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182:, along with land. It did not take into account the deprecation of currency or inflation, meaning that if the trustees invested in stocks and shares they were at risk of losing money simply because of the falling value of the pound sterling. As a result, even though the income from a trust might remain nominally constant, the real value of that income could be much reduced over the lifetime of the trust. This was recognised by lawyers, who had been advising their clients to structure trusts in such a way as to allow their trustees to invest in wider areas than the Statutory Lists. In 1952 the report of the
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restricted to "narrow range" investments. The valuation had to be done by "a person reasonably believed by the trustee to be qualified to make it". This division of funds was permanent, and the quarter and three quarters became distinct units. The permanence of the division was the Act's most controversial section.
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on 13 May 1959 promised further reform, and a detailed White Paper was published in
December. In November 1960 a Bill based on that report was introduced in the House of Lords, where it was much scrutinised by solicitors and barristers (particularly at the Committee stage) owing to its complexity.
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The Act was considered a bad one, since it required a "very conservative investment policy for trustees". The powers given to investment trustees were restrictive and narrow, and the trustees were expected to go through expensive and complicated procedures to exercise them. The Act was criticised
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on 3 August 1961, it removed the "Statutory Lists" system and replaced it with sets of specific investment areas. The Act was heavily criticised for the way it set these areas out, particularly the requirement that trusts trying to invest in multiple areas would need to be permanently divided. A
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If trustees wished to invest in "wide range" investments, they were required to have the trust fund valued and divided into two parts – three quarters of the value in one part, and a quarter in the other. The quarter was to be invested in "wide range" investments, while the remainder was
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The Act replaced the old
Statutory Lists system of investments with two sets of "narrow range" investments and a set of "wide range" investments, both covered in the first Schedule of the Act. The first set of "narrow range" investments included
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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.
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called it "overly cautious and restrictive", and suggested that some trusts were underperforming because of the difficulty of complying with the Act's provisions. The
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and similar "small" investments, which could be bought at a Post Office and did not require the trustee to seek advice before investing. The second set included
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on "Government Policy on
Charitable Trusts in England and Wales" in 1955, which proposed a reform of the Statutory Lists system. This came about under the
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effectively nullified the 1961 Act's terms in relation to trustee investment, and the 2000 Act is now the principal piece of legislation in this area.
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paper called its terms "overly cautious and restrictive", suggesting that some trusts were underperforming as a result. The passing of the
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The Bill received its royal assent on 3 August 1961, and passed into law as the
Trustee Investments Act 1961.
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repealed most of the 1961 Act and now serves as the principal piece of guidance on trustee investments.
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as in force today (including any amendments) within the United
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almost immediately for its complexity and outdatedness. A 1997 paper by the
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Prior to the 1961 Act, the areas trustees could invest in were based on the
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that covers where trustees can invest trust funds. Given the
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Charities and
Trustee Investment (Scotland) Act 2005
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366:Edwards, Richard; Nigel Stockwell (2007).
125:Text of the Trustee Investments Act 1961
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485:United Kingdom Acts of Parliament 1961
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452:Todd & Wilson's Textbook on Trusts
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389:(6th ed.). Routledge-Cavendish.
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370:(8th ed.). Pearson Longman.
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435:(2nd ed.). Routledge.
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433:Sourcebook on trusts law
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353:Edwards (2007) p.457
335:Edwards (2007) p.456
308:Ramjohn (1998) p.795
299:Ramjohn (1998) p.794
263:Ramjohn (1998) p.793
344:Wilson (2007) p.374
326:Hudson (2009) p.332
197:A statement in the
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317:Price (1961) p.741
290:Price (1961) p.740
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407:Modern Law Review
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