37.Sections 8 to 10 form Part III of the Act. They create a new power for trustees to acquire and deal with land on behalf of the trust. Part III does not apply to occupational pension schemes, authorised unit trusts and certain schemes under the Charities Act 1993 (see sections 36-38) or to trusts where, before Part III is brought into force, the trustees already have power to invest or apply trust funds by virtue of primary or subordinate legislation (defined in section 6(2)): for example, under the Settled Land Act 1925.
38.At present, although trustees of land and Settled Land Act trustees have power to buy land (with or without the aid of a mortgage in the case of trustees of land) in England and Wales for any reason (not just for investment), trustees of personal property only have power to acquire land if expressly authorised to do so in the trust instrument.
39.The new general power of investment introduced by section 3 of the Act has only limited application to land (see section 3(3)) and is in any event restricted to investment. The Act therefore makes separate provision to remedy the disparity between the powers of different types of trustees in relation to the purchase of land.
40.Section 8(1) gives trustees the power to acquire freehold or leasehold land in the United Kingdom as an investment, for occupation by the beneficiaries or for any other reason. This provision is broadly modelled on section 6(3) and (4) of the Trusts of Land and Appointment of Trustees Act 1996. The express duty to have regard to the interests of the beneficiaries in exercising powers under section 6(5) of the 1996 Act is not replicated in the Act. However that provision merely clarifies what is already the law and the omission of an equivalent provision is not intended to diminish the obligations of trustees.
41.The phrase “freehold or leasehold land” is defined in section 8(2). In England and Wales it means a legal estate in land. The only estates in land which are capable of being legal estates are an estate in fee simple absolute in possession and an estate for a term of years absolute. These estates correspond to freehold and leasehold respectively (Law of Property Act 1925 section 1(1)). Trustees may also acquire the equivalent interests in land in Scotland and Northern Ireland.
42.Having acquired land a trustee must be able to deal with it effectively. Following the precedent of section 6(1) of the Trusts of Land and Appointment of Trustees Act 1996, section 8(3) gives trustees who acquire land the powers, for the purpose of exercising his or her trustee functions, of an absolute owner in relation to the land. For example, trustees will have the power to hold land jointly with other persons, have powers of sale and leasing, and power to grant mortgages in respect of land.
43.Sections 9 and 10 have a similar effect in relation to the application of Part III of the Act as sections 6(1) and 7(1)-(3) respectively in relation to Part II.
44.Section 9 makes it clear that the power to acquire land is in addition to trustees’ other powers but is subject to any restrictions or exclusions laid down in the trust instrument or by any enactment or subordinate legislation (defined in section 6(2)). The new power is therefore a default provision.
45.Section 10 provides that the power to acquire and deal with land created in Part III applies to all trustees, whenever the relevant trust was created. The new power does not apply to the trustees of a settlement under the Settled Land Act 1925 or to trustees of trusts subject to the Universities and Colleges Estates Act 1925.
46.The general duty of care imposed by section 1 of the Act applies to the exercise of the new statutory power to acquire land under section 8; to the exercise of any power to acquire land under the trust instrument and, in both cases, when exercising any power in relation to the land acquired (Schedule 1 paragraph 2).
47.By virtue of paragraph 45(1) of Schedule 2 to the Act the present restriction on the scope of the powers of trustees of land in section 6 of the Trusts of Land and Appointment of Trustees Act 1996 to land in England and Wales is removed so that trustees of land will have the same powers in relation to the acquisition, management and disposal of land will be applicable as other trustees.
The data on this page is available in the alternative data formats listed:
All content is available under the Open Government Licence v3.0 except where otherwise stated. This site additionally contains content derived from EUR-Lex, reused under the terms of the Commission Decision 2011/833/EU on the reuse of documents from the EU institutions. For more information see the EUR-Lex public statement on re-use.
