Trustee Investments Act 1961
1961 c. 62
An Act to make fresh provision with respect to investment by trustees and persons having the investment powers of trustees, and by local authorities, and for purposes connected therewith.
This Act is reproduced in SIF Group 128 (Trusts and Liferents, Scotland) and Group 98:4 (Property, England & Wales: Trusts).
For extent of Act as regards Northern Ireland, see s. 17(3)
Act applied with modifications by Trustee Act (Northern Ireland) 1958 (c. 23), s. 1
Act applied (S.)(21.3.1995) by S.I. 1995/471, art. 28(1)
Power to modify Act conferred (E.W.S) (1.8.1993) by 1993 c. 10, ss. 70(1)(b), 99(1).
Act modified (E.W.S.)(25.4.1995) by S.I. 1995/1092, art.3
Act applied (30.6.1999 but with application as mentioned in s. 38(2)(3)) by 1999 Measure No. 1, s. 16(1) (with ss. 33, 34, 37, 38(5)(6))
C4C5C37F1 1 New powers of investment of trustees. C3
F1251
A trustee may invest any property in his hands, whether at the time in a state of investment or not, in any manner specified in Part I or
II
of the First Schedule to this Act or, subject to the next following section, in any manner specified in Part III of that Schedule, and may also from time to time vary any such investments.
2
The supplemental provisions contained in Part IV of that Schedule shall have effect for the interpretation and for restricting the operation of the said Parts I to III.
3
No provision relating to the powers of the trustee contained in any instrument (not being an enactment or an instrument made under an enactment) made before the passing of this Act shall limit the powers conferred by this section, but those powers are exercisable only in so far as a contrary intention is not expressed in any Act or instrument made under an enactment, whenever passed or made, and so relating or in any other instrument so relating which is made after the passing of this Act.
For the purposes of this subsection any rule of the law of Scotland whereby a testamentary writing may be deemed to be made on a date other than that on which it was actually executed shall be disregarded.
4
In this Act “
narrower-range investment
” means an investment falling within Part I or
II
of the First Schedule to this Act and “
wider-range investment
” means an investment falling within Part III of that Schedule.
C6C37F2 2 Restrictions on wider-range investment.
C7C8F126
1
A trustee shall not have power by virtue of the foregoing section to make or retain any wider-range investment unless the trust fund has been divided into two parts (hereinafter referred to as the narrower-range part and the wider-range part), the parts being, subject to the provisions of this Act, equal in value at the time of the division; and where such a division has been made no subsequent division of the same fund shall be made for the purposes of this section, and no property shall be transferred from one part of the fund to the other unless either—
a
the transfer is authorised or required by the following provisions of this Act, or
b
a compensating transfer is made at the same time.
In this section “
compensating transfer
”, in relation to any transferred property, means a transfer in the opposite direction of property of equal value.
2
Property belonging to the narrower-range part of a trust fund shall not by virtue of the foregoing section be invested except in narrower-range investments, and any property invested in any other manner which is or becomes comprised in that part of the trust fund shall either be transferred to the wider-range part of the fund, with a compensating transfer, or be reinvested in narrower-range investments as soon as may be.
3
Where any property accrues to a trust fund after the fund has been divided in pursuance of subsection (1) of this section, then—
a
if the property accrues to the trustee as owner or former owner of property comprised in either part of the fund, it shall be treated as belonging to that part of the fund;
C9
b
in any other case, the trustee shall secure, by apportionment of the accruing property or the transfer of property from one part of the fund to the other, or both, that the value of each part of the fund is increased by the same amount.
Where a trustee acquires property in consideration of a money payment the acquisition of the property shall be treated for the purposes of this section as investment and not as the accrual of property to the trust fund, notwithstanding that the amount of the consideration is less than the value of the property acquired; and paragraph (a) of this subsection shall not include the case of a dividend or interest becoming part of a trust fund.
4
Where in the exercise of any power or duty of a trustee property falls to be taken out of the trust fund, nothing in this section shall restrict his discretion as to the choice of property to be taken out.
C37F33 Relationship between Act and other powers of investment.
F1271
The powers conferred by section one of this Act are in addition to and not in derogation from any power conferred otherwise than by this Act of investment or postponing conversion exercisable by a trustee (hereinafter referred to as a “special power”).
2
Any special power (however expressed) to invest property in any investment for the time being authorised by law for the investment of trust property, being a power conferred on a trustee before the passing of this Act or conferred on him under any enactment passed before the passing of this Act, shall have effect as a power to invest property in like manner and subject to the like provisions as under the foregoing provisions of this Act.
3
In relation to property, including wider-range but not including narrower-range investments,—
a
which a trustee is authorised to hold apart from—
i
ii
any such power to invest in authorised investments as is mentioned in the foregoing subsection, or
b
which became part of a trust fund in consequence of the exercise by the trustee, as owner of property falling within this subsection, of any power conferred by subsection (3) or (4) of section ten of the Trustee Act, 1925, or paragraph (o) or (p) of subsection (1) of section four of the Trusts (Scotland) Act, 1921,
the foregoing section shall have effect subject to the modifications set out in the Second Schedule to this Act.
