Trusts (Income and Capital) Act 2013 section 4

Total return investment by charities

Section 4 introduces new provisions into the Charities Act 2011 that allow charity trustees to invest permanent endowment funds on a "total return" basis, removing the traditional obligation to distinguish between capital and income.

• Charity trustees may resolve to invest an available endowment fund without needing to maintain a balance between capital and income returns, provided they are satisfied this is in the charity's interests
• An "available endowment fund" means the whole of a charity's permanent endowment (if all subject to the same trusts) or any separately-held part subject to different trusts
• The Charity Commission may make regulations governing the resolution process, the investment and expenditure rules for funds under total return, and the steps required if a resolution ceases to have effect
• Any power to accumulate income conferred by these regulations is exempt from the 21-year accumulation limit in the Perpetuities and Accumulations Act 2009