A more recent version of these Investment notes – written by Cambridge/Bpp/College Of Law students – is available here.
The following is a more accessble plain text extract of the PDF sample above, taken from our GDL Equity and Trusts Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
E&T: Investment Introduction
- Trustees under duty to invest trust fund for benefit of beneficiaries - source of power to invest:
1. trust instrument.
2. statute: Trustee Act 2000 - applies where trust instrument silent. came into force 1 Feb 2001: repealed Trustee Investments Act 1961. applies to all trusts (whenever created).
- TA 2000: fixes problems with old law.
1. new statutory duty of care. old law: common law duty of prudence (Speight v Gaunt ; Re Whitely; Whitely v Learoyd ). but common law duty still relevant: statutory duty only applies to some aspects of work.
2. widens range of investments. old law: extremely limited options. but still limited - s8 TA 2000: equitable interests in land + overseas land not authorised investments.
3. remuneration for professional trustees allowed. old law: trustees could not charge unless express charging clause in instrument.
4. allows delegation of investment decisions. old law: no delegation unless authorised by trust instrument ? could not invest in discretionary portfolios.
- Structure of TA 2000: 6 parts. Part I: new statutory duty of care. Part II: trustee investment powers (other than land). Part III: trustee investment powers over land. Part IV: agents/nominees and delegation. Part V: remuneration. Part VI: miscellaneous.
Part I TA 2000: Statutory Duty of Care
s1(1): whenever duty applies, t. must exercise care + skill reasonable in circs., having regard to: (a): any special knowledge or experience t. has or holds himself out as having; and partially subjective test: t. judged by higher standard if holds self out as expert. (b): professional trustee - any special knowledge or experience that it is reasonable to expect of person acting in course of that kind of business/profession. objective test: always applies to professional trustee. s2: Schedule 1 - provisions about when duty of care applies. Schedule 1: application of duty of care. para 1: investment. para 2: acquisition of land. para 3: agents, nominees and custodians (inc. selection, determining terms, policy statement). para 7: duty can be wholly/partly excluded by trust instrument.
Buy the full version of these notes or essay plans and more in our GDL Equity and Trusts Notes.