A beneficiary's rights depend on two things working together: the nature of the receipt and the nature of the interest. This chapter starts with the distinction between capital and income — why rent, dividends and interest fall on one side while sale proceeds fall on the other — before setting out the main categories of beneficial interest, from absolute to discretionary. It then explains how the trust instrument interacts with the default rules in sections 31 and 32 of the Trustee Act 1925, when an absolutely entitled beneficiary can call for the property, and how trustees handle income during a beneficiary's minority. The chapter closes with vested and contingent interests and what happens if the beneficiary dies early, the balance between life tenant and remainderman under the duty of even-handedness, and the distinctive position of beneficiaries under a discretionary trust.
