I have been asked to make an interest free loan between two discretionary trusts which have similar beneficiaries. The lending trust does not contain an express power to lend to another trust, and I do not think that the power of advancement within the trust deed is broad enough.
I am wondering whether I could use s32 to make the loan. There is clearly an argument that it would be for the benefit of a beneficiary, and we could make a contingent capital appointment to the beneficiary prior to the loan to fulfil that requirement of s32.
I have found a few commentaries suggesting that s32 could be used for this as well as transfers out of the trust, but nothing particularly clear. Does anyone have a view on this please?