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Trustee Act 2000

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34: 622:. The 1961 Act was repeatedly criticised for its "very conservative investment policy for trustees". The powers of investment trustees were given were restrictive and narrow, and at the same time the trustees were expected to go through expensive and complicated procedures to exercise them. This new power of investment is treated as a default provision - it is overridden if the trust instrument itself restricts the ways trust money can be invested. If the trust instrument was created prior to 3 August 1961, however, its provisions regarding investments are treated as void. The new provisions apply retrospectively, i.e. to trusts created before the passage of the Act. They do not, however, apply to trusts governed by the 720:. Section 28 states the default position is that trustees are entitled to remuneration if it says so in the trust instrument or if a trustee acts in a "professional capacity". A trust can differ from this default, but the Act confirms the recent developments in the common law from the old default position that trustees were entitled to nothing unless it was explicitly stated that they were. Section 29 goes on to say that non-charitable professional trustees are entitled to "reasonable remuneration" which will be a sum that the court thinks is commensurate with the work done, along the principles of 609:
care creates problems, because it sets a fixed, objective point. It is not known where this point is, however - a professional trustee obviously cannot be held to the standards of a lay trustee, but it has been seen as equally unfair that a lay trustee would be held to the standards of a professional one. This duty, unlike the previous common law duty, at no point requires the trustee to act. The duty of care has been seen to be advantageous to charities compared to the old one, because it allows those charities forced to employ lay trustees to use professional agents to exercise some duties.
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on trustees who delegate their powers, with the duty consisting of three elements. Firstly, trustees are required to make sure that agent is suitable for the job he is employed to do. Secondly, they are required to consider whether or not to intervene in the appointment if circumstances demand it. Thirdly, trustees are required to intervene after appointment if the circumstances demand it. Section 23 establishes trustees' liability for the actions of agents; a trustee is liable for negligence if he violates the general duty of care set out in Section 1, but not otherwise.
726:. This is automatic if the trustee is a corporation, but will require consent of all other trustees if the trustees are natural persons. Section 30 stipulates that rules on charitable trustee remuneration are to be found in a statutory instrument drawn up by the Secretary of State. Trustees will be reimbursed from the trust fund itself, as will be authorised agents, nominees and custodians who are properly appointed by the trustees all so long as the expenses and payable remuneration are incurred while conducting the affairs of the trust. 572:. It indicates that a professional trustee would be held to a higher standard than a family trustee. The subjective element requires a court to exercise greater scrutiny if a trustee had any special skills, which takes the trustee's ability above the objective baseline. So if a trustee had a special accountancy qualification that trustee would be expected to exercise a greater than normal degree of care over the trust's accounts. 664:
his ability in and practical experience of financial and other matters relating to the proposed investment". This is an objective test, and as with much of Section 4, is almost identical to the test laid out in the 1961 Act. The advice must be sought before the exercise of any investment power, and is also required if the trustee wishes to change where and how the trust is invested.
1277:, "if allowed, the trust estate might be loaded, and rendered of little value, Besides, the great difficulty there might be in settling the quantum of such allowance, especially as one man's time may be more valuable than that of another; and there can be no hardship in this respect upon any trustee, who may choose whether he will accept the trust, or not." 704:
dispose of trust assets, allocating fees or other payments, appointing a trustee or further delegating duties. Section 15 requires that, where an administrative function is delegated, special conditions must be satisfied. Section 15(1) makes it mandatory to write and sign a policy agreement, which lays out guidance on how a function should be undertaken.