4
The foregoing subsection shall not apply where the powers of the trustee to invest or postpone conversion have been conferred or varied—
a
by an order of any court made within the period of ten years ending with the passing of this Act, or
b
by any enactment passed, or instrument having effect under an enactment made, within that period, being an enactment or instrument relating specifically to the trusts in question; or
c
by an enactment contained in a local Act of the present Session;
but the provisions of the Third Schedule to this Act shall have effect in a case falling within this subsection.
C374 Interpretation of references to trust property and trust funds.
1
In this Act “property” includes real or personal property of any description, including money and things in action;
Provided that it does not include an interest in expectancy, but the falling into possession of such an interest, or the receipt of proceeds of the sale thereof, shall be treated for the purposes of this Act as an accrual of property to the trust fund.
2
So much of the property in the hands of a trustee shall for the purposes of this Act constitute one trust fund as is held on trusts which (as respects the beneficiaries or their respective interests or the purposes of the trust or as respects the powers of the trustee) are not identical with those on which any other property in his hands is held.
C103
Where property is taken out of a trust fund by way of appropriation so as to form a separate fund, and at the time of the appropriation the trust fund had (as to the whole or a part thereof) been divided in pursuance of subsection (1) of section two of this Act, or that subsection as modified by the Second Schedule to this Act, then if the separate fund is so divided the narrower-range and wider-range parts of the separate fund may be constituted so as either to be equal, or to bear to each other the same proportion as the two corresponding parts of the fund out of which it was so appropriated (the values of those parts of those funds being ascertained as at the time of appropriation), or some intermediate proportion.
4
In the application of this section to Scotland the following subsection shall be substituted for subsection (1) thereof:—
1
In this Act “property” includes property of any description (whether heritable or moveable, corporeal or incorporeal) which is presently enjoyable, but does not include a future interest, whether vested or contingent.
C11C37F4 5 Certain valuations to be conclusive for purposes of division of trust fund.
F1281
If for the purposes of section two or four of this Act or the Second Schedule thereto a trustee obtains, from a person reasonably believed by the trustee to be qualified to make it, a valuation in writing of any property, the valuation shall be conclusive in determining whether the division of the trust fund in pursuance of subsection (1) of the said section two, or any transfer or apportionment of property under that section or the said Second Schedule, has been duly made.
2
The foregoing subsection applies to any such valuation notwithstanding that it is made by a person in the course of his employment as an officer or servant.
C12C37F5 6 Duty of trustees in choosing investments.
F1291
In the exercise of his powers of investment a trustee shall have regard—
a
to the need for diversification of investments of the trust, in so far as is appropriate to the circumstances of the trust;
b
to the suitability to the trust of investments of the description of investment proposed and of the investment proposed as an investment of that description.
2
Before exercising any power conferred by section one of this Act to invest in a manner specified in Part II or
III
of the First Schedule to this Act, or before investing in any such manner in the exercise of a power falling within subsection (2) of section three of this Act, a trustee shall obtain and consider proper advice on the question whether the investment is satisfactory having regard to the matters mentioned in paragraphs (a) and (b) of the foregoing subsection.
3
A trustee retaining any investment made in the exercise of such a power and in such a manner as aforesaid shall determine at what intervals the circumstances, and in particular the nature of the investment, make it desirable to obtain such advice as aforesaid, and shall obtain and consider such advice accordingly.
4
For the purposes of the two foregoing subsections, proper advice is the advice of a person who is reasonably believed by the trustee to be qualified by his ability in and practical experience of financial matters; and such advice may be given by a person notwithstanding that he gives it in the course of his employment as an officer or servant.
5
A trustee shall not be treated as having complied with subsection (2) or (3) of this section unless the advice was given or has been subsequently confirmed in writing.
6
Subsections (2) and (3) of this section shall not apply to one of two or more trustees where he is the person giving the advice required by this section to his co-trustee or co-trustees, and shall not apply where powers of a trustee are lawfully exercised by an officer or servant competent under subsection (4) of this section to give proper advice.
7
Without prejudice to section eight of the
M3
Trustee Act, 1925, or section thirty of the
M4
Trusts (Scotland) Act, 1921 (which relate to valuation, and the proportion of the value to be lent, where a trustee lends on the security of property) the advice required by this section shall not include, in the case of a loan on the security of freehold or leasehold property in England and Wales or Northern Ireland or on heritable security in Scotland, advice on the suitability of the particular loan.
7 Application of ss. 1–6 to persons, other than trustees, having trustee investment powers.
1
Where any persons, not being trustees, have a statutory power of making investments which is or includes power—
a
to make the like investments as are authorised by section one of the Trustee Act, 1925, or section ten of the Trusts (Scotland) Act, 1921, or
b
to make the like investments as trustees are for the time being by law authorised to make,
however the power is expressed, the foregoing provisions of this Act shall with the necessary modifications apply in relation to them as if they were trustees:
Provided that property belonging to a Consolidated Loans Fund or any other fund applicable wholly or partly for the redemption of debt shall not by virtue of the foregoing provisions of this Act be invested or held invested in any manner specified in paragraph 6 of Part II of the First Schedule to this Act or in wider-range investments.
