6 Questions
In which of the following circumstances is it permissible for a trustee to make a profit out of their role as trustee?
If the profit is either permitted by the terms of the trust or fully informed consent is provided by all the beneficiaries.
Two trustees, A and B, hold a trust fund on trust for C, who is 12 years old. The trust fund includes a house which is currently unoccupied and not producing any rental income for the trust. A and B have decided to sell the house. A would like to buy it. The trust deed does not contain any provisions authorising trustees to purchase trust property.
Which of the following is the most appropriate advice to A?
A cannot buy the house.
A trust has two trustees, A and B. The beneficiaries are minors. The trustees require legal advice on a tax issue which has arisen in relation to the trust. A is a partner at a law firm so B suggests that there is no need to obtain advice. A specialises in real estate and is not confident in providing tax advice so suggests instructing a tax partner at their firm.
What is the best advice to the trustees?
The trustees should obtain advice from a different firm because A has a personal interest in this firm so it would be a breach of fiduciary duty to instruct them.
In breach of trust, a trustee misapplies £100,000 of the trust fund. A solicitor dishonestly helps the trustee to misapply the money and move it offshore. Later, an accountant dishonestly helps the trustee to falsify the trust accounts.
Which one of the following statements is correct?
Both the accountant and the solicitor are liable as dishonest assistants.
True or false: For the purposes of dishonest assistance claims, the standard of dishonesty is objective.
True
A company director commits a breach of fiduciary duty. The director is dishonestly assisted by an accountant. The breach causes the company a significant loss. The accountant makes a substantial profit as a result of the director’s breach.
Which one of the following statements is correct?
The accountant is liable for the profit if his participation in the breach was the real or effective cause of the profit.
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