The following Private Client guidance note provides comprehensive and up to date legal information covering:
Produced in partnership with Katharina A. Byrne.
It is vital that the correct procedure is followed when there is a change of trustees. Depending on the circumstances, the relevant steps will be set out in the trust instrument, governing legislation, or both. The mistake may consist of an ineffective retirement of the current trustee, or an ineffective appointment of the replacement trustee, or both.
Where a mistake is made, it can have serious consequences. For the trustees, it can mean an unexpected tax charge, as in the English case of Jasmine Trustees Ltd and others v Wells & Hind  1 All ER 1142 (see below). Another consequence is that the former trustees continue in office, remaining subject to all the usual duties of a trustee, but without possession and/or control of the trust property. For the 'new' trustee, this means that he is not actually the trustee, but at most, a trustee de son tort (a category of constructive trustee), exposed to all the liability which that status involves.
The term 'trustee' is not defined for income tax or capital gains tax (CGT) purposes. In both cases, however, trustees are treated as if they were a single and continuing person.
Following the Jasmine Trustees case, it is thought that 'trustee' for income and CGT purposes means
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