2
Where, in the exercise of powers conferred by any enactment, an authority to which paragraph 9 of Part II of the First Schedule to this Act applies uses money belonging to any fund for a purpose for which the authority has power to borrow, the foregoing provisions of this Act, as applied by the foregoing subsection, shall apply as if there were comprised in the fund (in addition to the actual content thereof) property, being narrower-range investments, having a value equal to so much of the said money as for the time being has not been repaid to the fund, and accordingly any repayment of such money to the fund shall not be treated for the said purposes as the accrual of property to the fund:
Provided that nothing in this subsection shall be taken to require compliance with any of the provisions of section six of this Act in relation to the exercise of such powers as aforesaid.
3
In this section “Consolidated Loans Fund” means a fund established under section fifty-five of the M5Local Government Act, 1958, and includes a loans fund established under F6Schedule 3 to the M6Local Government (Scotland) Act 1975 and “statutory power” means a power conferred by an enactment passed before the passing of this Act or by any instrument made under any such enactment.
F78 Application of ss. 1–6 in special cases.
F1231
In relation to persons to whom this section applies—
a
notwithstanding anything in subsection (3) of section one of this Act, no provision of any enactment passed, or instrument having effect under an enactment and made, before the passing of this Act shall limit the powers conferred by the said section one;
b
subsection (1) of the foregoing section shall apply where the power of making investments therein mentioned is or includes a power to make some only of the investments mentioned in paragraph (a) or (b) of that subsection.
2
This section applies to—
a
the persons for the time being authorised to invest funds of the Duchy of Lancaster;
b
any persons specified in an order made by the Treasury by statutory instrument, being persons (whether trustees or not) whose power to make investments is conferred by or under any enactment contained in a local or private Act.
3
An order of the Treasury made under the foregoing subsection may provide that the provisions of sections one to six of this Act (other than the provisions of subsection (3) of section one) shall, in their application to any persons specified therein, have effect subject to such exceptions and modifications as may be specified.
F89 Supplementary provisions as to investments.
X21
In subsection (3) of section ten of the Trustee Act, 1925, before paragraph (c) (which enables trustees to concur in any scheme or arrangement for the amalgamation of a company in which they hold securities with another company, with power to accept securities in the second company) there shall be inserted the following paragraph :—
bb
for the acquisition of the securities of the company, or of control thereof, by another company
2
It is hereby declared that the power to subscribe for securities conferred by subsection (4) of the said section ten includes power to retain them for any period for which the trustee has power to retain the holding in respect of which the right to subscribe for the securities was offered, but subject to any conditions subject to which the trustee has that power.
10 Powers of Scottish trustees supplementary to powers of investment. X3
Section four of the Trusts (Scotland) Act, 1921 (which empowers trustees in trusts the execution of which is governed by the law in force in Scotland to do certain acts, where such acts are not at variance with the terms or purposes of the trust) shall have effect as if, in subsection (1) thereof, after paragraph (n), there were added the following paragraphs :—
o
to concur, in respect of any securities of a company (being securities comprised in the trust estate), in any scheme or arrangement—
i
for the reconstruction of the company,
ii
for the sale of all or any part of the property and undertaking of the company to another company,
iii
for the acquisition of the securities of the company, or of control thereof, by another company,
iv
for the amalgamation of the company with another company, or
v
for the release, modification, or variation of any rights, privileges or liabilities attached to the securities or any of them,
in like manner as if the trustees were entitled to such securities beneficially ; to accept any securities of any denomination or description of the reconstructed or purchasing or new company in lieu of, or in exchange for, all or any of the first mentioned securities; and to retain any securities so accepted as aforesaid for any period for which the trustees could have properly retained the original securities ;
p
to exercise, to such extent as the trustees think fit, any conditional or preferential right to subscribe for any securities in a company (being a right offered to them in respect of any holding in the company), to apply capital money of the trust estate in payment of the consideration, and to retain any such securities for which they have subscribed for any period for which they have the power to retain the holding in respect of which the right to subscribe for the securities was offered (but subject to any conditions subject to which they have that power); to renounce, to such extent as they think fit, any such right; or to assign, to such extent as they think fit and for the best consideration that can reasonably be obtained, the benefit of such right or the title thereto to any person, including any beneficiary under the trust.
11 Local Authority investment schemes. C13
1
Without prejudice to powers conferred by or under any other enactment, any authority to which this section applies may invest property held by the authority in accordance with a scheme submitted to the Treasury by an association of local authorities . . . F9 . . . F10 and approved by the Treasury as enabling investments to be made collectively without in substance extending the scope of powers of investment.
2
A scheme under this section may apply to a specified authority or to a specified class of authorities, may make different provisions as respects different authorities or different classes of authorities or as respects different descriptions of property or property held for different purposes, and may impose restrictions on the extent to which the power conferred by the foregoing subsection shall be exercisable.
3
In approving a scheme under this section, the Treasury may direct that F11the F12Financial Services and Markets Act 2000, shall not apply to dealings undertaken or documents issued for the purposes of the scheme, or to such dealings or documents of such descriptions as may be specified in the direction.
