Where a beneficiary is absolutely entitled (see I5.1017) to income arising under a settlement, it forms part of his taxable income for the year in which it arises whether or not it is paid to him or accumulated.
There will be a vested interest if the trustees, under a discretion, mandate to a beneficiary the income from specified assets held by the settlement1. 'Vested' means that the interest either already is or will eventually come into the hands of the beneficiary2. The future event must be certain to happen, even if it is impossible to say when this will be, for example the death of another person. If a trust provides for a beneficiary to lose a vested interest if an event occurs, the
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