Trust question

Imagine this scenario:

Trusts A and B are both (hybrid) trusts holding combinations of investments which sometimes generate a profit and sometimes a loss. Trust C is simply a discresionary trust. Pretend that both A and B are benificiaries of C, and C is also a benificiary of both trust A and B.

If trust A made a profit one year and trust B made a loss, profit from A could be distributed to trust B via trust C and offset against this loss. The reverse would also be true. Any overall profit or loss could be offset by distributing to or from trust C from an external source.

My question: is there a law that prevents this ‘loop’ situation where a trust is both the benificiary of a trust as well as having the same trust as a benificiary of itself?

I don’t want to go into too much details about exactly what sort of investments are held by these trusts or why I want things structured this way, so hopefully the question will make sense as it is. Please don’t respond to this question with “Thats crazy, why would you want to do that?”