Trustee Act 2000 - Legislation.gov.uk

1 28-11-00 09:40:48ch2900a00aACTA Unit: pagaCH 29, Act 2000 CHAPTER 29 ARRANGEMENT OF SECTIONSPartITheDutyofCareSection1. The duty of Application of duty of General power of Standard investment Restriction or exclusion of this Part Existing Power to acquire freehold and leasehold Restriction or exclusion of this Part Existing ,nomineesandcustodiansAgents11. Power to employ Persons who may act as Linked functions Terms of Asset management: special and custodians16. Power to appoint Power to appoint 09:40:48ch2900a01aACTA Unit: pagaCH 29, Act 2000 Section18. Investment in bearer Persons who may be appointed as nominees or Terms of appointment of nominees and of and liability for agents, nominees and custodians Application of sections 22 and Review of agents, nominees and custodians Liability for agents, nominees and custodians Effect of trustees exceeding their Sole Restriction or exclusion of this Part Existing Trustee s entitlement to payment under trust Remuneration of certain Remuneration of trustees of charitable Trustees Remuneration and expenses of agents, nominees and Power to Personal Pension Authorised unit Common investment schemes for charities Minor and consequential amendments Power to amend other Commencement and Short.

2 Schedule 1 Application of duty of 2 Minor and consequential I The Trustee Investments Act 1961 and the Chari-ties Act II Other Public General III 3 Transitional provisions and 4 I The Trustee Investments Act 1961 and the Chari-ties Act II Other 09:59:03ch2900c00aACT Unit: pag1CH 29, Act 20002000 CHAPTER 29An Act to amend the law relating to trustees and persons having theinvestment powers of trustees; and for connected purposes.[23rd November 2000 ]Beitenactedby the Queen s most Excellent Majesty, by and withthe advice and consent of the Lords Spiritual and Temporal, andCommons, in this present Parliament assembled, and by theauthority of the same, as follows: PartITheDutyofCare1. (1) Whenever the duty under this subsection applies to a Trustee ,The duty of must exercise such care and skill as is reasonable in the circumstances,having regard in particular (a) to any special knowledge or experience that he has or holdshimself out as having, and(b) if he acts as Trustee in the course of a business or profession, toany special knowledge or experience that it is reasonable toexpect of a person acting in the course of that kind of businessor profession.

3 (2) In this Act the duty under subsection (1) is called the duty of care . 1 makes provision about when the duty of care applies toApplication ofduty of (1) Subject to the provisions of this Part, a Trustee may make anyGeneral power of investment that he could make if he were absolutely entitled to theassets of the trust.(2) In this Act the power under subsection (1) is called the generalpower of investment .28-11-00 09:59:03ch2900c01aACT Unit: pag1CH 29, Act 2000 PartII(3) The general power of investment does not permit a Trustee to makeinvestments in land other than in loans secured on land (but see alsosection 8).(4) A person invests in a loan secured on land if he has rights under anycontract under which (a) one person provides another with credit, and(b) the obligation of the borrower to repay is secured on land.

4 (5) Credit includes any cash loan or other financial accommodation.(6) Cash includes money in any (1) In exercising any power of investment, whether arising underStandardinvestmentthis Part or otherwise, a Trustee must have regard to the criteria.(2) A Trustee must from time to time review the investments of the trustand consider whether, having regard to the standard investment criteria,they should be varied.(3) The standard investment criteria, in relation to a trust, are (a) the suitability to the trust of investments of the same kind as anyparticular investment proposed to be made or retained and ofthat particular investment as an investment of that kind, and(b) the need for diversification of investments of the trust, in so faras is appropriate to the circumstances of the (1) Before exercising any power of investment, whether this Part or otherwise, a Trustee must (unless the exception applies)obtain and consider proper advice about the way in which, having regardto the standard investment criteria, the power should be exercised.

5 (2) When reviewing the investments of the trust, a Trustee must (unlessthe exception applies) obtain and consider proper advice about whether,having regard to the standard investment criteria, the investments shouldbe varied.(3) The exception is that a Trustee need not obtain such advice if hereasonably concludes that in all the circumstances it is unnecessary orinappropriate to do so.(4) Proper advice is the advice of a person who is reasonably believedby the Trustee to be qualified to give it by his ability in and practicalexperience of financial and other matters relating to the (1) The general power of investment is Restriction orexclusion of this(a) in addition to powers conferred on trustees otherwise than byPart Act, but(b) subject to any restriction or exclusion imposed by the trustinstrument or by any enactment or any provision of subordinatelegislation.