C144
The authorities to which this section applies are—
C15a
in England and Wales F13, the Greater London Authority,, the council of a county F14a county borough,, a . . . F10 borough . . . F15 a . . . F15 district or a F16parish, F17a river authority the CommonF16parish, the Common Council of the City of London F18, a functional body (within the meaning of the Greater London Authority Act 1999),F19the Broads AuthorityF20a National Park authorityF21, a F139 police and crime commissioner F133 . . . F22, . . . F23, a joint authority established by Part IV of the M7Local Government Act 1985F136 , F137 an economic prosperity board established under section 88 of the Local Democracy, Economic Development and Construction Act 2009, a combined authority established under section 103 of that ActF142...F9 . . . and the Council of the Isles of Scilly;
b
in Scotland, a local authority within the meaning of the M8Local Government (Scotland) Act, 1947;
c
in any part of Great Britain, a joint board or joint committee constituted to discharge or advise on the discharge of the functions of any two or more of the authorities mentioned in the foregoing paragraphs (including a joint committee established by F24those authorities acting in combination in accordance with regulations made under section 7 of the M9Superannuation Act 1972;
d
C16F27 12 Power to confer additional powers of investment.
F1301
Her Majesty may by Order in Council extend the powers of investment conferred by section one of this Act by adding to Part I, Part II or Part III of the First Schedule to this Act any manner of investment specified in the Order.
2
Any Order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.
C17F28 13 Power to modify provisions as to division of trust fund.
F1311
The Treasury may by order made by statutory instrument direct that, subject to subsection (3) of section four of this Act, any division of a trust fund made in pursuance of subsection (1) of section two of this Act during the continuance in force of the order shall be made so that the value of the wider-range part at the time of the division bears to the then value of the narrower-range part such proportion, greater than one but not greater than three to one, as may be prescribed by the order; and in this Act “
the prescribed proportion
” means the proportion for the time being prescribed under this subsection.
2
A fund which has been divided in pursuance of subsection (1) of section two of this Act before the coming into operation of an order under the foregoing subsection may notwithstanding anything in that subsection be again divided (once only) in pursuance of the said subsection (1) during the continuance in force of the order.
3
If an order is made under subsection (1) of this section, then as from the coming into operation of the order—
a
paragraph (b) of subsection (3) of section two of this Act and sub-paragraph (b) of paragraph 3 of the Second Schedule thereto shall have effect with the substitution, for the words from “each” to the end, of the words “the wider-range part of the fund is increased by an amount which bears the prescribed proportion to the amount by which the value of the narrower-range part of the fund is increased”;
b
subsection (3) of section four of this Act shall have effect as if for the words “so as either” to “each other” there were substituted the words “so as to bear to each other either the prescribed proportion or”.
4
An order under this section may be revoked by a subsequent order thereunder prescribing a greater proportion.
5
An order under this section shall not have effect unless approved by a resolution of each House of Parliament.
14 Amendment of s. 27 of Trusts (Scotland) Act 1921.
So much of section twenty-seven of the M12Trusts (Scotland) Act, 1921, as empowers the Court of Session to approve as investments for trust funds any stocks, funds or securities in addition to those in which trustees are by that Act authorised to invest trust funds shall cease to have effect.
F2915 Saving for powers of court.
F132The enlargement of the investment powers of trustees by this Act shall not lessen any power of a court to confer wider powers of investment on trustees, or affect the extent to which any such power is to be exercised.
16 Minor and consequential amendments and repeals.
F301
The provisions of the Fourth Schedule to this Act (which contain minor amendments and amendments consequential on the foregoing provisions of this Act) shall have effect.
2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F31
C1817 Short title, extent and construction.
1
This Act may be cited as the Trustee Investments Act, 1961.
F322
Section 11 of this Act extends to Northern Ireland, but, except as aforesaid and except so far as any other provisions of this Act apply by virtue of Northern Ireland legislation to trusts the execution of which is governed by the law of Northern Ireland, this Act does not apply to such trusts.
3
4
Except where the context otherwise requires, in this Act, in its application to trusts the execution of which is governed by the law in force in England and Wales, expressions have the same meaning as in the M13Trustee Act, 1925.
5
Except where the context otherwise requires, in this Act, in its application to trusts the execution of which is governed by the law in force in Scotland, expressions have the same meaning as in the Trusts (Scotland) Act, 1921.
