[1] It is one of a number of highly technical common law rules which causes considerable angst where wills and trusts have not been professionally prepared.

Under the rule in Howe v Earl of Dartmouth there may be duty to convert and reinvest authorised investments in the trust fund to maintain fairness between the life tenant and the remainderman.

The trustees should convert all such parts of the residuary fund which are wasting, or which are future or reversionary in nature[4] or consist of unauthorised securities[5] into a property of a permanent or income bearing character.

The law assumes that wasting, hazardous or unauthorised investments produce income which exceeds what a life tenant ought reasonably to receive, and that it does so at the expense of the security of the capital.

Accordingly, the apportionment is made that: but, subject to the proviso that: The law assumes that future property is of no benefit to the life tenant, and thus must be sold to obtain income producing investments.

per annum ... and accumulating at compound interest at that rate with yearly rests,[12] and deducting income tax at the standard rate, would, with accumulation of interest, have produced, at the respective dates of receipt, the amounts actually received; and that the aggregate of the sums so ascertained ought to be treated as principal and be applied accordingly, and the residue should be treated as income."