6 (2) For the purposes of this Act, an enactment or a provision ofsubordinate legislation is not to be regarded as being, or as being part of,a trust 09:59:03ch2900c02aACT Unit: pag1CH 29, Act 2000 PartII(3) In this Act subordinate legislation has the same meaning as in theInterpretation Act c. (1) This Part applies in relation to trusts whether created before orExisting its commencement.(2) No provision relating to the powers of a Trustee contained in a trustinstrument made before 3rd August 1961 is to be treated (for the purposesof section 6(1)(b)) as restricting or excluding the general power ofinvestment.(3) A provision contained in a trust instrument made before thecommencement of this Part which (a) has effect under section 3(2) of the Trustee Investments Act 19611961 c.

7 A power to invest under that Act, or(b) confers power to invest under that Act,is to be treated as conferring the general power of investment on a (1) A Trustee may acquire freehold or leasehold land in the UnitedPower to acquirefreehold andKingdom leasehold land.(a) as an investment,(b) for occupation by a beneficiary, or(c) for any other reason.(2) Freehold or leasehold land means (a) in relation to England and Wales, a legal estate in land,(b) in relation to Scotland (i) the estate or interest of the proprietor of the dominiumutile or, in the case of land not held on feudal tenure, theestate or interest of the owner, or(ii) a tenancy, and(c) in relation to Northern Ireland, a legal estate in land, includingland held under a fee farm grant.(3) For the purpose of exercising his functions as a Trustee , a trusteewho acquires land under this section has all the powers of an absoluteowner in relation to the powers conferred by this Part are Restriction orexclusion of this(a) in addition to powers conferred on trustees otherwise than byPart Part, but(b) subject to any restriction or exclusion imposed by the trustinstrument or by any enactment or any provision of (1) This Part does not apply in relation to Existing trusts.

8 (a) a trust of property which consists of or includes land which(despite section 2 of the Trusts of Land and Appointment of1996 c. Act 1996) is settled land, or28-11-00 09:59:04ch2900c02aACT Unit: pag1CH 29, Act 2000 PartIII1925 c. 24.(b) a trust to which the Universities and College Estates Act 1925applies.(2) Subject to subsection (1), this Part applies in relation to trustswhether created before or after its ,nomineesandcustodiansAgents11. (1) Subject to the provisions of this Part, the trustees of a trustPower to authorise any person to exercise any or all of their delegablefunctions as their agent.(2) In the case of a trust other than a charitable trust, the trustees delegable functions consist of any function other than (a) any function relating to whether or in what way any assets of thetrust should be distributed,(b) any power to decide whether any fees or other payment due tobe made out of the trust funds should be made out of incomeor capital,(c) any power to appoint a person to be a Trustee of the trust, or(d) any power conferred by any other enactment or the trustinstrument which permits the trustees to delegate any of theirfunctions or to appoint a person to act as a nominee orcustodian.

9 (3) In the case of a charitable trust, the trustees delegable functionsare (a) any function consisting of carrying out a decision that thetrustees have taken;(b) any function relating to the investment of assets subject to thetrust (including, in the case of land held as an investment,managing the land and creating or disposing of an interest inthe land);(c) any function relating to the raising of funds for the trustotherwise than by means of profits of a trade which is an integralpart of carrying out the trust s charitable purpose;(d) any other function prescribed by an order made by the Secretaryof State.(4) For the purposes of subsection (3)(c) a trade is an integral part ofcarrying out a trust s charitable purpose if, whether carried on in theUnited Kingdom or elsewhere, the profits are applied solely to thepurposes of the trust and either (a) the trade is exercised in the course of the actual carrying out ofa primary purpose of the trust, or(b) the work in connection with the trade is mainly carried out bybeneficiaries of the trust.

10 (5) The power to make an order under subsection (3)(d) is exercisableby statutory instrument which shall be subject to annulment in pursuanceof a resolution of either House of 09:59:04ch2900c03aACT Unit: pag1CH 29, Act 2000 PartIVPersons who may12. (1) Subject to subsection (2), the persons whom the trustees mayact as section 11 authorise to exercise functions as their agent include oneor more of their number.(2) The trustees may not authorise two (or more) persons to exercisethe same function unless they are to exercise the function jointly.(3) The trustees may not under section 11 authorise a beneficiary toexercise any function as their agent (even if the beneficiary is also atrustee).(4) The trustees may under section 11 authorise a person to exercisefunctions as their agent even though he is also appointed to act as theirnominee or custodian (whether under section 16, 17 or 18 or any otherpower).