A trustee may be removed against their will in any of the following ways: • under an express power in the trust instrument • under section 36(1) of the Trustee Act 1925 (TA 1925) • by court order under TA 1925, s 41 • by direction of the beneficiaries under section 19 of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) Removal is not a step to be taken lightly. Misconduct is not necessary: friction between the trustees may be sufficient ground, although a dispute between the trustee and the beneficiaries over the manner in which the trustee exercises their discretion will not generally suffice but may be taken into account. The main consideration will always be the beneficiaries' welfare. Express power in the trust instrument Although TA 1925, s 36(2) expressly contemplates the existence of a power to remove trustees, in practice it is rare for a domestic trust instrument to incorporate an express power of removal (but they are common in offshore settlements). Most commonly, such a power will arise

In principle, the office of the trustee is lifelong. Nevertheless, a trustee may retire in a number of ways: • by the exercise of a provision in the trust instrument • if someone can be found to replace them, they may retire under the provisions of section 36 of the Trustee Act 1925 (TA 1925) • under the statutory power in TA 1925, s 39 • by the beneficiaries' written direction under section 19 of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) • with the beneficiaries' consent under the rule in Saunders v Vautier • by court order under TA 1925, s 41 Express provision in the trust instrument that a trustee may unilaterally retire A trust instrument may give a trustee an express, unilateral right to retire. However, there is a perception that such a clause provides encouragement for a less than conscientious trustee to take ‘the easy way out’. A trust instrument may provide for the automatic retirement of trustees on reaching a certain age. Retirement under the

The self-dealing rule The self-dealing rule is connected to, but distinct from, the fair dealing rule as well as the genuine transaction rule. There is authority that the rules are not, on a correct analysis, part of the duties or discretions of a trustee; rather they are restrictions which inhibit a trustee from acting in certain ways. This has important consequences in terms of limitation of any action against trustees by beneficiaries. The rule against self-dealing encompasses several slightly different rules which were considered in Right Reverend Hollis (Bishop of Portsmouth) v Rolfe: • a trustee cannot make a contract with themselves (subject to statutory exception) so any attempt to do so is ineffective—this was described in Right Reverend Hollis (Bishop of Portsmouth) v Rolfe as the primitive self-dealing rule, although it has also been described as the two-party rule • a trustee's power of sale cannot validly be exercised in their own favour (subject to any contrary provision in the trust instrument)—this was described in Right Reverend Hollis (Bishop of Portsmouth) v Rolfe

Source and availability Sources Trustees have certain powers conferred on them by statute, in particular by the Trustee Act 1925 (TA 1925) and the Trustee Act 2000 (TrA 2000). Available powers The powers conferred on trustees by TA 1925 and TrA 2000 include the following: • where a trustee has a duty or power to sell property, they may sell or concur with any other person in selling all or any part of the property, whether subject to prior charges or not and either together or in lots, by public auction or by private contract, subject to any such conditions respecting title or evidence of title or other matters as the trustee thinks fit with power to vary any contract for sale, and to buy in at any auction or to rescind any contract for sale and to resell, without being answerable for any loss • where trustees are authorised by the instrument creating the trust or by law to pay or apply capital money subject to the trust for any purpose or in any manner, they will

General investment power The powers possessed by trustees to administer a trust effectively emanate from statute, mainly the Trustee Act 1925 (TA 1925) and the Trustee Act 2000 (TrA 2000), as supplemented by the terms of the trust instrument, except for: • trustees of occupational pension schemes • authorised unit trusts • charitable common investment schemes Prior to TrA 2000, in the absence of express powers the trustees had to operate within the terms of the Trustee Investments Act 1961 (TIA 1961). TIA 1961 was largely repealed by TrA 2000, which came into force on 1 February 2001. TIA 1961 was restrictive, eg trustees could only make specified 'authorised' investments, and due to this, it became common practice in trust instruments to widen the statutory powers to permit trustees to invest in any suitable type of investment as if they were an absolute owner. TrA 2000, s 3 allows trustees to make any kind of investment that they would be entitled to make if they were the absolute owners of the trust assets, regardless of

Pensions Analysis: On 6 February 2024, the Financial Markets Law Committee (FMLC) published a paper on the difficulties and uncertainties faced by many modern trustees in trying to meet their fiduciary duties when setting investment strategy, principles and policies and making investment decisions around current expectations in relation to sustainability and the subject of climate change. Rhiannon Bardsley, associate at Arc Pensions Law examines some of the issues identified and the implications for trustees.

Private Client analysis: This decision from the High Court of Justice helps to clarify the rights and duties of trustees and settlors derived from the revocation of a trust and the transfer of assets following a revocation. The case in particular considers the right of trustees to the statutory indemnity, the amount that they are entitled to retain to cover liabilities, costs and expenses and how long they may retain such assets for. The court held that most of the amount retained by the trustees of the revoked trust should be released, that they could retain the remaining assets for no more than 12 months and that their right to indemnity should be curtailed and limited to 70% of their costs based on their conduct. Written by Ronnie Myers, senior associate and Ricardo Sitrangulo, legal adviser and both at Burges Salmon LLP.

Restructuring & Insolvency analysis: The court considered an application by the trustee in bankruptcy (the trustee) for his costs of, and occasioned by, an application for a private examination and provision of information, pursuant to section 366 of the Insolvency Act 1986 (IA 1986) (the application). The case addresses the costs position when, ultimately, no order for a private examination is granted. The court held that the trustee was entitled to all of his costs of, and occasioned by, the application. This included the costs associated with an application to join the third respondent to the application and the application for a hearing to be listed to determine the costs. The court rejected the respondents’ argument that, as no order for private examination had been granted, the trustee should be treated as the unsuccessful party. Rather, the issue and pursuit of the application resulted in significant information being disclosed. It was also entirely unrealistic to suggest that the trustee had no success just because the evidence disclosed ‘in answer’ to the application, obviated the need for an order for private examination. Written by Dawn McCambley, barrister at Radcliffe Chambers, who was instructed on behalf of the successful trustee in this case.

Pensions analysis: The Pensions Ombudsman has rejected a complaint about a pension transfer. Martin Scott of gunnercooke LLP looks at the decision.

Pensions analysis: In the decision of Mr Y, PO-23597, the Pensions Ombudsman has upheld a complaint that an employer and scheme provider failed to deal adequately with unpaid contributions to an automatic enrolment scheme. The employer had unreasonably delayed providing information in relation to an automatic enrolment scheme and the trustee had failed to discharge its duties and neglected to monitor contributions. Martin Scott of gunnercooke LLP looks at the decision

A person who creates a trust.

HMRC's TRS enables trustees to register a relevant trust, in order to discharge their obligations under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692.