SCHEDULES
C34C35FIRST SCHEDULE Manner of Investment
Sch. 1 extended (24.6.2003) by The Uncertificated Securities (Amendment) (Eligible Debt Securities) Regulations 2003 (S.I. 2003/1633), reg. 1(1), Sch. 2 para. 2(b)
Sch. 1 extended (24.6.2003) by The Uncertificated Securities (Amendment) (Eligible Debt Securities) Regulations 2003 (S.I. 2003/1633), reg. 1(1), Sch. 2 para. 8(2)(a)
Part I Narrower-Range Investments not Requiring Advice
1
In Defence Bonds, National Savings Certificates and Ulster Savings Certificates F35Ulster Development BondsF36National Development BondsF37British Savings BondsF38National Savings Income BondsF39National Savings Deposit BondsF40National Savings Indexed-Income Bonds.F41National Savings Capital BondsF42National Savings FIRST Option BondsF43National Savings Pensioners Guaranteed Income Bonds
2
Part II Narrower-Range Investments Requiring Advice
1
In securities issued by Her Majesty’s Government in the United Kingdom, the Government of Northern Ireland or the Government of the Isle of Man, not being securities falling within Part I of this Schedule and being fixed-interest securities registered in the United Kingdom or the Isle of Man, Treasury Bills or Tax Reserve Certificates F46or any variable interest securities issued by Her Majesty’s Government in the United Kingdom and registered in the United Kingdom.
2
In any securities the payment of interest on which is guaranteed by Her Majesty’s Government in the United Kingdom or the Government of Northern Ireland.
3
In fixed-interest securities issued in the United Kingdom by any public authority or nationalised industry or undertaking in the United Kingdom.
4
In fixed-interest securities issued in the United Kingdom by the government of any overseas territory within the Commonwealth or by any public or local authority within such a territory, being securities registered in the United Kingdom.
References in this paragraph to an overseas territory or to the government of such a territory shall be construed as if they occurred in the M15Overseas Service Act 1958.
F474A
In securities issued in the United Kingdom by the government of an overseas territory within the Commonwealth or by any public or local authority within such a territory, being securities registered in the United Kingdom and in respect of which the rate of interest is variable by reference to one or more of the following:—
a
the Bank of England’s minimum lending rate;
b
the average rate of discount on allotment on 91-day Treasury Bills;
c
a yield on 91-day Treasury Bills;
d
a London sterling inter-bank offered rate;
e
A London sterling certificate of deposit rate.
References in this paragraph to an overseas territory or to the government of such a territory shall be construed as if they occurred in the Overseas Service Act 1958.
5
In fixed-interest securities issued in the United Kingdom by F48the African Development Bank, the Asian Development Bank, the Caribbean Development Bank, F49 the European Bank for Reconstruction and Development,the International Finance Corporation, the International Monetary Fund or by the International Bank for Reconstruction and Development, being securities registered in the United Kingdom.
F50In fixed-interest securities issued in the United Kingdom by the Inter-American Development Bank.
F51In fixed-interest securities issued in the United Kingdom by F52the European Atomic Energy Community, the European Bank for Reconstruction and Development, the European Economic Community, the European Investment Bank or by the F138European Union, being securities registered in the United Kingdom.
F535A
In securities issued in the United Kingdom by
i
the International Bank for Reconstruction and Development or by the European Investment Bank or by the F138European Union, being securities registered in the United Kingdom; or
ii
the Inter-American Development Bank;
being securities in respect of which the rate of interest is variable by reference to one or more of the following:
a
the Bank of England’s minimum lending rate;
b
the average rate of discount on allotment on 91-day Treasury Bills;
c
a yield on 91-day Treasury Bills;
d
a London sterling inter-bank offered rate;
e
a London sterling certificate of deposit rate.
F545B
In securities issued in the United Kingdom by the African Development Bank, the Asian Development Bank, the Caribbean Development Bank, the European Atomic Energy Community, F55 the European Bank for Reconstruction and Development, the European Economic Community, the International Finance Corporation or by the International Monetary Fund, being securities registered in the United Kingdom and in respect of which the rate of interest is variable by reference to one or more of the following:—
a
The average rate of discount on allotment on 91-day Treasury Bills:
b
a yield on 91-day Treasury Bills;
c
a London sterling inter-bank offered rate;
d
a London sterling certificate of deposit rate.
6
In debentures issued in the United Kingdom by a company incorporated in the United Kingdom, being debentures registered in the United Kingdom.
7
In stock of the Bank of Ireland.
F56In Bank of Ireland 7 per cent Loan Stock 1986/91.
F578
In debentures issued by the Agricultural Mortgage Corporation Limited or the Scottish Agricultural Securities Corporation Limited.
C389
In loans to any authority to which this paragraph applies charged on all or any of the revenues of the authority or on a fund into which all or any of those revenues are payable, in any fixed-interest securities issued in the United Kingdom by any such authority for the purpose of borrowing money so charged, and in deposits with any such authority by way of temporary loan made on the giving of a receipt for the loan by the treasurer or other similar officer of the authority and on the giving of an undertaking by the authority that, if requested to charge the loan as aforesaid, it will either comply with the request or repay the loan.
This paragraph applies to the following authorities, that is to say—
a
any local authority in the United Kingdom;
F58aa
the Greater London Authority;
ab
any functional body, within the meaning of the Greater London Authority Act 1999;
b
any authority all the members of which are appointed or elected by one or more local authorities in the United Kingdom;
c
any authority the majority of the members of which are appointed or elected by one or more local authorities in the United Kingdom, being an authority which by virtue of any enactment has power to issue a precept to a local authority in England and Wales, or a requisition to a local authority in Scotland, or to the expenses of which, by virtue of any enactment, a local authority in the United Kingdom is or can be required to contribute;
F140d
a police and crime commissioner;
e
the Belfast City and District Water Commissioners;
F60f
the Great Ouse Water Authority.
