The following Trusts and Inheritance Tax guidance note 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 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
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
To view our latest tax guidance content, sign in to Tolley® Guidance or register for a free trial.