Hong Kong Ordinances

TRUSTEE ORDINANCE - SECT 33

Power to apply income for maintenance and to accumulate surplus income during a minority

Maintenance, Advancement and Protective Trusts

(1) Where any property is held by trustees in trust for any person for any
interest whatsoever, whether vested or contingent, then, subject to any prior
interests or charges affecting that property-

   (a)  during the infancy of any such person, if his interest so long
        continues, the trustees may, at their sole discretion, pay to his
        parent or guardian, if any, or otherwise apply for or towards his
        maintenance, education or benefit, the whole or such part, if any, of
        the income of that property as may, in all the circumstances, be
        reasonable, whether or not there is-

        (i)    any other fund applicable to the same purpose; or

        (ii)   any person bound by law to provide for his maintenance or
               education; and

   (b)  if such person on attaining full age has not a vested interest in such
        income, the trustees shall thenceforth pay the income of that property
        and of any accretion thereto under subsection (2) to him, until he
        either attains a vested interest therein or dies, or until failure of
        his interest: (Amended 32 of 1990 s. 8) Provided that, in deciding
        whether the whole or any part of the income of the property is during
        a minority to be paid or applied for the purposes aforesaid, the
        trustees shall have regard to the age of the infant and his
        requirements and generally to the circumstances of the case, and in
        particular to what other income, if any, is applicable for the same
        purposes; and where trustees have notice that the income of more than
        one fund is applicable for those purposes, then, so far as
        practicable, unless the entire income of the funds is paid or applied
        as aforesaid or the court otherwise directs, a proportionate part only
        of the income of each fund shall be so paid or applied.

(2) During the infancy of any such person, if his interest so long continues,
the trustees shall accumulate all the residue of that income in the way of
compound interest by investing the same and the resulting income thereof from
time to time in authorized investments, and shall hold those accumulations as
follows-

   (a)  if any such person-

        (i)    attains full age, or marries before attaining full age, and his
               interest in such income during his infancy or until his
               marriage is a vested interest; or

        (ii)   on attaining full age or on marriage before attaining full age
               becomes entitled to the property from which such income arose
               absolutely, the trustees shall hold the accumulations in trust
               for such person absolutely, and so that the receipt of such
               person after marriage, and though still an infant, shall be a
               good discharge; and (Amended 32 of 1990 s. 8)

   (b)  in any other case the trustees shall, notwithstanding that such person
        had a vested interest in such income, hold the accumulations as an
        accretion to the capital of the property from which such accumulations
        arose, and as one fund with such capital for all purposes, but the
        trustees may, at any time during the infancy of such person if his
        interest so long continues, apply those accumulations, or any part
        thereof, as if they were income arising in the then current year.

(3) This section applies in the case of a contingent interest only if the
limitation or trust carries the intermediate income of the property, but it
applies to a future or contingent legacy by the parent of, or a person
standing in loco parentis to, the legatee, if and for such period as, under
the general law, the legacy carries interest for the maintenance of the
legatee, and in any such case as last aforesaid the rate of interest shall (if
the income available is sufficient, and subject to any rules of court to the
contrary) be $5 per cent per annum.

(4) This section applies to a vested annuity in like manner as if the annuity
were the income of property held by trustees in trust to pay the income
thereof to the annuitant for the same period for which the annuity is payable,
save that in any case accumulations made during the infancy of the annuitant
shall be held in trust for the annuitant or his personal representatives
absolutely.

(5) This section does not apply where the instrument, if any, under which the
interest arises came into operation before the commencement of this Ordinance.
[cf. 1925 c. 19 s. 31 U.K.]