Perpetuities and Accumulations Act 1968

c i e
AT 8 of 1968

PERPETUITIES AND ACCUMULATIONS

ACT 1968

Perpetuities and Accumulations Act 1968 Index


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c i e
PERPETUITIES AND ACCUMULATIONS ACT 1968

Index Section Page

Perpetuities 5

1 Power to specify perpetuity period .............................................................................. 5
1A Abolition of the rule against perpetuities for future dispositions ........................... 5
2 Presumptions and evidence as to future parenthood................................................ 6
3 Right to stop accumulations .......................................................................................... 7
4 Uncertainty as to remoteness ........................................................................................ 7
5 Reduction of age and exclusion of class members to avoid remoteness ................ 9
6 Conditions relating to death of surviving spouse .................................................... 10
7 Saving and acceleration of expectant interest ........................................................... 10
8 Powers of appointment ................................................................................................ 10
9 Administrative powers of trustees ............................................................................. 10
10 Options relating to land ............................................................................................... 11
11 Avoidance of contractual and other rights in cases of remoteness........................ 11
12 Possibilities of reverter, conditions subsequent, exceptions and
reservations .................................................................................................................... 12
Supplemental 12

13 Short title, interpretations and commencement ....................................................... 12
ENDNOTES 15

TABLE OF LEGISLATION HISTORY 15
TABLE OF RENUMBERED PROVISIONS 15
TABLE OF ENDNOTE REFERENCES 15

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c i e
PERPETUITIES AND ACCUMULATIONS ACT 1968

Received Royal Assent: 26 July 1968
Passed: 15 October 1968
Commenced: 15 October 1968
AN ACT
to modify the law of the Isle of Man relating to the avoidance of future
interests in property on grounds of remoteness and governing accumulations of
income from property.
Perpetuities
1 Power to specify perpetuity period

[1964/1]
(1) Subject to subsection (2), section 1A and section 10(2) and (3), where the
instrument by which any disposition made before section 1A comes into
operation 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 that specified in subsection (1A) as is specified in that behalf in
the instrument.1

(1A) The number of years mentioned in subsection (1) is —
(a) 80, in the case of the will of a person dying, or any other
instrument made, before the 1st January 2001;
(b) 150, in any other case.2

(2) Subsection (1) above 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.
1A Abolition of the rule against perpetuities for future dispositions

(1) Section 1 does not apply to —
(a) a disposition made after this section comes into operation; or
Section 2 Perpetuities and Accumulations Act 1968


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(b) a disposition in trust (whenever made), the governing law of
which is changed to the law of the Island in accordance with
section 3 of the Trusts Act 1995 after this section comes into
operation.
(2) The rule against perpetuities is abolished in respect of a disposition
specified in subsection (1).
(3) Subsections (4) and (5) apply in relation to a disposition under subsection
(1)(b).
(4) The application of this section does not operate to validate an interest
disposed of which was invalid immediately before the change of
governing law.
(5) The possibility of the disposition being treated as void at a future date
under the law governing the disposition immediately before the change
of governing law to the law of the Island is to be ignored.
(6) Without limiting the application of section 13(2), in subsection (1)
“disposition” further includes —
(a) a disposition made in exercise of a power of appointment,
whether or not a perpetuity period is specified in the instrument
creating the power; and
(b) a disposition in trust, whether or not—
(i) a previous disposition has been made in relation to the
trust; and
(ii) section 1 applies in relation to the previous disposition.
(7) Nothing in this section precludes the creation of a trust for a specified or
ascertainable period.3

2 Presumptions and evidence as to future parenthood

[1964/2]
(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 —
(a) subject to paragraph (b) below, 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 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 High Court
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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) above, 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.
3 Right to stop accumulations

[1964/14]
Section 2 above shall apply to any question as to the right of beneficiaries to put
an end to accumulations of income under any disposition as it applies to
questions arising on the rule against perpetuities.
4 Uncertainty as to remoteness

