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- An Act to amend the law relating to trustees and persons having the investment powers of trustees; and for connected purposes.
www.legislation.gov.uk/ukpga/2000/29/contents
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An Act to amend the law relating to trustees and persons having the investment powers of trustees; and for connected purposes.
- Introductory Text
Introductory Text - Trustee Act 2000 - Legislation.gov.uk
- Explanatory Notes
Explanatory Notes - Trustee Act 2000 - Legislation.gov.uk
- The Duty of Care
(1) Whenever the duty under this subsection applies to a...
- Standard Investment Criteria
(1) In exercising any power of investment, whether arising...
- Schedule 1
Agents, nominees and custodians E+W. 3 (1) The duty of care...
- General Power of Investment
(1) Subject to the provisions of this Part, a trustee may...
- Advice
(1) Before exercising any power of investment, whether...
- Power to Employ Agents
(1) Subject to the provisions of this Part, the trustees of...
- Introductory Text
- 1. About this guidance
- 2. Trustees’ duties at a glance
- 3. Who can be a trustee and how trustees are appointed
- 4. Ensure your charity is carrying out its purposes for the public benefit
- 5. Comply with your charity’s governing document and the law
- 6. Act in your charity’s best interests
- 7. Manage your charity’s resources responsibly
- 8. Act with reasonable care and skill
- 9. Ensure your charity is accountable
This guidance explains the key duties of all trustees of charities in England and Wales, and what trustees need to do to carry out these duties competently.
Trustees have independent control over, and legal responsibility for, a charity’s management and administration. They play a very important role, almost always unpaid, in a sector that contributes significantly to the character and wellbeing of the country.
Trusteeship can be rewarding for many reasons - from a sense of making a difference to the charitable cause, to new experiences and relationships. It’s also likely to be demanding of your time, skills, knowledge and abilities. Being aware of the duties and responsibilities covered in this guidance will help you carry out your role in a way that not only serves your charity well but also gives you confidence that you will be complying with key requirements of the law.
You should read this guidance if you are a trustee of any charity based in England or Wales, including:
•a registered charity
•a charity that is not required by law to register
2.1 Before you start - make sure you are eligible to be a charity trustee
You must be at least 16 years old to be a trustee of a charity that is a company or a charitable incorporated organisation (CIO), or at least 18 to be a trustee of any other charity. You must be properly appointed following the procedures and any restrictions in the charity’s governing document. You must not act as a trustee if you are disqualified, unless authorised to do so by a waiver from the Commission. The reasons for disqualification are shown in the disqualifying reasons table and include: being bankrupt (undischarged) or having an individual voluntary arrangement (IVA) having an unspent conviction for certain offences (including any that involve dishonesty or deception) being on the sex offenders’ register You can read the automatic disqualification guidance for charities which explains the disqualification rules in more detail. There are further restrictions for charities that work with children or adults at risk. See section 3 for more information. Ensure your charity is carrying out its purposes for the public benefit You and your co-trustees must make sure that the charity is carrying out the purposes for which it is set up, and no other purpose. This means you should: ensure you understand the charity’s purposes as set out in its governing document plan what your charity will do, and what you want it to achieve be able to explain how all of the charity’s activities are intended to further or support its purposes understand how the charity benefits the public by carrying out its purposes Spending charity funds on the wrong purposes is a very serious matter; in some cases trustees may have to reimburse the charity personally. See section 4 for more information.
2.2 Comply with your charity’s governing document and the law
You and your co-trustees must: make sure that the charity complies with its governing document comply with charity law requirements and other laws that apply to your charity You should take reasonable steps to find out about legal requirements, for example by reading relevant guidance or taking appropriate advice when you need to. See section 5 for more information.
2.3 Act in your charity’s best interests
You must: do what you and your co-trustees (and no one else) decide will best enable the charity to carry out its purposes with your co-trustees, make balanced and adequately informed decisions, thinking about the long term as well as the short term avoid putting yourself in a position where your duty to your charity conflicts with your personal interests or loyalty to any other person or body not receive any benefit from the charity unless it is properly authorised and is clearly in the charity’s interests; this also includes anyone who is financially connected to you, such as a partner, dependent child or business partner See section 6 for more information.
You must make sure you are allowed to be a trustee:
•there are some restrictions on who can be a trustee – there are minimum age limits and some factors that automatically disqualify people from being trustees
•you must be properly appointed, and should know how long your appointment lasts
•if you are not properly appointed, the trustees’ decisions or actions may be invalid, potentially creating disputes or putting charity assets at risk
You and your co-trustees must make sure that everything your charity does helps (or is intended to help) to achieve the purposes for which it is set up, and no other purpose. This means you should:
•ensure you understand the charity’s purposes as set out in its governing document
•plan what your charity will do, and what you want it to achieve
•be able to explain how all of the charity’s activities are intended to further or support its purposes
•understand how the charity benefits the public by carrying out its purposes
Spending charity funds on the wrong purposes is a very serious matter; in some cases trustees may have to reimburse the charity personally.
You and your co-trustees must:
•make sure that the charity complies with its governing document
•comply with charity law requirements and other laws that apply to your charity
You should take reasonable steps to find out about legal requirements, for example by reading relevant guidance or taking appropriate advice when you need to.
You must:
•do what you and your co-trustees (and no one else) decide will best enable the charity to carry out its purposes
•with your co-trustees, make balanced and adequately informed decisions, thinking about the long term as well as the short term
•avoid putting yourself in a position where your duty to your charity conflicts with your personal interests or loyalty to any other person or body
You must act responsibly, reasonably and honestly. This is sometimes called the duty of prudence. Prudence is about exercising sound judgement. You and your co-trustees must:
•make sure the charity’s assets are only used to support or carry out its purposes
•avoid exposing the charity’s assets, beneficiaries or reputation to undue risk
•not over-commit the charity
•take special care when investing or borrowing
•comply with any restrictions on spending funds or selling land
As someone responsible for governing a charity, you:
•must use reasonable care and skill, making use of your skills and experience and taking advice when necessary
•should give enough time, thought and energy to your role, for example by preparing for, attending and actively participating in all trustees’ meetings
This is sometimes called the duty of care.
You and your co-trustees must comply with statutory accounting and reporting requirements. You should also:
•be able to demonstrate that your charity is complying with the law, well run and effective
•ensure appropriate accountability to members, if your charity has a membership separate from the trustees
•ensure accountability within the charity, particularly where you delegate responsibility for particular tasks or decisions to staff or volunteers
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