UK Law and Practice Contributed by: Roger Gherson, Alfred Gherson, Lisa Uttley and David Tipping, Gherson Solicitors
6. Roles and Responsibilities of Fiduciaries 6.1 Prevalence of Corporate Fiduciaries Corporate and professional fiduciaries play an increasingly important role in the administration of trusts, estates and other wealth structures in England and Wales. The growing complexity of the tax, regula - tory and compliance environment, particularly follow - ing the reforms of 2025 and 2026, has made profes - sional trusteeship not merely a convenience but, for many HNW families, a practical necessity. English law expressly recognises the distinction between lay (non- professional) and professional trustees. It imposes a higher standard of conduct on the latter through the statutory duty of care in the Trustee Act 2000. Corporate and professional fiduciaries are increasing - ly prevalent in England and Wales, driven by growing regulatory complexity, tax reform and dispute risk. 6.2 Fiduciary Liabilities English law does not permit the courts to “pierce the veil” of a trust in the corporate sense, but trusts can be set aside as shams where the settlor and trustee never genuinely intended the trust to operate as stat - ed. Transfers into trust may be unwound (for transac - tions defrauding creditors, with no time limit) or under bankruptcy clawback rules. The divorce court can treat trust assets as a financial resource and set aside avoidance transactions. Trustees are personally liable for trust obligations and have a right of indemnity from the trust fund. 6.3 Fiduciary Regulation England and Wales have a comprehensive framework encouraging prudent investment by fiduciaries. The management of trusts is regulated by the Trustee Investments Act 1961 and the Trustee Act 2000. Trustees are given a broad general power of invest - ment: they may make any investment a private inves - tor could make.
• family provision claims (discussed above) for rea - sonable financial provision; • will validity challenges on grounds of capacity, undue influence, knowledge and approval or fraud; • proprietary estoppel claims based on promises of inheritance; • trust disputes including trustee removal, breach of trust and variation applications; • cross-border jurisdictional conflicts; and • HMRC investigations into IHT underpayments. Early planning, transparent communication and pro - fessional governance remain the best defences. 5.2 Mechanism for Compensation England and Wales compensate aggrieved parties in wealth and trust disputes primarily through equitable remedies rather than common law damages. For breach of trust, the court awards equitable com - pensation to restore the trust fund to the position it would have occupied but for the breach, with the quantum assessed by reference to the loss caused. An account of profits strips a fiduciary of unauthorised gains, regardless of whether the trust suffered loss. Proprietary remedies – tracing, constructive trusts and equitable liens allow beneficiaries to claim the trust property itself or its traceable substitute, giving priority over unsecured creditors. The court may order periodical payments, lump sums, property transfers, settlements or trust varia - tions to provide reasonable financial provision from a deceased’s estate. Proprietary estoppel remedies are discretionary, bal - ancing the claimant’s expectation against their detri - ment. The court may remove trustees under the Trustee Act 1925 and specialist procedural orders protect the administration of trusts. Punitive or exemplary damages are not generally available.
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