Accumulation - Definition - Law Dictionary Home Dictionary Definition accumulation

Definition :

Accumulation, a gathering together, heaping up, or amassing. The dominion over property, and its rents, issues, and profits, is restrained by our law as regards perpetuity and accumulation. See PERPETUITY.

The prospective accumulation of income of real or personal estate is restrained by the (English) Law of Property Act, 1925, s. 164, replacing with amendments the (English) Accumulations Act, 1800 (39 & 40 Geo. 3, c. 98); commonly called 'The (English) Thellusson Act,' because the case of Thellusson v. Woodford, 4 Ves 227-343, 1798; and 11 Ves 112-151, 1805 was the occasion of its enactment. The (English) Act of 1925 declares that no person shall by any instrument or otherwise settle or dispose of any property, in such manner that the income thereof shall be accumulated for any longer term than--

(1) The life of the grantor or settlor;

(2) 21 years from the death of the grantor or settlor, or testator;

(3) During the minority of any person who shall be living on en ventre sa mere at the time of the death of the grantor, settlor or testator;

(4) During the minority of any person who, under the limitations of the instrument, directing such accumulations, would for the time being, if of full age, be entitled to the income directed to be accumulated. See re Cattell, (1914) 1 Ch 177.

In every case where any accumulation is directed otherwise than as aforesaid, the direction shall (save as thereinafter mentioned) be void; and the income of the property directed to be accumulated, will, so long as the same is directed to be accumulated contrary to that s. (164), go to the person or persons who would have been entitled thereto if such accumulation had not been directed (s. 1).

The s. (164), however, does not extend to any provision--

(1) For payment of the debts of the grantor, or other persons. See Re Heathcote, (1904) 1 Ch 826; or

(2) For raising portions for any child or remoter issue of the grantor, settlor or testator, or any child or remoter issue of any person taking any interest under the settlement or other disposition or to whom any interest is thereby limited; or

(3) Respecting the produce of timber or wood.

The statute operates as a restraint upon those trusts for accumulation which aim at a duration beyond the statutory limits, simply by causing them to cease and become of no effect immediately upon the appropriate statutory period becoming exceeded, and until that date leaves them as valid as if the Act had not passed.

The period of any minority during which income is accumulated under compulsion of law is not to be taken into account in computing the permissible period. (See, L.P. Act, 1925, s. 165)

S. 166 of the (English) Law of Property Act, 1925 (English), replacing the Accumulations Act, 1892 (55 & 56 Vict. C. 58), restricts accumulations for the purpose of purchase of land only to the period during minority. Only settlements and dispositions made after 27th June, 1892, are affected, and see Re Llanover, (1903) 2 Ch 330, but the special restrictions of this section do not apply if the money is capital money under the (English) Settled Land Act, 1925.