Accumulation

Accumulation is a legal term applied to the putting by of interest, or rents, and converting them into capital by investment, of which the income is again capitalised. By the Thellusson Act (q.v.) of 1799, it is forbidden to accumulate income for a longer period than the life of the trustor or settlor, and twenty-one years thereafter. This act applies to movable estate in England and Scotland, and by the Rutherfurd Act, 1848, the prohibition was extended to the rents of land in Scotland. If the direction is given to accumulate for a longer period, the settlement is not void, but is given effect to so far as permitted by law. It is usual in settlements to direct the accumulation of income during the minority of the children after providing for their maintenance. Accumulation is also applied in Scotland to the charging of compound interest. Such accumulation is permitted on bankers' accounts periodically settled; on India accounts by custom; on the cash-accounts of judicial factors and law-agents; and in certain cases of fixed commercial usage. See INTEREST.