[1964/3]
(1) Where, apart from the provisions of this section and sections 5 and 6 of
this Act, 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.
(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
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perpetuity period as if it were not subject to the rule against perpetuities
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 1 or 10 (2) of this
Act, it shall be determined as follows: —
(a) where any persons falling within subsection (5) below 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 impracticable to
ascertain the date of death of the survivor;
(b) where there are no lives under paragraph (a) above 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 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 conferred;
(c) a person having a child or grandchild within sub-paragraphs (i) to
(iv) of paragraph (b) above, 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.
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5 Reduction of age and exclusion of class members to avoid remoteness

[1964/4]
(1) Where a disposition is limited by reference to the attainment by any
person or persons of a specified age exceeding twenty-one 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 twenty-
one 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 twenty-one
years are specified in relation to different persons —
(a) the reference in paragraph (b) of subsection (1) above 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.
(3) Where the inclusion of any person, 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) above 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
section 4 above 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.
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6 Conditions relating to death of surviving spouse

[1964/5]
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 or civil partner 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.4

7 Saving and acceleration of expectant interest

[1964/6]
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.
8 Powers of appointment

[1964/7]
For the purposes of the rule against perpetuities, a power of appointment shall
be treated as a special power unless —
(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.
9 Administrative powers of trustees

[1964/8]
(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.
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(2) Subsection (1) above shall apply for the purposes 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.
10 Options relating to land

[1964/9]
(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) Subject to subsection (3) 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 under the rule against perpetuities shall be
twenty-one years, and section 1 of this Act shall not apply:
Provided that this subsection shall not apply to a right of pre-emption
conferred on a public or local 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 purposes.5

(3) In relation to a disposition referred to in subsection (2) which is made
after section 1A comes into operation —
(a) subsection (2) does not apply; and
(b) the rule against perpetuities is abolished.6

11 Avoidance of contractual and other rights in cases of remoteness

[1964/10]
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.
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12 Possibilities of reverter, conditions subsequent, exceptions and

reservations

[1964/12]
(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
disposition of any rights arising by virtue of the provision, condition
subsequent, exception or reservation.
Supplemental
13 Short title, interpretations and commencement

[1964/15]
(1) This Act may be cited as the Perpetuities and Accumulations Act, 1968.
(2) In this Act —
“disposition
” includes the conferring of a power or 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;
“the rule against perpetuities
” includes —
(a) the application or effect of that rule in respect of accumulations;
and
(b) the rule of law prohibiting trusts of excessive duration;7

“will
” includes a codicil;
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and for the purposes of this Act a disposition contained in a will shall be
deemed to be made at the death of the testator.
(3) 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.
(4) 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.
(5) The foregoing sections of this Act shall apply (except as provided in
section 9(2) above) 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 appointment shall apply only where the
instrument creating the power takes effect after that commencement:
Provided that section 8 above shall apply in all cases for construing the
foregoing reference to a special power of appointment.
(6) 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.
(7) This Act binds the Crown.
(8) This Act shall come into operation when the Royal Assent thereto has
been by the Governor announced to Tynwald and a certificate thereof
has been signed by the Governor and the Speaker of the House of Keys.
Perpetuities and Accumulations Act 1968 Endnotes


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ENDNOTES

Table of Legislation History

Legislation Year and No Commencement






Table of Renumbered Provisions

Original Current






Table of Endnote References

1
Subs (1) amended by Trustee Act 2001 s 38 and by Trusts (Amendment) Act 2015 s 5. 2
Subs (1A) inserted by Trustee Act 2001 s 38. 3
S 1A inserted by Trusts (Amendment) Act 2015 s 5. 4
S 6 amended by Civil Partnership Act 2011 Sch 14. 5
Subs (2) amended by Trusts (Amendment) Act 2015 s 5. 6
Subs (3) inserted by Trusts (Amendment) Act 2015 s 5. 7
Definition of “the rule against perpetuities” inserted by Trusts (Amendment) Act 2015
s 5.