A quick blog here.
It relates to the Trusts and Succession (Scotland) Bill and sport. The Bill introduces to Scotland the concept of the ‘private purpose trust‘. A private purpose trust is novel in Scotland. It removes the need to have human being beneficiaries of a trust. Once the Bill is passed, a trust will be able to have a purpose as its guiding aim. That had been possible for charities and other public aims, but not for purposes that did not meet the requirements of being charitable or public.
In some cases the need to define the beneficiaries by reference to individuals or groups of individuals can make trusts quite unwieldy. The purpose to be furthered is then shoe-horned into a form that can be expressed through the individual beneficiaries. That can dilute the purpose to be pursued. It can be complex. It can make tax considerations difficult and counterinitiative too.
We have seen this issue crop in a number of areas. But one area that it strikes us it could help is the involvement of fans in football ownership and governance. Now, as always, those embarking on any project must consider the range of legal entities (i.e. looking beyond trusts) that can be used. We will however not do that here. Instead, for those who have trusts in existence or where a trust does indeed fit the bill, this new form of Scottish trust should be considered. The ability to express the trust’s reason to be though a purpose could work very well in situations such as fan involvement where the success, stewardship, heritage and spirit of a club is the object. And work well where trying to build such concepts into a particular set of individuals as beneficiaries might be difficult or even ultimately miss the point trying to be achieved.
Trusts can be very useful things. Sometimes when non-trusts are being used they are designed to mimic the characteristics of a trust. But trust law has had some quirks that could get in the way. The introduction of the private purpose trust is a positive one. It helps enable the trust to truly be a fit for purpose legal vehicle in situations where it previously might not have worked quite as neatly as one would have hoped.
For help and advice on trusts, get in touch with Alan Eccles: alaneccles@bkf.co.uk / 07470808717.
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Scottish charity and wealth law 