Investments under the trustee act-trust laws and accounts, Financial Accounting

Investments under the Trustee Act

The act defines the categories of investment as follows:
       
1. Fixed interest securities are:

  • Securities which under their terms of issue, bear a fixed rate o f interest; or
  • Mortgages of immovable property; or
  • Deposits, whether fixed-term or otherwise, with a  bank or financial institution building society or the Post Office Savings Bank.

 

2. “Wider Range “, i.e. building society shares, units of authorise unit trusts, and stocks and shares issued by companies if:

  • Company has issued and paid up capital of at least Shs.10 million.
  • Dividends have been paid on the shares in each of the preceding fiveyears; and
  • The shares are quoted on the Nairobi Stock Exchange.

 

In addition, immovable property in Kenya for an estate in fee simple or for a term of years  of which not less than 40 years is unexpired

3. Special-range property - property represented by any power of investment exercisable by a special investment clause contained in the trust instrument e.g. power to  invest in the shares of a private company.  This property musts be placed in a separate part of the fund and the provisions for division of the fund into   “narrower” and the “wider” range parts will only apply to the residue of the fund. If special range property is realised and converted into property other than special range property e.g. sale precedes, the balance between “fixed interest” and “wider range property must b e maintained.

Posted Date: 12/13/2012 6:30:10 AM | Location : United States







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