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2 Ch 58, asked whether real estate could be acquired, Lawrence J suggested that acquiring assets such as antiques or gold which yield no income are not investments that trustees may acquire. The Explanatory Notes to TA 2000, para 22 suggests otherwise, and notes that trust instruments can deviate in
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Under Section 5, trustees are required to obtain "proper advice" before investing, unless the circumstances mean that it is inappropriate or unnecessary to do so. "Proper advice" is defined in Section 5(4) as "advice of a person who is reasonably believed by the trustee to be qualified to give it by
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Section 4 of the Act requires trustees to look at the "standard investment criteria" when investing. These criteria are defined in Section 4(3) as the need to check the suitability of investments for the trust, and the importance of diversification. Section 4(2) requires that, having exercised their
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said that "as a general rule a trustee sufficiently discharges his duty if he takes in managing trust affairs all those precautions which an ordinary prudent man of business would take in managing similar affairs of his own", similar to an objective test. It has been pointed out that the new duty of
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Sections 21–23 cover the review of agents and the liability of trustees for agents actions. Section 21 identifies that review and liability occurs when the trustees appoints agents, nominees and custodians under the Act or under similar provisions in the trust instrument. Section 22 provides a duty
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Under Section 8 of the Act, trustees can purchase land "as an investment, for occupation by the beneficiaries or for any other reason". Once this land has been purchased they are free to do with it what they could if they were the absolute owner; they can sell it, lease it or mortgage it. This is a
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default provision, and can be made irrelevant if the trust instrument contains other rules and requirements. This land may only be bought in Britain; if trustees wish to purchase land outside Britain, they must either invest in companies which own land or alter the trust instrument to allow it.
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The Act is divided into six parts, forty-three sections and four schedules, and focuses upon five specific areas of law. These are the duty of care imposed upon trustees, trustees' power of investment, the power to appoint nominees and agents, the power to acquire land, and the power to receive
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Sections 11–20 of the 2000 Act cover the appointment of agents. Section 11(1) allows for trustees " authorise any person to exercise any or all of their delegable functions as their agent", with Section 11(2) defining "delegable functions" as any function other than the powers to distribute or
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Investment powers and limits on those powers are set out in Part II of the Act. Section 3(1) states that "subject to the provisions of this part, a trustee may make any kind of investment that he could make if he was absolutely entitled to the assets of the trust". This is far looser than the
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The Act covers five areas of trust law: the duty of care imposed upon trustees, trustees' power of investment, the power to appoint nominees and agents, the power to acquire land, and the power to receive remuneration for work done as a trustee. It sets a new duty of care, both objective and
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Rules on the acquisition of land are covered in Part III of the Act. Until the passage of the Act, trustees had no right to purchase land with trust money, with two exceptions; first, if the trust instrument authorised or required the trustee to purchase land and second, Section 6(4) of the
653:, wanted the mineworkers' pensions to be reinvested in the British Coal industry and keep jobs, the court held that because this would make less money than other investments it would be a breach of trust. Subsequent case law has qualified this controversial principle, such as 648:
Ch 270 Megarry VC suggested that trustees have an overriding duty to invest solely in the financial interests of beneficiaries, unless the trust instrument laid down otherwise. So even though the National Union of Mineworkers' leader,
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Part IV of the act covers the delegation of powers to agents, and the trustees liability for their acts. This is an area that has long been criticised by practitioners and academics, particularly the provisions of the
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1 WLR 1241, and it is a point of ongoing debate. It is assumed by academics that, if a trust suffered a loss as a result of a trustee investing in unsuitable areas, the trustee would be liable for breach of trust.
555:(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. 192:
standard, massively extends the trustees' power of investment and limits the trustees' liability for the actions of agents, also providing for their remuneration for work done in the course of the trust.
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power of investment, trustees must regularly refer back to the standard investment criteria to check that they are being fulfilled. This does little more than restate what is given in the
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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.
798: 564:, depending on the size and responsibility of their office, to exercise "such care and skill as is reasonable in the circumstances". This codifies the common law and reflects 818: 1267:
Ch 61, remuneration allowed if in "all the other circumstances of the case, that it would be in the interests of the beneficiaries to increase the remuneration", and
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it was confirmed that a trustee may escape liability for an agent's acts if he acted in good faith, which was simply a test of honesty rather than reasonableness.