F61g
any district council in Northern Ireland.
i
any residuary body established by section 57 of the M16 Local Government Act 1985.
F649A
In any securities issued in the United Kingdom by any authority to which paragraph 9 applies for the purpose of borrowing money charged on all or any of the revenues of the authority or on a fund into which all or any of these revenues are payable and being securities in respect of which the rate of interest is variable by reference to one or more of the following:
a
the Bank of England’s minimum lending rate;
b
the average rate of discount on allotment on 91-day Treasury Bills;
c
a yield on 91-day Treasury Bills;
d
a London sterling inter-bank offered rate;
e
a London sterling certificate of deposit rate.
C19C20F6510
In debentures or in the guaranteed or preference stock of any incorporated company, being statutory water undertakers within the meaning of the M17Water Act, 1945, or any corresponding enactment in force in Northern Ireland, and having during each of the ten years immediately preceding the calendar year in which the investment was made paid a dividend of not less than F66½ per cent on its ordinary shares.
F6710A
In any units of a gilt unit trust scheme. A gilt unit trust scheme is an authorised unit trust scheme, or a recognised scheme, the objective of which is—
a
to invest at least 90% of the property of the scheme in loan stock, bonds or other instruments creating indebtedness which—
i
are transferable; and
ii
are issued or guaranteed by the government of the United Kingdom or of any other country or territory, by a local authority in the United Kingdom or in a relevant state, or by an international organisation the members of which include the United Kingdom or a relevant state;
b
to invest the remainder of the property of the scheme in shares, debentures or other instruments creating or acknowledging indebtedness, certificates representing securities or units in a collective investment scheme.
Sub-paragraphs (a) and (b) must be read with—
- i
section 22 of the Financial Services and Markets Act 2000;
- ii
any relevant order under that section; and
- iii
Schedule 2 to that Act.
11
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F68
F6912
In deposits with a building society within the meaning of the M18Building Societies Act 1986.
13
In mortgages of freehold property in England and Wales or Northern Ireland and of leasehold property in those countries of which the unexpired term at the time of investment is not less than sixty years, and in loans on heritable security in Scotland.
14
In perpetual rent charges charged on land in England and Wales or Northern Ireland and fee-farm rents (not being rent-charges) issuing out of such land F141... .
F7015
In Certificates of Tax Deposit.
F7116
In fixed-interest or variable interest securities issued by the Government of a relevant state.
F7217
In any securities the payment of interest in which is guaranteed by the Government of a relevant state.
F7318
In fixed-interest securities issued in a relevant state by any public authority or nationalised industry or undertaking in any such state.
F7419
In fixed-interest or variable interest securities issued in a relevant state by the Government of any overseas territory within the Commonwealth or by any public or local authority within such a territory.
F75For this purpose—
a
“ overseas territory ” means any territory or country outside the United Kingdom, and
b
the reference to the government of any overseas territory includes a reference to a government constituted for two or more overseas territories, and to any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more such territories.
F7620
In fixed-interest or variable interest securities issued in a relevant state by—
a
the African Development Bank;
b
the Asian Development Bank;
c
the Caribbean Development Bank;
d
the International Finance Corporation;
e
the International Monetary Fund;
f
the International Bank for Reconstruction and Development;
g
the Inter-American Development Bank;
h
the European Atomic Energy Community;
i
the European Bank for Reconstruction and Development;
j
the European Economic Community;
k
the European Investment Bank; or
l
the European Coal or Steel Community.
F7721
In debentures issued in any relevant state by a company incorporated in that state.
F7822
In loans to any authority to which this paragraph applies secured on all or any of the revenues of the authority or on a fund into which all or any of those revenues are payable, in fixed-interest or variable interest securities issued in a relevant state by any such authority in that state for the purpose of borrowing money so secured, and in deposits with any authority to which this paragraph applies by way of temporary loan made on the giving of a receipt for the loan by the treasurer or other similar officer of the authority and on the giving of an undertaking by the authority that, if requested to charge the loan as aforesaid, it will either comply with the request or repay the loan. This paragraph applies to the following authorities, that is to say—
a
any local authority in a relevant state; or
b
any authority all the members of which are appointed or elected by one or more local authorities in any such state.
F7923
In deposits with a mutual investment society whose head office is located in a relevant state.
F8024
In loans secured on any interest in property in a relevant state which corresponds to an interest in property falling within paragraph 13 of this Part of this Schedule.
C21Part III Wider-Range Investments
Sch. 1 Pt. III excluded (N.I.) by Trustee (Amendment) Act (Northern Ireland) 1962 (c. 10), s. 2(1)
1
In any securities issued in the United Kingdom by a company incorporated in the United Kingdom, being securities registered in the United Kingdom and not being securities falling within Part II of this Schedule.
F812
In shares in a building society within the meaning of the M19Building Societies Act 1986.
F822A
In any shares in an open-ended investment company within the meaning of the open-ended Investment Companies Regulations 2001
F833
In any units of an authorised unit trust scheme F84. . ..
