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The Variation of Trusts Act 1958 (6 & 7 Eliz. 2. c. 53) is an Act of the Parliament of the United Kingdom that governs the courts' ability to vary the terms of trust documents. Prior to the 1950s, the courts were willing to approve "compromise" agreements as to what terms meant, not only when they were disputed but also for the benefit of certain parties, such as minors. In 1954, the House of Lords decided in Chapman v Chapman that this would no longer be permitted, creating a gap between the rights of trusts under the Settled Land Act 1925 (which could be altered if there was a flaw) and those trusts that were not (which were affected by the Chapman decision). As a result, following a report by the Law Reform Committee, Petre Crowder introduced the Variation of Trusts Bill to Parliament, where it was given royal assent on 23 July 1958, and came into force as the Variation of Trusts Act 1958.

The Act gave the courts near-unlimited discretion to approve "compromise" agreements, for the benefit of infants or other incapable individuals, for individuals who may become beneficiaries, or for unborn beneficiaries. The courts are also able to approve agreements for individuals who may be beneficiaries under protective trusts, with no requirement that the alterations be for their benefit. The courts have interpreted the Act's scope fairly widely, stating that almost any "variation" is acceptable, and that "benefit" may mean not just a financial benefit, but also a social or moral one. Despite initial fears that it would allow tax planners another way to hide funds and create a back-and-forth fight between the Chancery Division and Parliament, the Act was met with general approval. The ability of the courts to alter trustees' investment powers under the Act was criticised as slow and expensive, and as a result this is now covered by the Trustee Investments Act 1961. (Full article...)