Trustee Act 2000
| Year | 2000 |
Trustee Act 2000
2000 Chapter 29
An Act to amend the law relating to trustees and persons having the investment powers of trustees; and for connected purposes.
[23rd November 2000]
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:—
Part I
The Duty of Care
1 The duty of care.
(1) Whenever the duty under this subsection applies to a trustee, he 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 holds himself out as having, and
(b) if he acts as trustee in the course of a business or profession, to any special knowledge or experience that it is reasonable to expect of a person acting in the course of that kind of business or profession.
(2) In this Act the duty under subsection (1) is called ‘the duty of care’.
2 Application of duty of care.
2. Schedule 1 makes provision about when the duty of care applies to a trustee.
Part II
Investment
3 General power of investment.
(1) Subject to the provisions of this Part, a trustee may make any kind of investment that he could make if he were absolutely entitled to the assets of the trust.
(2) In this Act the power under subsection (1) is called ‘the general power of investment’.
(3) The general power of investment does not permit a trustee to make investments in land other than in loans secured on land (but see also section 8).
(4) A person invests in a loan secured on land if he has rights under any contract under which—
(a) one person provides another with credit, and
(b) the obligation of the borrower to repay is secured on land.
(5) ‘Credit’ includes any cash loan or other financial accommodation.
(6) ‘Cash’ includes money in any form.
4 Standard investment criteria.
(1) In exercising any power of investment, whether arising under this Part or otherwise, a trustee must have regard to the standard investment criteria.
(2) A trustee must from time to time review the investments of the trust and 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 any particular investment proposed to be made or retained and of that particular investment as an investment of that kind, and
(b) the need for diversification of investments of the trust, in so far as is appropriate to the circumstances of the trust.
5 Advice.
(1) Before exercising any power of investment, whether arising under this Part or otherwise, a trustee must (unless the exception applies) obtain and consider proper advice about the way in which, having regard to the standard investment criteria, the power should be exercised.
(2) When reviewing the investments of the trust, a trustee must (unless the exception applies) obtain and consider proper advice about whether, having regard to the standard investment criteria, the investments should be varied.
(3) The exception is that a trustee need not obtain such advice if he reasonably concludes that in all the circumstances it is unnecessary or inappropriate to do so.
(4) Proper advice is the advice of a person who is reasonably believed by the trustee to be qualified to give it by his ability in and practical experience of financial and other matters relating to the proposed investment.
6 Restriction or exclusion of this Part etc.
(1) The general power of investment is—
(a) in addition to powers conferred on trustees otherwise than by this Act, but
(b) subject to any restriction or exclusion imposed by the trust instrument or by any enactment or any provision of subordinate legislation.
(2) For the purposes of this Act, an enactment or a provision of subordinate legislation is not to be regarded as being, or as being part of, a trust instrument.
(3) In this Act ‘subordinate legislation’ has the same meaning as in the Interpretation Act 1978 .
7 Existing trusts.
(1) This Part applies in relation to trusts whether created before or after its commencement.
(2) No provision relating to the powers of a trustee contained in a trust instrument made before 3rd August 1961 is to be treated (for the purposes of section 6(1)(b)) as restricting or excluding the general power of investment.
(3) A provision contained in a trust instrument made before the commencement of this Part which—
(a) has effect under section 3(2) of the Trustee Investments Act 1961 as 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 trustee.
Part III
Acquisition of Land
8 Power to acquire freehold and leasehold land.
(1) A trustee may acquire freehold or leasehold land in the United Kingdom—
(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 dominium utile or, in the case of land not held on feudal tenure, the estate or interest of the owner, or
(ii) a tenancy, and
(c) in relation to Northern Ireland, a legal estate in land, including land held under a fee farm grant.
(3) For the purpose of exercising his functions as a trustee, a trustee who acquires land under this section has all the powers of an absolute owner in relation to the land.
9 Restriction or exclusion of this Part etc.
9. The powers conferred by this Part are—
(a) in addition to powers conferred on trustees otherwise than by this Part, but
(b) subject to any restriction or exclusion imposed by the trust instrument or by any enactment or any provision of subordinate legislation.
10 Existing trusts.
(1) This Part does not apply in relation to—
(a) a trust of property which consists of or includes land which (despite section 2 of the Trusts of Land and Appointment of Trustees Act 1996 ) is settled land, or
(b) a trust to which the Universities and College Estates Act 1925 applies.
(2) Subject to subsection (1), this Part applies in relation to trusts whether created before or after its commencement.
Part IV
Agents, nominees and custodians
Agents
11 Power to employ agents.
(1) Subject to the provisions of this Part, the trustees of a trust may authorise any person to exercise any or all of their delegable functions 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 the trust should be distributed,
(b) any power to decide whether any fees or other payment due to be made out of the trust funds should be made out of income or 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 trust instrument which permits the trustees to delegate any of their functions or to appoint a person to act as a nominee or custodian.
(3) In the case of a charitable trust, the trustees' delegable functions are—
(a) any function consisting of carrying out a decision that the trustees have taken;
(b) any function relating to the investment of assets subject to the trust...
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