Trustee Investments Act 1961
Trustee Investments Act, 1961.
(9 & 10 Eliz. 2) CHAPTER 62
An Act to make fresh provision with respect to investment by trustees and persons having the investment powers of trustees, and by local authorities, and for purposes connected therewith.
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
1 New powers of investment of trustees.
(1) A trustee may invest any property in his hands, whether at the time in a state of investment or not, in any manner specified in Part I or II of the First Schedule to this Act or, subject to the next following section, in any manner specified in Part III of that Schedule, and may also from time to time vary any such investments.
(2) The supplemental provisions contained in Part IV of that Schedule shall have effect for the interpretation and for restricting the operation of the said Parts I to III.
(3) No provision relating to the powers of the trustee contained in any instrument (not being an enactment or an instrument made under an enactment) made before the passing of this Act shall limit the powers conferred by this section, but those powers are exerciseable only in so far as a contrary intention is not expressed in any Act or instrument made under an enactment, whenever passed or made, and so relating or in any other instrument so relating which is made after the passing of this Act.
For the purposes of this subsection any rule of the law of Scotland whereby a testamentary writing may be deemed to be made on a date other than that on which it was actually executed shall be disregarded.
(4) In this Act ‘narrower-range investment’ means an investment falling within Part I or II of the First Schedule to this Act and ‘wider-range investment’ means an investment falling within Part III of that Schedule.
2 Restrictions on wider-range investment.
(1) A trustee shall not have power by virtue of the foregoing section to make or retain any wider-range investment unless the trust fund has been divided into two parts (hereinafter referred to as the narrower-range part and the wider-range part), the parts being, subject to the provisions of this Act, equal in value at the time of the division; and where such a division has been made no subsequent division of the same fund shall be made for the purposes of this section, and no property shall be transferred from one part of the fund to the other unless either—
(a ) the transfer is authorised or required by the following provisions of this Act, or
(b ) a compensating transfer is made at the same time.
In this section ‘compensating transfer’, in relation to any transferred property, means a transfer in the opposite direction of property of equal value.
(2) Property belonging to the narrower-range part of a trust fund shall not by virtue of the foregoing section be invested except in narrower-range investments, and any property invested in any other manner which is or becomes comprised in that part of the trust fund shall either be transferred to the wider-range part of the fund, with a compensating transfer, or be reinvested in narrower-range investments as soon as may be.
(3) Where any property accrues to a trust fund after the fund has been divided in pursuance of subsection (1) of this section, then—
(a ) if the property accrues to the trustee as owner or former owner of property comprised in either part of the fund, it shall be treated as belonging to that part of the fund;
(b ) in any other case, the trustee shall secure, by apportionment of the accruing property or the transfer of property from one part of the fund to the other, or both, that the value of each part of the fund is increased by the same amount.
Where a trustee acquires property in consideration of a money payment the acquisition of the property shall be treated for the purposes of this section as investment and not as the accrual of property to the trust fund, notwithstanding that the amount of the consideration is less than the value of the property acquired; and paragraph (a ) of this subsection shall not include the case of a dividend or interest becoming part of a trust fund.
(4) Where in the exercise of any power or duty of a trustee property falls to be taken out of the trust fund, nothing in this section shall restrict his discretion as to the choice of property to be taken out.
3 Relationship between Act and other powers of investment.
(1) The powers conferred by section one of this Act are in addition to and not in derogation from any power conferred otherwise than by this Act of investment or postponing conversion exerciseable by a trustee (hereinafter referred to as a ‘special power’).
(2) Any special power (however expressed) to invest property in any investment for the time being authorised by law for the investment of trust property, being a power conferred on a trustee before the passing of this Act or conferred on him under any enactment passed before the passing of this Act, shall have effect as a power to invest property in like manner and subject to the like provisions as under the foregoing provisions of this Act.
(3) In relation to property, including wider-range but not including narrower-range investments,—
(a ) which a trustee is authorised to hold apart from—
(i) the provisions of section one of this Act or any of the provisions of Part I of the Trustee Act, 1925, or any of the provisions of the Trusts (Scotland) Act, 1921, or
(ii) any such power to invest in authorised investments as is mentioned in the foregoing subsection, or
(b ) which became part of a trust fund in consequence of the exercise by the trustee, as owner of property falling within this subsection, of any power conferred by subsection (3) or (4) of section ten of the Trustee Act, 1925, or paragraph (o ) or (p ) of subsection (1) of section four of the Trusts (Scotland) Act, 1921,
the foregoing section shall have effect subject to the modifications set out in the Second Schedule to this Act.
(4) The foregoing subsection shall not apply where the powers of the trustee to invest or postpone conversion have been conferred or varied—
(a ) by an order of any court made within the period of ten years ending with the passing of this Act, or
(b ) by any enactment passed, or instrument having effect under an enactment made, within that period, being an enactment or instrument relating specifically to the trusts in question; or
(c ) by an enactment contained in a local Act of the present Session;
but the provisions of the Third Schedule to this Act shall have effect in a case falling within this subsection.
4 Interpretation of references to trust property and trust funds.
(1) In this Act ‘property’ includes real or personal property of any description, including money and things in action:
Provided that it does not include an interest in expectancy, but the falling into possession of such an interest, or the receipt of proceeds of the sale thereof, shall be treated for the purposes of this Act as an accrual of property to the trust fund.
(2) So much of the property in the hands of a trustee shall for the purposes of this Act constitute one trust fund as is held on trusts which (as respects the beneficiaries or their respective interests or the purposes of the trust or as respects the powers of the trustee) are not identical with those on which any other property in his hands is held.
(3) Where property is taken out of a trust fund by way of appropriation so as to form a separate fund, and at the time of the appropriation the trust fund had (as to the whole or a part thereof) been divided in pursuance of subsection (1) of section two of this...
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