

(s.6).

Perpetuities and Accumulations

1986-06

(a) in the instrument creating the power it is expressed to be

exercisable by one person only, and

(b) it could, at all times during its currency when that person is of

full age and capacity, be exercised by him so as immediately to

transfer to himself the whole of the interest governed by the

power without the consent of any other person or compliance

with any other condition, not being a formal condition relating

only to the mode of exercise of the power:

Provided that for the purpose of determining whether a disposition made

under a power of appointment exercisable by will only is void for

remoteness, the power shall be treated as a general power where it would

have fallen to be so treated if exercisable by deed.

Administrative powers of trustees.

11.(1) The rule against perpetuities shall not operate to invalidate a power

conferred on trustees or other persons to sell, lease, exchange or otherwise

dispose of any property for full consideration, or to do any other act in the

administration (as opposed to the distribution) of any property, and shall not

prevent the payment to trustees or other persons of reasonable remuneration

for their services.

(2) Subsection (1) shall apply for the purpose of enabling a power to be

exercised at any time after the commencement of this Act notwithstanding

that the power is conferred by an instrument which took effect before that

commencement.

Options relating to land.

12.(1) The rule against perpetuities shall not apply to a disposition

consisting of the conferring of an option to acquire for valuable

consideration an interest reversionary (whether directly or indirectly) on the

term of a lease if-

(a) the option is exercisable only by the lessee or his successors in

title, and

(b) it ceases to be exercisable at or before the expiration of one

year following the determination of the lease.

This subsection shall apply in relation to an agreement for a lease as it

applies in relation to a lease, and "lessee" shall be construed accordingly.

(2) In the case of a disposition consisting of the conferring of an option to

acquire for valuable consideration any interest in land, the perpetuity period

(s.8).

(s.9).

Perpetuities and Accumulations

1986-06

under the rule against perpetuities shall be twenty-one years, and section 4

shall not apply:

Provided that this subsection shall not apply to a right of preemption

conferred on a public authority in respect of land used or to be used for

religious purposes where the right becomes exercisable only if the land

ceases to be used for such purpose.

Avoidance of contractural and other rights in cases of remoteness.

13. Where a disposition inter vivos would fall to be treated as void for

remoteness if the rights and duties thereunder were capable of transmission

to persons other than the original parties and had been so transmitted, it shall

be treated as void as between the person by whom it was made and the

person to whom or in whose favour it was made or any successor of his, and

no remedy shall lie in contract or otherwise for giving effect to it or making

restitution for its lack of effect.

Rights of enforcement of rent charges.

14. The rule against perpetuities shall not apply to any powers or remedies

for recovering or compelling the payment of an annual sum to which section

44 of the Conveyancing and Law of Property Act 1881 applies or otherwise

becoming exercisable or enforceable on the breach of any condition or other

requirement relating to that sum.

Possibilities of reverter, conditions subsequent, exceptions and

reservations.

15.(1) In the case of-

(a) a possibility of reverter on the determination of a determinable

fee simple, or

(b) a possibility of a resulting trust on the determination of any

other determinable interest in property,

the rule against perpetuities shall apply in relation to the provision causing

the interest to be determinable as it would apply if that provision were

expressed in the form of a condition subsequent giving rise, on breach

thereof, to a right of re-entry or an equivalent right in the case of property

other than land, and where the provision falls to be treated as void for

remoteness the determinable interest shall become an absolute interest,

(2) Where a disposition is subject to any such provision or to any such

condition subsequent, or to any exception or reservation, the disposition

shall be treated for the purposes of this Act as including a separate

(s.10).

(s.11).

(s.12).

Perpetuities and Accumulations

1986-06

disposition of any rights arising by virtue of the provision, condition

subsequent, exception or reservation.

ACCUMULATIONS

Restrictions on accumulations for charitable trusts.

16.(1) This section applies to an instrument to the extent that it provides for

property to be held on trust for charitable purposes, but does not apply

where the provision is made by a court or by the Board of Charity

Commissioners.

(2) If the instrument imposes or confers on the trustees a duty or power

to accumulate income, and apart from this section the duty or power would

last beyond the end of the statutory period, it ceases to have effect at the end

of that period unless subsection (4) applies.

(3) The statutory period is a period of 21 years starting with the first day

when the income must or may be accumulated (as the case may be).

(4) This subsection applies if the instrument provides for the duty or

power to cease to have effect–

(a) on the death of the settlor, or

(b) on the death of one of the settlors, determined by name or by

the order of their deaths.

(5) If a duty or power ceases to have effect under this section the income

to which the duty or power would have applied apart from this section

must–

(a) go to the person who would have been entitled to it if there had

been no duty or power to accumulate, or

(b) be applied for the purposes for which it would have had to be

applied if there had been no such duty or power.

(6) This section applies whether or not the duty or power to accumulate

extends to income produced by the investment of income previously

accumulated.

17. Omitted.

Repeal.

18. Section 42 of the Land Law and Conveyancing Act is repealed.

Perpetuities and Accumulations

1986-06