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published a report advising reform of the rules over trustees delegating their powers to other people. Other trusts reform came about through the
1462: 216:) little else was done. Further papers were published on similar areas in 1997 and 1999, and finally the Trustee Bill 2000 was introduced to the 655: 259: 220:
in January 2000, implementing the proposals laid out in the Law Commission's 1999 report "Trustees' Powers and Duties". The Act was given the
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According to Schedule 1, the duty of care may be excluded by the trust instrument, but if it is not, it must be exercised when,
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on 23 November 2000, and most of it came into effect on 1 February 2001 through the Trustee Act 2000 (Commencement) Order 2001.
56: 172:. Reform in these areas had been advised as early as 1982, and finally came about through the Trustee Bill 2000, based on the 1438: 1402: 1353: 984: 420: 254: 201: 173: 694:. The Act allowed the trustees to appoint an agent in good faith, and gave them no liability for the agent's acts. In 446: 184:
on 23 November 2000 and came into force on 1 February 2001 through the Trustee Act 2000 (Commencement) Order 2001, a
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Commentators have agreed that this is largely a reiteration of the previous common law rule on the duty of care. In
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This test has both an objective and subjective element. There is an objective baseline of care that every
208:, but this did not cover most of trusts law. Although there were some other small changes (such as a 1996 1457: 565: 548:
must exercise such care and skill as is reasonable in the circumstances, having regard in particular -
504: 487: 451: 677:, which allowed trustees to buy land either as an investment or for habitation by the beneficiaries. 466: 200:
Lawyers and academics had been pushing for reform of this area of law since at least 1982, when the
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The words "Subject to the following provisions of this section" in Section 1(2), (3)-(5)
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Sections 1–3,5,6,8,9,12,13,15 and 16(1), Schedules 1,2 and Paragraph 1(1) of Schedule 4
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Shindler, Geoffrey (2001). "Trustee Act 2000: A Practical Guide on Some Key Features".
1151: 989: 875: 758: 623: 410: 339: 147: 129: 1434: 1398: 1368: 1349: 471: 369: 308: 235: 169: 91: 1143: 1026: 997: 788: 691: 644: 425: 374: 642:, however, and this provision has been criticised for not defining "suitable". In 1363:
Meakin, Robert (2001). "The Trustee Act 2000: points in practice for charities".
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Part I of the Act sets out a general duty of care, which trustees have towards
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as in force today (including any amendments) within the United Kingdom, from
717: 221: 181: 81: 176:'s 1999 report "Trustees' Powers and Duties", which was introduced to the 1138:
Langbein, J; R Posner (1980). "Social Investing and the Law of Trusts".
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Part V of the Act, sections 28 to 33, deals with trustees'
544:. Section 1 defines this duty, which is that a trustee, 853:
