Trustee Investments Act 1961

[F1 2 Restrictions on wider-range investment. U.K.

[F2 ( 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;

( 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.]]

Textual Amendments

F1 S. 2 repealed (with saving) (E.W.) (1.2.2001) by 2000 c. 29, s. 40(1)(3), Sch. 2 Pt. I para. 1(1), Sch. 4 Pt. I (with s. 35); S.I. 2001/49, art. 2

F2 S. 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(2); S.S.I. 2005/644, art. 2(1), Sch. 1

Modifications etc. (not altering text)

C1 S. 2 applied (E.W.S.) (11.2.1997) by S.I. 1997/266, art. 10(4)

C2 Ss. 1-6 applied (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), ss. 27(2)(c), 154 (with Sch. 5)

C3 Power to modify s. 2(1) conferred (1.9.1992) by Charities Act 1992 (c. 41), s. 38(1)(2); S.I. 1992/1900, art. 2(1), Sch. 1

Power to modify s. 2(1) conferred (E.S.W.) (1.8.1993) by 1993 c. 10, ss. 70(1)(a), 99(1).

C4 S. 2(1) excluded (1.9.1992) by Charities Act 1992 (c. 41), s. 38(2); S.I. 1992/1900, art. 2(1), Sch. 1

S. 2(1) excluded (E.W.S.) (1.8.1993) by 1993 c.10, ss. 70(2), 99(1).

S. 2 applied (with modifications) (E.W.S.) (7.2.1995) by S.I. 1995/356, art. 10(4)

C5 S. 2(3)(b) modified (E.W.S.) (25.4.1995) by S.I. 1995/1092, art. 3(2)