Trustees

Trustees—appointment of trustees

There are various ways in which a trustee may be appointed. Trustees will usually be appointed by the instrument that brings the trust into existence. The trust instrument should also seek to make provision for any subsequent appointments of new trustees that may be necessary during the existence of the trust.

Trustees may also be appointed by the court and there are occasions when either the settlor or the beneficiaries may have a role in the appointment of new trustees.

See Practice Note: Trustees—appointment of trustees.

Trustees—retirement of trustees

In principle, the office of trustee is lifelong. Nevertheless, a trustee may retire in a number of ways:

  1. by taking advantage of any provision in the trust instrument

  2. if someone can be found to replace them, under the provisions of section 36 of the Trustee Act 1925 (TA 1925)

  3. under the statutory power in TA 1925, s 39

  4. by the beneficiaries' written direction under section 19 of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996)

  5. with the beneficiaries' consent

  6. by court order under TA

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All in? Court confirms when a settlement is 'made' for the purposes of excluded property (Accuro Trust (Switzerland) SA v The Commissioners for HMRC)

Private Client analysis: This case considered the meaning of 'relevant property' under the settlements regime of the Inheritance Tax Act 1984 (IHTA 1984) and, in particular, the time at which this definition is to be tested. The question arose as to whether the trustees of an offshore trust established by a non-UK domiciled settlor were subject to the UK settlements regime in respect of property added to the trust after the settlor became deemed domiciled in the UK, or whether they were exempt from such charges as the trust consisted solely of excluded property. The First-tier Tribunal (FTT) held that whether trust property is excluded property is based on the status of the trust at the time that it was established, not at the time that the property in question was added to the settlement. As a result, the trust in this case did consist solely of excluded property and no inheritance tax (IHT) charges arose as a result of either the ten-year anniversary or capital distributions. The FTT was also asked to consider whether their jurisdiction was appellate, or supervisory only. The FTT held that, while their jurisdiction was supervisory, the questions raised by the trustees were relevant in establishing whether HMRC had acted reasonably and that the outcome (ie that the paid IHT should be refunded and that no further IHT was due) would be the same in either case. Written by Katherine Willmott, senior associate solicitor at Foot Anstey LLP.

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