Recognition of Trusts Act 1987
| Act of Parliament | |
 | |
| Long title | An Act to enable the United Kingdom to ratify the Convention on the law applicable to trusts and on their recognition which was signed on behalf of the United Kingdom on 10th January 1986. |
|---|---|
| Citation | 1987 c. 14 |
| Dates | |
| Royal assent | 9 April 1987 |
Status: Current legislation | |
| Text of the Recognition of Trusts Act 1987 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk. | |
The Recognition of Trusts Act 1987 was enacted in the UK as an UK Act of Parliament to ensure trusts are consistently recognized across borders. The Act implemented the Hague Trust Convention, which enables UK courts to handle trusts with international elements, improving clarity for cross-border asset management.
Background and Purpose
[edit]The Act aligns UK law with international standards, reducing barriers and simplifying trust recognition in international cases. It provides a structured approach, allowing the UK to handle trusts more predictably in cross-border legal contexts.
Contents
[edit]The Act is divided into several sections:
- Section 1: Definitions and Scope
- Section 2: Conditions for Trust Recognition
- Section 3: Governing Law for Recognized Trusts
- Section 4: Trustee and Beneficiary Duties and Rights
- Section 5: Enforcement Mechanisms
- Section 6: Conflict Resolution and Dispute Provisions
- Section 7: Miscellaneous Provisions and Limitations
Key Provisions
[edit]- Trust Recognition: The Act mandates formal recognition of trusts with defined trustees, beneficiaries, and assets.
- Trustee Duties: Trustees must act responsibly and prioritize beneficiary interests.
- Beneficiary Rights: Beneficiaries are granted rights to trust information and enforcement avenues.[1]
- Conflict Resolution: Provides alternative dispute resolution options to streamline trust management.
Scrutiny and Impact
[edit]Legal analysts have critiqued the Act, noting its potential to facilitate tax avoidance by enabling easier transfer of funds to offshore tax havens. This scrutiny centers on its role in potentially sheltering assets from tax liabilities. Nonetheless, the Act has garnered support for its standardization of trust recognition across jurisdictions, aiding in the management of multinational trusts.
References
[edit]- ^ "Trusts of Land". Law Commission. Retrieved 29 October 2024.