F854
In any securities issued in any relevant state by a company incorporated in that state or by any unincorporated body constituted under the law of that state, not being (in either case) securities falling within Part II of this Schedule or paragraph 6 of this Part of this Schedule.
F865
In shares in a mutual investment society whose head office is located in a relevant state.
F876
In any units of a recognised scheme which does not fall within Part 2 of this Schedule.
Part IV Supplemental
1
The securities mentioned in Parts I to III of this Schedule do not include any securities where the holder can be required to accept repayment of the principal, or the payment of any interest, otherwise than in sterling F88, in the currency of a relevant state or in the european currency unit (as defined in article 1 of Council Regulation no. 3180/78/EECM20).
2
The securities mentioned in paragraphs 1 to 8 of Part II, other than Treasury Bills or Tax Reserve Certificates, securities issued before the passing of this Act by the Government of the Isle of Man, securities falling within paragraph 4 of the said Part II issued before the passing of this Act or securities falling within paragraph 9 of that Part, and the securities mentioned in paragraph 1 of Part III of this Schedule, do not include—
a
b
shares or debenture stock not fully paid up (except shares or debenture stock which by the terms of issue are required to be fully paid up within nine months of the date of issue).
F922A
The securities mentioned in paragraphs 16 to 21 of Part II of this Schedule, other than securities traded on a relevant money market or securities falling within paragraph 22 of Part II of this Schedule, and the securities mentioned in paragraph 4 of Part III of this Schedule do not include—
a
securities the price for which is not quoted on a recognised investment exchange F93. . . or on an investment exchange which constitutes the principal or only market established in a relevant state on which securities admitted to official listing are dealt in or traded;
b
shares or debenture stock not fully paid up (except shares or debenture stock which by the terms of issue are required to be fully paid up within nine months of the date of issue or shares issued with no nominal value).
C223
The securities mentioned in paragraph 6 F94and 21 of Part II and paragraph 1 F94or 4 of Part III of this Schedule do not include—
a
shares or debentures of an incorporated company of which the total issued and paid up share capital is less than one million pounds;
F95ab
shares or debentures of an incorporated company of which the total issued and paid up share capital at any time on the business day before the investment is made is less than the equivalent of one million pounds in the currency of a relevant state (at the exchange rate prevailing in the United Kingdom at the close of business on the day before the investment is made);
C23C24C25C26C27C28C29C30C31b
shares or debentures of an incorporated company which has not in each of the five years immediately preceding the calendar year in which the investment is made paid a dividend on all the shares issued by the company, excluding any shares issued after the dividend was declared and any shares which by their terms of issue did not rank for the dividend for that year.
For the purposes of sub-paragraph (b) of this paragraph a company formed—
i
to take over the business of another company or other companies, or
ii
to acquire the securities of, or control of, another company or other companies,
or for either of those purposes and for other purposes shall be deemed to have paid a dividend as mentioned in that sub-paragraph in any year in which such a dividend has been paid by the other company or all the other companies, as the case may be.
F96For the purposes of sub-paragraph (b) of this paragraph in relation to investment in shares or debentures of a successor company within the meaning of the Electricity (Northern Ireland) Order 1992 the company shall be deemed to have paid a dividend as mentioned in that sub-paragraph—
- iii
in every year preceding the calendar year in which the transfer date within the meaning of Part III of that Order of 1992 falls (“the first investment year”) which is included in the relevant five years; and
- iv
in the first investment year, if that year is included in the relevant five years and that company does not in fact pay such a dividend in that year; and
“the relevant five years”means the five years immediately preceding the year in which the investment in question is made or propoosed to be made.
3A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F97
C364
In this Schedule, unless the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say—
“debenture” includes debenture stock and bonds, whether constituting a charge on assets or not, and loan stock or notes;
“enactment” includes an enactment of the Parliament of Northern Ireland;
“fixed-interest securities” means securities which under their terms of issue bear a fixed rate of interest;
“local authority” in relation to the United Kingdom, means any of the following authorities—
- a
in England and Wales, the council of a county, F98a county borough, a . . . F99 borough . . . F100, an urban or rural district or a parish, the Common Council of the City of London F101the Greater London Council and the Council of the Isles of Scilly;
- b
C32in Scotland, a local authority within the meaning of the M21Local Government (Scotland) Act, 1947;
- c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F102
- a
F103“mutual investment society” means a credit institution which operates on mutual principles and which is authorised by the appropriate supervisory authority of a relevant state;
“relevant money market” means a money market which is supervised by the central bank or a government agency of a relevant state;
“relevant state” means Austria, Finland, Iceland, F104Liechtenstein,Norway, Sweden or a member state other than the United Kingdom;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F105
“securities” includes shares, debentures F106units within paragraph 3 F107or 6 of Part III of this Schedule, Treasury Bills and Tax Reserve Certificates;
“share” includes stock;
“Treasury Bills” includes . . . F108 bills issued by Her Majesty’s Government in the United Kingdom and Northern Ireland Treasury Bills.
