Chapter

Investment

Gary Watt

in Equity & Trusts Law Directions

Fifth edition

Published on behalf of © Gary Watt 2016

Published in print April 2016 | ISBN: 9780198747628
Published online September 2016 | e-ISBN: 9780191810596 | DOI: https://dx.doi.org/10.1093/he/9780198747628.003.0014

Series: Directions series

Investment

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Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams, and exercises help readers to engage fully with each subject and check their understanding as they progress. Part II of the Trustee Act 2000 gives every trustee the power to make any kind of investment as long as he is absolutely entitled to the assets of the trust, a power that permits trustees to hold investments jointly or in common with other persons. There are no unauthorised types of investment, but it is important to know whether the type of investment chosen was appropriate to the trust on the basis of the ‘standard investment criteria’. This chapter examines the types of investment permitted by the general law, a breach of the duty to invest with appropriate care, the significance of modern portfolio theory to trustee investments, and the impact of the Trustee Act 2000 upon trustee investments. It also looks at the historical need for income production and discusses capital gains as investment returns, the standard investment criteria, the need for trustees to obtain and consider proper advice about investments, particular types of investment, and investment policy.

Keywords: investment; Trustee Act 2000; trust; standard investment criteria; modern portfolio theory; income; capital gains

Chapter.  12443 words.  Illustrated.

Subjects: Trusts Law

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