The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an outline of the main trustee powers and duties. Although there is a degree of overlap between them, the term ‘powers’ usually refers to discretionary or optional actions which the trustees may take for the purpose of maintaining the trust and supporting beneficiaries. The term ‘duties’ refers to obligations placed upon trustees which they must observe in carrying out their role.
The powers which a trustee enjoys can be categorised as either:
administrative powers, or
Administrative powers enable him to discharge his duty to manage and maintain the trust estate. Administrative powers include buying or selling trust assets if, and when appropriate, investing trust money or insuring trust property.
Dispositive powers enable him to bestow benefits on the beneficiaries of the trust. Dispositive powers include advancing or lending beneficiaries money or trust property, paying income to them, or allowing them to use trust property.
Depending on the nature of the trust concerned, there may be an obligation on the trustees to exercise their powers, or they may have discretion as to whether or not they should exercise them. Trustees must consider whether to exercise a discretionary power, but they are not compelled to exercise it.
Unless the trust deed provides to the contrary, trustees have inherent power to carry out acts which are reasonable for realising or protecting the trust property. They may, therefore, make payments which are proper for them to make in order to carry out the terms of the trust.
Powers may be conferred on the trustees by the trust deed or by statute. The trustees must exercise their powers reasonably, in good faith and for the purposes of carrying out the terms of the trust. They must act honestly and impartially on behalf of all the beneficiaries unless the trust deed gives contrary instructions (to favour one beneficiary above others, for example). Administrative powers must be exercised in
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