Drafting a Trustee Deed for a UK Charitable Trust | LegalDocuments.co.uk

What this document is

A trustee deed (often just called a trust deed, or a declaration of trust for a charity) is the governing document that constitutes a charitable trust. Unlike a company limited by guarantee or a CIO, a charitable trust has no separate legal personality, the trustees themselves hold the charity's property and enter into arrangements on its behalf.

That makes the deed especially important, because it's the one place the charity's rules actually live. The deed records who the founding trustees are, declares the trust property, sets out the charitable objects (the purposes the charity exists to pursue), and lays down the procedures trustees must follow.

Once signed and executed as a deed, it binds the trustees in the way they manage and apply the charity's assets. If the charity meets the registration threshold set by the Charity Commission, the deed will also form part of the registration application.

The Commission publishes model trust deeds that many founders use as a starting point, though the right structure depends on what the charity actually intends to do.

How to use this document

1. Decide whether a trust is the right structure. Before drafting anything, work out whether a trust genuinely suits your plans. Trusts tend to work well for grant-giving charities or those holding property, but if you'll be employing staff, signing leases, or taking on contracts, an incorporated structure such as a CIO may protect trustees better because it gives the charity its own legal identity. 2. Define your charitable purposes carefully. The objects clause is arguably the most important part of the whole deed. Your purposes must fall within the descriptions of charity recognised under the Charities Act 2011, and they need to be for the public benefit. Vague or overly broad wording causes problems at registration, so take time getting this drafted in precise, activity-focused language. 3. Identify your trustees and set the governance rules. Name the founding trustees and decide how future trustees will be brought in, how long they'll serve, and how they can be removed. You'll also need provisions on meetings, quorum, voting, conflicts of interest, and decision-making. These rules don't just matter on day one, they shape every board meeting the charity will ever hold. 4. Deal with money, property and dissolution. The deed should set out how the trustees can apply income and capital, whether they have powers to invest or borrow, and what happens to any remaining assets if the charity winds up. Charitable assets can only pass to another charity with similar purposes, so the dissolution clause needs to reflect that principle clearly. 5. Execute the deed and register where required. Once the wording is finalised, the document must be signed as a deed, meaning signatures witnessed in the proper way. If your charity's annual income will exceed the Charity Commission's registration threshold (check gov.uk for the current figure), you'll need to register with the Commission and submit the deed as part of that process.