General
77.Section 46 of the Act, which implements recommendation 70(1) as amended, defines a private purpose trust (which the SLC concluded can already be competently established under Scots law, see paragraph 14.3 of the Report on Trust Law). Such a trust contrasts with a “beneficiary trust”, which is a trust exclusively for the benefit of identified or identifiable beneficiaries. A private purpose trust, on the other hand, exists for the furtherance of a specific purpose which is neither charitable or public nor solely for the benefit of a specified or named beneficiary (or potential beneficiary)(16) (by subsection (1)). An example might be a trust set up by commercial developers to cover potential future environmental costs associated with the development. Such trusts are arguably already recognised under Scots law.
78.Subsection (2) clarifies that a private purpose trust may also have beneficiaries; thus an entrepreneur might transfer the shares in the entrepreneur’s company to trustees to hold, and to use to promote the interests of the company, for the ultimate benefit of the employees, or for future generations of the truster’s family. But in those circumstances the trust is not set up solely for those beneficiaries or potential beneficiaries.
The singular including the plural here by virtue of the Interpretation and Legislative Reform (Scotland) Act 2010.