Sections 6(4), 9(8), 17(1), Schedule 3, paragraph 3(4)
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dealing with audits and valuations of trust property.
188:, with the Act having effect over England and Wales. 1380:
Panesar, Sukhninder (2001). "The Trustee Act 2000".
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Trusts of Land and Appointment of Trustees Act 1996
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Trusts of Land and Appointment of Trustees Act 1996
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Trusts of Land and Appointment of Trustees Act 1996
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Trusts of Land and Appointment of Trustees Act 1996
763:Sections 70,71, Section 86(2) paragraphs A and B 618:previous provisions, which were contained in the 1449: 1137: 887: 212:that extended the rights of trustees under the 1395:Text, Cases and Materials on Equity and Trusts 992:s 174 (duty of care, skill and diligence) and 656:Harries v The Church Commissioners for England 512: 1012:Re Produce Marketing Consortium Ltd (No 2) 591:exercising powers to compound liabilities; 519: 505: 1115: 1113: 1111: 839:Church of England (Pensions) Measure 1988 532:remuneration for work done as a trustee. 168:that regulates the duties of trustees in 1411: 1230: 1228: 1226: 1180: 1178: 1176: 1174: 1040: 1038: 809:House of Commons Members' Fund Act 1962 684: 1392: 1379: 355:Perpetuities and Accumulations Act 2009 350:Perpetuities and Accumulations Act 1964 180:in January 2000. The bill received the 1463:United Kingdom Acts of Parliament 2000 1450: 1427:Todd & Wilson's Textbook on Trusts 1424: 1397:(4th ed.). Taylor & Francis. 1362: 1343: 1264:Re Duke of Norfolk's Settlement Trusts 1108: 913: 911: 667: 1348:(6th ed.). Routledge-Cavendish. 1223: 1171: 1035: 985:Bartlett v Barclays Bank Trust Co Ltd 769:Duchy of Cornwall Management Act 1893 130:Text of statute as originally enacted 113:Duchy of Cornwall Management Act 1893 612: 908: 13: 137:Revised text of statute as amended 14: 1474: 1024:TA 2000 Sch 1, para 7; see also 783:Sections 96, 98(1) and (2), 100 166:Parliament of the United Kingdom 39:Parliament of the United Kingdom 32: 1337: 1325: 1316: 1307: 1298: 1289: 1280: 1255: 1246: 1237: 1214: 1205: 1196: 1187: 1162: 1131: 1122: 1099: 1090: 1081: 1065: 1056: 1047: 711: 585:appointing or reviewing agents; 535: 1018: 1003: 976: 967: 945: 920: 899: 793:Part 1, Sections 21,23 and 30 365:Recognition of Trusts Act 1987 1: 881: 195: 799:Clergy Pensions Measure 1961 749:Trustee Investments Act 1961 640:Trustee Investments Act 1961 632:occupational pension schemes 620:Trustee Investments Act 1961 390:Variation of Trusts Act 1958 214:Trustee Investments Act 1961 144:Text of the Trustee Act 2000 7: 1331:Trustee Act 2000 Schedule 4 869: 736: 582:acquiring or managing land; 123:Status: Current legislation 10: 1479: 819:Cereals Marketing Act 1965 729: 588:insuring trust properties; 488:Conflict of laws of trusts 18:United Kingdom legislation 1393:Ramjohn, Mohamed (2008). 1344:Hudson, Alastair (2009). 1273:(1734) 3 P Wms 249, 251, 1261:See Hudson (2009) p.317; 955:. UK Statute Law Database 928:"Trustee Act 2000 (C.29)" 467:Rule against perpetuities 142: 135: 128: 121: 105: 100: 90: 80: 75: 65: 55: 45: 31: 26: 1071:Wilson (2007) p.374; nb 1009:Panesar (2001) p.29; cf 579:investing trust capital; 370:Statute of Frauds (1677) 345:Law of Property Act 1925 335:Charitable Uses Act 1601 67:Territorial extent  1431:Oxford University Press 1420:(1). Jordan Publishing. 