Seòmar agus comataidhean

Excellent. I will stop there.

What about informal involvement?

Thank you very much. That is helpful.

We heard evidence last week that you need technical and scientific expertise to be able to advise the Scottish and UK bodies. Are there enough people out there to give that advice?

Thank you. Ms Kenyon, do you want to come in on this one?

I am not moving amendment 50.

I am not moving the amendment.

I welcome the minister’s amendment 42. It is interesting how difficult it has been for both the Scottish Government and this committee to find the appropriate information. Amendment 42 future proofs the bill. Both the Court of Session and the Sheriff Court are always evolving, as is practice. I welcome amendment 42 so that, if things change in the future, that power is there for the Scottish Government to exercise with the consent of the Lord President.

I welcome amendment 42 and press amendment 60 in my name.

With regard to amendment 54, again, it is interesting that, during the evidence session, there was sometimes a conflict between those with an academic background in trust law and those who practise it day in, day out. The Law Society of Scotland helped me to draft amendment 54, and I think that it reflects what practitioners are looking for with regard to day-to-day working. Amendment 54 would extend the effect of protective clauses in the trust deed to all actions and decisions of the trustees and give them that protection.

A trust deed may contain a provision purporting to limit liability or indemnity for breach of a fiduciary duty. That is most likely to be relevant where a trustee is also a beneficiary, and where a trustee’s fiduciary duty would be likely to put their personal interests in conflict with their duty as a trustee. That is often expressly permitted, sometimes with qualifications, in a trust deed. It seems that such protection will continue to be effective because of section 30(2). However, such protection is usually seen to apply more widely than transactions, and it might be more appropriate to allow protective clauses to extend to all actions or decisions of the trustees. That will give greater scope for trustees. As we know, it is sometimes proving more and more difficult to find trustees to do the job, so I hope that such protections will encourage more trustees to come forward.

I am grateful to the minister for her support of amendment 55, which would allow the court to determine that the trust property should bear none of the damages, where that is appropriate.

I am grateful to the minister for accepting amendment 56 and I am certainly happy to work with her if there needs to be some tidying up at stage 3. Amendment 56 is simply a clarification of the provisions on the validity of certain transactions that are entered into by a trustee and extends to transactions in the exercise of powers in the trust deed, as well as those powers that are implied by sections 13(1) and 16(1).

I am happy to support the minister’s other amendments in the group.

Amendment 57 deals with section 41. The amendment would bring within the scope of the section existing trusts where the truster has expressly provided for anticipated changes in the law on trust deeds. The reason for lodging the amendment is that changes to the law on accumulation periods have been anticipated for some time. Granters of existing trusts might have expressly provided for such changes in the trust deed and should be able to benefit from the new provisions.

The effect of amendment 58, if it is agreed to, would be to bring charitable trusts within the scope of section 41, but restrictions would be retained on the accumulation of income for public trusts that are not charitable trusts. The bill as introduced excludes public trusts that are charitable trusts from the abolishment of restrictions on the accumulation of income. As such, charitable trusts will remain subject to the existing rules on accumulation of income. In my view, that is not appropriate, and the scope of the section should be extended to include charitable trusts.

Trustees of charitable trusts are, under charity and tax law, subject to other rights and duties to manage funds appropriately, and they are subject to oversight by the Office of the Scottish Charity Regulator and His Majesty’s Revenue and Customs. Those rights and duties apply to all charities, whatever their legal form, and they empower OSCR and HMRC to control inappropriate accumulation of income by charities without reference to the expressed restrictions on that accumulation in trust law, which apply only to charities that are constituted as trusts.

There might be reasons that are consistent with a charitable trust’s purpose for income to be accumulated—for example, to generate funds for the next cycle of charity work or for a specific project—and retention of the prohibition of accumulation of income for charitable trusts might inhibit appropriate accumulation and would have little practical purpose when inappropriate accumulation is sufficiently controlled by charity and tax law.

Removal of the existing trust law restrictions on accumulation would bring trusts into line with other legal forms that are available for constitutional charities, whereas retention of the restrictions might make trusts less attractive as a vehicle for constituting charitable work in circumstances in which a trust would otherwise be the most appropriate form.

Non-charitable public trusts are not subject to the same charity and tax law controls as charitable trusts, and there is a case for retaining the existing trust law restrictions on accumulation by public trusts that are not charities. That would guard against excessive long-term accumulation in non-charitable public trusts that are set up to pursue schemes that might take decades to materialise. I think that the amendments will bring clarity.

I move amendment 57.