Trustee Bill - continued        House of Lords

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  PART VI
  MISCELLANEOUS AND SUPPLEMENTARY
Power to insure.     34. - (1) For section 19 of the Trustee Act 1925 (power to insure) substitute-
 
 
"Power to insure.     19. - (1) A trustee may-
 
    (a) insure any property which is subject to the trust against risks of loss or damage due to any event, and
 
    (b) pay the premiums out of the trust funds.
      (2) In the case of property held on a bare trust, the power to insure is subject to any direction given by the beneficiary or each of the beneficiaries-
 
 
    (a) that any property specified in the direction is not to be insured;
 
    (b) that any property specified in the direction is not to be insured except on such conditions as may be so specified.
      (3) Property is held on a bare trust if it is held on trust for-
 
 
    (a) a beneficiary who is of full age and capacity and absolutely entitled to the property subject to the trust, or
 
    (b) beneficiaries each of whom is of full age and capacity and who (taken together) are absolutely entitled to the property subject to the trust.
      (4) If a direction under subsection (2) of this section is given, the power to insure, so far as it is subject to the direction, ceases to be a delegable function for the purposes of section 11 of the Trustee Act 2000 (power to employ agents).
 
      (5) In this section "trust funds" means any income or capital funds of the trust."
 
      (2) In section 20(1) of the Trustee Act 1925 (application of insurance money) omit "whether by fire or otherwise".
 
      (3) The amendments made by this section apply in relation to trusts whether created before or after its commencement.
 
Personal representatives.     35. - (1) Subject to the following provisions of this section, this Act applies in relation to a personal representative administering an estate according to the law as it applies to a trustee carrying out a trust for beneficiaries.
 
      (2) For this purpose this Act is to be read with the appropriate modifications and in particular-
 
 
    (a) references to the trust instrument are to be read as references to the will,
 
    (b) references to a beneficiary or to beneficiaries, apart from the reference to a beneficiary in section 8(1)(b), are to be read as references to a person or the persons interested in the due administration of the estate, and
 
    (c) the reference to a beneficiary in section 8(1)(b) is to be read as a reference to a person who under the will of the deceased or under the law relating to intestacy is beneficially interested in the estate.
      (3) Remuneration to which a personal representative is entitled under section 28 or 29 is to be treated as an administration expense for the purposes of-
 
 
    (a) section 34(3) of the Administration of Estates Act 1925 (order in which estate to be paid out), and
 
    (b) any provision giving reasonable administration expenses priority over the preferential debts listed in Schedule 6 to the Insolvency Act 1986.
      (4) Nothing in subsection (3) is to be treated as affecting the operation of the provisions mentioned in paragraphs (a) and (b) of that subsection in relation to any death occurring before the commencement of this section.
 
Pension schemes.     36. - (1) In this section "pension scheme" means an occupational pension scheme (within the meaning of the Pension Schemes Act 1993) established under a trust and subject to the law of England and Wales.
 
      (2) Part I does not apply in so far as it imposes a duty of care in relation to-
 
 
    (a) the functions described in paragraphs 1 and 2 of Schedule 1, or
 
    (b) the functions described in paragraph 3 of that Schedule to the extent that they relate to trustees-
 
      (i) authorising a person to exercise their functions with respect to investment, or
 
      (ii) appointing a person to act as their nominee or custodian.
      (3) Nothing in Part II or III applies to the trustees of any pension scheme.
 
      (4) Part IV applies to the trustees of a pension scheme subject to the restrictions in subsections (5) to (8).
 
      (5) The trustees of a pension scheme may not under Part IV authorise any person to exercise any functions relating to investment as their agent.
 
      (6) The trustees of a pension scheme may not under Part IV authorise a person who is-
 
 
    (a) an employer in relation to the scheme, or
 
    (b) connected with or an associate of such an employer,
  to exercise any of their functions as their agent.
 
      (7) For the purposes of subsection (6)-
 
 
    (a) "employer", in relation to a scheme, has the same meaning as in the Pensions Act 1995;
 
    (b) sections 249 and 435 of the Insolvency Act 1986 apply for the purpose of determining whether a person is connected with or an associate of an employer.
      (8) Sections 16 to 20 (powers to appoint nominees and custodians) do not apply to the trustees of a pension scheme.
 
Authorised unit trusts.     37. - (1) Parts II to IV do not apply to trustees of authorised unit trusts.
 
      (2) "Authorised unit trust" means a unit trust scheme in the case of which an order under section 78 of the Financial Services Act 1986 is in force.
 
Common investment schemes for charities etc.     38. Parts II to IV do not apply to-
 
 
    (a) trustees managing a fund under a common investment scheme made under section 24 of the Charities Act 1993, or
 
    (b) trustees managing a fund under a common deposit scheme made under section 25 of that Act.
 
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