Scottish Trusts are Different

By Ian Macdonald, Wright, Johnston & Mackenzie LLP

As Scotland and England are part of the same island and have shared a Parliament for nearly 300 years (from 1707 till the Scottish Parliament was established to deal with some legal and policy matters in 1999), you might assume that the law in the two countries on most matters is the same. Nothing could be further from the truth, particularly in the area of trusts.

Scotland has always had its own legal system which derives from civil law, whereas England follows common law principles. Three hundred years of making and interpreting law together (not to mention tax), have gradually brought the principles and effect of Scottish trust law closer to the English, but fundamental differences remain.

Much English terminology has been incorporated in Scottish practice, although the statutory rules governing trusts in the two countries remain separate. The main difference of principle is that English trusts rely on concurrent ownership of the trust assets by the trustees (enforceable by law) and by the beneficiaries (enforceable in equity).

Scotland recognises only one owner of the trust property, namely the trustee, although that ownership is qualified by the trustee’s fiduciary duties and the trust purposes. Beneficiaries of a Scottish trust can enforce their rights only against the trustees, not the trust property. There are a number of practical differences in Scottish trusts:

1. Scottish trustees can act by a majority and quorum; unanimity is not required.

2. There have never been perpetuity periods in Scotland, although there are rules restricting accumulation of income.

3. The statutory powers of Scottish trustees rely on older legislation and are quite restricted, although this is normally overcome by including wider powers in the trust deed itself.

Scottish trusts are not restricted to Scottish trustees, settlors or Scottish property and provide a flexible structure for holding many types of asset for the benefit of individual beneficiaries and families.

Ian Macdonald

Ian Macdonald

Wright, Johnston & Mackenzie LLP, Glasgow, Scotland
T: +44 141 248 3434
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Wright, Johnston & Mackenzie LLP is an independent Scottish Law firm offering the full range of corporate, dispute resolution, and private client services. They are GGI’s sole Scottish member.

Ian Macdonald is Head of Private Client and specialises in trusts, capital taxes and estate planning. He represents Scotland on the Council of STEP, chairs STEP’s Professional Development Committee and is a member of a number of other STEP and Law Society of Scotland committees.

Published: Trust & Estate Planning, No. 03, Spring 2019 l Photo: Marco Gabbin -

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