1414:Elder Law & Finance 1367:. Sweet & Maxwell. 1365:Private Client Business 932:UK Statute Law Database 859:Cathedrals Measure 1999 360:Public Trustee Act 1906 1425:Wilson, Sarah (2007). 628:Authorised Unit Trusts 558: 493:Hague Trust Convention 227: 779:Settled Land Act 1925 685:Agents and delegation 546: 1382:Coventry Law Journal 1211:Ramjohn (2007) p.495 1119:Ramjohn (2007) p.494 1105:Ramjohn (2007) p.493 1096:Edwards (2007) p.456 973:Trustee Act 2000 s 1 829:Agriculture Act 1967 210:Statutory Instrument 186:Statutory Instrument 1386:Coventry University 1252:Hudson (2009) p.318 1243:Panesar (2001) p.34 1234:Panesar (2001) p.33 1220:Panesar (2001) p.32 1202:Hudson (2009) p.401 1193:Wilson (2007) p.376 1184:Panesar (2001) p.31 1168:Hudson (2009) p.400 1140:Michigan Law Review 1128:Shindler (2001) p.4 1087:Hudson (2009) p.332 1053:Hudson (2009) p.331 1044:Panesar (2001) p.30 994:Insolvency Act 1986 917:Panesar (2001) p.28 905:Shindler (2001) p.1 896:Shindler (2001) p.2 668:Acquisition of land 260:Discretionary trust 23: 1458:English trusts law 990:Companies Act 2006 876:English trusts law 759:Charities Act 1993 734:The Act repealed: 624:Charities Act 1993 411:Account of profits 340:Charities Act 2006 255:Constructive trust 148:legislation.gov.uk 21: 1440:978-0-19-920326-0 1404:978-0-415-44294-7 1355:978-0-415-49771-8 1346:Equity and Trusts 1062:Meakin (2001) p.2 867: 866: 613:Investment powers 529: 528: 472:Three certainties 462:Trustee liability 236:English trust law 170:English trust law 154: 153: 101:Other legislation 71:England and Wales 27:Act of Parliament 1470: 1444: 1429:(8th ed.). 1421: 1408: 1389: 1376: 1359: 1332: 1329: 1323: 1320: 1314: 1311: 1305: 1302: 1296: 1293: 1287: 1284: 1278: 1259: 1253: 1250: 1244: 1241: 1235: 1232: 1221: 1218: 1212: 1209: 1203: 1200: 1194: 1191: 1185: 1182: 1169: 1166: 1160: 1159: 1135: 1129: 1126: 1120: 1117: 1106: 1103: 1097: 1094: 1088: 1085: 1079: 1069: 1063: 1060: 1054: 1051: 1045: 1042: 1033: 1027:Armitage v Nurse 1022: 1016: 1007: 1001: 998:wrongful trading 980: 974: 971: 965: 964: 962: 960: 949: 943: 942: 940: 938: 924: 918: 915: 906: 903: 897: 894: 789:Trustee Act 1925 737: 692:Trustee Act 1925 645:Cowan v Scargill 521: 514: 507: 426:Equitable remedy 380:Trustee Act 2000 375:Trustee Act 1925 250:Charitable trust 232: 231: 158:Trustee Act 2000 86:23 November 2000 68: 36: 35: 24: 22:Trustee Act 2000 20: 1478: 1477: 1473: 1472: 1471: 1469: 1468: 1467: 1448: 1447: 1441: 1405: 1356: 1340: 1335: 1330: 1326: 1321: 1317: 1312: 1308: 1304:TA 2000 s 31(1) 1303: 1299: 1295:TA 2000 s 29(2) 1294: 1290: 1286:TA 2000 s 29(1) 1285: 1281: 1270:Robinson v Pett 1260: 1256: 1251: 1247: 1242: 1238: 1233: 1224: 1219: 1215: 1210: 1206: 1201: 1197: 1192: 1188: 1183: 1172: 1167: 1163: 1148:10.2307/1288337 1136: 1132: 1127: 1123: 1118: 1109: 1104: 1100: 1095: 1091: 1086: 1082: 1070: 1066: 1061: 1057: 1052: 1048: 1043: 1036: 1023: 1019: 1008: 1004: 981: 977: 972: 968: 958: 956: 951: 950: 946: 936: 934: 926: 925: 921: 916: 909: 904: 900: 895: 888: 884: 872: 732: 714: 687: 670: 651:Arthur Scargill 615: 601:Speight v Gaunt 538: 525: 416:Breach of trust 283:Resulting trust 230: 198: 124: 117: 106:Repeals/revokes 96:1 February 2001 66: 41: 33: 19: 12: 11: 5: 1476: 1466: 1465: 1460: 1446: 1445: 1439: 1422: 1409: 1403: 1390: 1377: 1360: 1354: 1339: 1336: 1334: 1333: 1324: 1315: 1306: 1297: 1288: 1279: 1275:Lord Talbot LC 1254: 1245: 1236: 