4. Non-charitable purpose trusts
Past version: effective from 21/04/2016 - 20/04/2016
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(1) A trust created for a purpose in relation to which there is no beneficiary, not being a charitable purpose (a "non-charitable purpose trust"), shall not be invalid under any rule of law if the terms of the trust provide for the appointment of an enforcer in relation to its non-charitable purposes and for the appointment of a new enforcer at any time when there is none.
(2) Subsection (3) of section 4 of the Application of English Law Regulations 2015 is repealed.
(3) A non-charitable purpose trust may only be created to the extent its purposes are sufficiently certain to allow the trust to be carried out, lawful and not contrary to public policy in the Abu Dhabi Global Market. A non-charitable purpose trust shall be invalid to the extent that the trust:
(a) is immoral; or
(b) contrary to public policy or law in the Abu Dhabi Global Market.
(4) Subject to paragraph (1), a trust may be declared by trust instrument for a non-charitable purpose, including the purpose of holding or investing in shares in a company or person or any other assets constituting the trust property, if:
(a) the purpose is possible and sufficiently certain to allow the purpose to be carried out;
(b) the purpose is not immoral or contrary to public policy in the Global Market or unlawful under the legislation of the Global Market; and
(c) the trust instrument specifies the event upon the happening of which the trust terminates and provides for the disposition of surplus assets of the trust upon its termination.
(5) It shall be the duty of an enforcer to enforce the trust in relation to its non-charitable purposes.
(6) The appointment of a person as enforcer of a trust in relation to its non-charitable purposes shall not have effect if he is also a trustee of the trust or has a conflict of interest.
(7) Except as permitted by these Regulations or expressly provided by the terms of the trust, or with the approval of the Court, an enforcer shall not:
(a) directly or indirectly profit from his appointment;
(b) cause or permit any other person to profit directly or indirectly from such appointment; or
(c) on his own account enter into any transaction with the trustees or relating to the trust property which may result in profit to him or the trustee.
(8) Subject to paragraph (9), an enforcer may resign his office by notice in writing delivered to the trustee. Such resignation shall take effect upon delivery of notice.
(9) A resignation given in order to facilitate a breach of trust or duty shall be of no effect.
(10) An enforcer shall cease to be an enforcer of the trust in relation to its non-charitable purposes immediately upon:
(a) the enforcer's removal from office by the Court;
(b) the enforcer's resignation becoming effective;
(c) the coming into effect of a provision in the terms of a trust under which the enforcer is removed from office or otherwise ceases to hold office; or
(d) the enforcer's appointment as a trustee of the trust.
(11) A trustee of a trust for non-charitable purposes shall, at any time when there is no enforcer in relation to them, take such steps as may be necessary to secure the appointment of a new enforcer.
(12) Where the trustee of a trust for non-charitable purposes has reason to believe that the enforcer in relation to such purposes is unwilling or refuses to act, or is unfit to act or incapable of acting, he shall apply to the Court for the removal of the enforcer and the appointment of a replacement.
(13) The Court may on the application of a trustee or any interested person if it thinks fit:
(a) make an order concerning the appointment or removal of an enforcer in relation to any non-charitable purposes of the trust; or
(b) rescind or vary any such order or make any new or further order.
(14) A non-charitable purpose trust terminates:
(a) if no purpose of the trust remains to be achieved;
(b) if the purposes of the trust have become unlawful, impossible to achieve or contrary to public policy or law in the Abu Dhabi Global Market.