F1124A
In this Schedule—
“authorised unit trust scheme” and “recognised scheme” have the meaning given by section 237(3) of the Financial Services and Markets Act 2000;
“collective investment scheme” has the meaning given by section 235 of that Act; and
“recognised investment exchange” has the meaning given by section 285 of that Act.
5
It is hereby declared that in this Schedule “mortgage”, in relation to freehold or leasehold property in Northern Ireland, includes a registered charge which, by virtue of subsection (4) of section forty of the M22Local Registration of Title (Ireland) Act 1891, or any other enactment, operates as a mortgage by deed.
6
F109In relation to the United Kingdom, references in this Schedule to an incorporated company are references to a company incorporated by or under any enactment and include references to a body of persons established for the purpose of trading for profit and incorporated by Royal Charter.
F1106A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F111
F119F121SECOND SCHEDULE Modification of s. 2 in relation to property falling within s. 3(3)
Sch. 2 repealed (with saving) (E.W.) (1.2.2001) by 2000 c. 29, s. 40(1)(3), Sch. 2 Pt. I para. 1(2), Sch. 4 Pt. I (with s. 35); S.I. 2001/49, art. 2
Sch. 2 repealed (with saving) (S.) (1.1.2006) by Charities and Trustee Investment (Scotland) Act 2005 (asp 10), s. 107(2), Sch. 3 para. 4(3); S.S.I. 2005/644, art. 2(1), Sch. 1
1
In this Schedule “
special-range property
” means property falling within subsection (3) of section three of this Act.
2
1
Where a trust fund includes special-range property, subsection (1) of section two of this Act shall have effect as if references to the trust fund were references to so much thereof as does not consist of special-range property, and the special-range property shall be carried to a separate part of the fund.
2
Any property which—
a
being property belonging to the narrower-range or wider-range part of a trust fund, is converted into special-range property, or
b
being special-range property, accrues to a trust fund after the division of the fund or part thereof in pursuance of subsection (1) of section two of this Act or of that subsection as modified by sub-paragraph (1) of this paragraph,
shall be carried to such a separate part of the fund as aforesaid; and subsections (2) and (3) of the said section two shall have effect subject to this sub-paragraph.
3
Where property carried to such a separate part as aforesaid is converted into property other than special-range property,—
a
it shall be transferred to the narrower-range part of the fund or the wider-range part of the fund or apportioned between them, and
C33b
any transfer of property from one of those parts to the other shall be made which is necessary to secure that the value of each of those parts of the fund is increased by the same amount.
F120F122THIRD SCHEDULE Provisions Supplementary to s. 3(4)
Sch. 3 repealed (with savings) (E.W.) (1.2.2001) by 2000 c. 29, s. 40(1)(3), Sch. 2 Pt. I para. 1(2), Sch. 4 Pt. I (with s. 35); S.I. 2001/49, art. 2
Sch. 3 repealed (with savings) (S.) (1.1.2006) by Charities and Trustee Investment (Scotland) Act 2005 (asp 10), s. 107(2), Sch. 3 para. 4(3); S.S.I. 2005/644, art. 2(1), Sch. 1
1
Where in a case falling within subsection (4) of section three of this Act, property belonging to the narrower-range part of a trust fund—
a
is invested otherwise than in a narrower-range investment, or
b
being so invested, is retained and not transferred or as soon as may be reinvested as mentioned in subsection (2) of section two of this Act,
then, so long as the property continues so invested and comprised in the narrower-range part of the fund, section one of this Act shall not authorise the making or retention of any wider-range investment.
2
Section four of the M23Trustee Act, 1925, or section thirty-three of the M24Trusts (Scotland) Act, 1921 (which relieve a trustee from liability for retaining an investment which has ceased to be authorised), shall not apply where an investment ceases to be authorised in consequence of the foregoing paragraph.
FOURTH SCHEDULE Minor and Consequential Amendments
1
F1131
References in the Trustee Act, 1925, except in subsection (2) of section sixty-nine of that Act, to section one of that Act or to provisions which include that section shall be construed respectively as references to section one of this Act and as including references to section one of this Act.
2
F124References in the Trusts (Scotland) Act, 1921, to section ten or eleven of that Act, or to provisions which include either of those sections, shall be construed respectively as references to section one of this Act and as including references to that section.
2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F114
F1163
The following enactments and instruments, that is to say—
a
subsection (3) of section seventy-four of the Third Schedule to the M25Water Act, 1945, and any order made under that Act applying the provisions of that subsection;
b
any local and personal Act which, or any order or other instrument in the nature of any such Act which, modifies paragraph (l) of subsection (1) of section one of the Trustee Act, 1925,
shall have effect as if any reference to the said paragraph (l) there were substituted a reference to paragraph 10 of Part II of the First Schedule to this Act.
4
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F115
F1176
For the reference in subsection (2) of section one of the M26House Purchase and Housing Act, 1959, to paragraph (a) of subsection (1) of that section there shall be substituted a reference to paragraph 12 of Part II and paragraph 2 of Part III of the First Schedule to this Act.
FIFTH SCHEDULE . . . F118
Sch. 5 repealed by Statute Law (Repeals) Act 1974 (c. 22), s. 1, Sch. Pt. XI
Act wholly in force at Royal Assent.