Regulation 11 Trust based schemes: requirements as to termination
The terms of a trust based scheme must require that the scheme will be terminated if, but only if,–
the trustee is directed either–
to dispose of the whole or substantially the whole of the property subject to the scheme; or
to terminate the scheme, by a majority representing 75% in number of the units in the scheme at a meeting of participants, convened in accordance with the provisions of the trust deed, or, if such a meeting is adjourned, the trustee is directed to do so at the adjourned meeting by a majority representing 75% in number of the units held by the participants present and voting at that adjourned meeting; or
the whole, or substantially the whole, of the property subject to the scheme is acquired compulsorily; or
three months have elapsed since either the trustee notified the operator that the trustee wished to retire or since the trustee became obliged to retire by virtue of those terms of the scheme described in regulation 13(b)(i) and, in either case, the operator has been unable to find a person of the kind described in regulation 6(2)(a) who is ready and willing to act as trustee of the scheme; or
three months have elapsed since–
the operator notified the trustee that the operator wished to retire; or
the retirement of the operator was approved or required in the manner described in regulation 13(d)(i) or (ii); or
the trustee became aware that an event of a kind described in regulation 13(e) or (f) had occurred; or
the trustee or the operator became aware that each had ceased to be independent of the other,
and, in a case within sub-paragraphs (i) to (iii) above, the trustee has been unable to find a person of the kind described in regulation 6(2)(b)(i) and (ii) who is ready and willing to act as operator of the scheme and who is independent of the trustee or, in a case within sub-paragraph (iv) above, the operator has been unable to find a person of the kind described in regulation 6(2)(a) who is ready and willing to act as trustee of the scheme.
For the purposes of paragraph (1), consent given by participants to the grant of any mortgage, charge or other interest shall not be taken to be a direction of the kind described in that paragraph.
The terms of a trust based scheme must contain provisions which are applicable in the event of the termination of the scheme, otherwise than in connection with the merger of the scheme with another scheme, and which–
oblige the trustee to sell, as soon as is reasonably practicable in the interests of participants, the land and the building or group of adjacent or contiguous buildings forming part of the property subject to the scheme and such, if any, of any other property subject to the scheme as is not invested in the manner for which the terms of the scheme must make provision by virtue of sub-paragraph (b) of this paragraph;
specify the manner in which so much, if any, of the proceeds of sale of the property subject to the scheme as are not distributed to participants immediately upon sale are to be invested pending further or final distribution and oblige the trustee so to invest the relevant proceeds;
oblige the trustee, forthwith upon completing the sale of the property required to be sold by virtue of the provisions mentioned in sub-paragraph (a) of this paragraph, to realise such, if any, of the property subject to the scheme as is invested pending further or final distribution;
oblige the trustee, forthwith upon completing the realisation mentioned in sub-paragraph (c) of this paragraph and after deducting such sum, if any, as is payable for, or is set aside as provision for, all liabilities (whether actual or contingent) properly payable out of the property subject to the scheme including the actual or contingent costs of termination, to distribute to participants, in proportion to their respective entitlements, all property subject to the scheme; and
except in a case within paragraph (1)(d)(i) to (iii), oblige the trustee to act in accordance with the operator’s directions when discharging the obligations imposed by virtue of the provisions mentioned in sub-paragraphs (a) to (d) of this paragraph.