1222: 1213: 1204: 1195: 1186: 1170: 1161: 1130: 1121: 1107: 1098: 1089: 1080: 1064: 1055: 1046: 1034: 1017: 1002: 975: 966: 944: 919: 907: 898: 885: 883: 880: 879: 878: 871: 868: 865: 864: 863:Section 16(1) 861: 855: 854: 851: 845: 844: 843:Section 14(b) 841: 835: 834: 833:Section 18(3) 831: 825: 824: 823:Section 18(3) 821: 815: 814: 811: 805: 804: 803:Section 32(2) 801: 795: 794: 791: 785: 784: 781: 775: 774: 771: 765: 764: 761: 755: 754: 751: 745: 744: 741: 731: 728: 723:quantum meruit 713: 710: 686: 683: 669: 666: 614: 611: 606:Lord Blackburn 596: 595: 592: 589: 586: 583: 580: 570:insolvency law 557: 556: 553: 537: 534: 527: 526: 524: 523: 516: 509: 501: 498: 497: 496: 495: 490: 482: 481: 477: 476: 475: 474: 469: 464: 459: 454: 449: 441: 440: 436: 435: 434: 433: 428: 423: 418: 413: 405: 404: 400: 399: 398: 397: 395:Wills Act 1837 392: 387: 382: 377: 372: 367: 362: 357: 352: 347: 342: 337: 329: 328: 324: 323: 322: 321: 316: 311: 306: 298: 297: 293: 292: 291: 290: 285: 280: 272: 267: 262: 257: 252: 244: 243: 242:Types of trust 239: 238: 229: 226: 218:House of Lords 202:Law Commission 197: 194: 178:House of Lords 174:Law Commission 160:(c. 29) is an 152: 151: 140: 139: 133: 132: 126: 125: 122: 119: 118: 116: 115: 109: 107: 103: 102: 98: 97: 94: 88: 87: 84: 78: 77: 73: 72: 69: 63: 62: 59: 53: 52: 49: 43: 42: 37: 29: 28: 17: 9: 6: 4: 3: 2: 1475: 1464: 1461: 1459: 1456: 1455: 1453: 1442: 1436: 1432: 1428: 1423: 1419: 1415: 1410: 1406: 1400: 1396: 1391: 1387: 1383: 1378: 1374: 1370: 1366: 1361: 1357: 1351: 1347: 1342: 1341: 1328: 1319: 1310: 1301: 1292: 1283: 1276: 1272: 1271: 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480:International 479: 478: 473: 470: 468: 465: 463: 460: 458: 455: 453: 450: 448: 445: 444: 443: 442: 438: 437: 432: 429: 427: 424: 422: 419: 417: 414: 412: 409: 408: 407: 406: 402: 401: 396: 393: 391: 388: 386: 383: 381: 378: 376: 373: 371: 368: 366: 363: 361: 358: 356: 353: 351: 348: 346: 343: 341: 338: 336: 333: 332: 331: 330: 326: 325: 320: 317: 315: 312: 310: 307: 305: 302: 301: 300: 299: 296:Functionaries 295: 294: 289: 286: 284: 281: 279: 277: 273: 271: 270:Purpose trust 268: 266: 265:Express trust 263: 261: 258: 256: 253: 251: 248: 247: 246: 245: 241: 240: 237: 234: 233: 225: 223: 219: 215: 211: 207: 203: 193: 189: 187: 183: 179: 175: 171: 167: 163: 159: 149: 145: 141: 138: 134: 131: 127: 120: 114: 111: 110: 108: 104: 99: 95: 93: 89: 85: 83: 79: 74: 70: 64: 60: 58: 54: 50: 48: 44: 40: 30: 25: 16: 1426: 1417: 1413: 1394: 1381: 1364: 1345: 1338:Bibliography 1327: 1322:TA 2000 s 33 1318: 1313:TA 2000 s 32 1309: 1300: 1291: 1282: 1268: 1262: 1257: 1248: 1239: 1216: 1207: 1198: 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Retrieved 947: 935:. 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Index

Parliament of the United Kingdom
Long title
Citation
Royal assent
Commencement
Duchy of Cornwall Management Act 1893
Text of statute as originally enacted
Revised text of statute as amended
Text of the Trustee Act 2000
legislation.gov.uk
act
Parliament of the United Kingdom
English trust law
Law Commission
House of Lords
Royal Assent
Statutory Instrument
Law Commission
Trusts of Land and Appointment of Trustees Act 1996
Statutory Instrument
Trustee Investments Act 1961
House of Lords
Royal Assent
English trust law
Charitable trust
Constructive trust
Discretionary trust
Express trust
Purpose trust
Quistclose trust

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