Trust
This query is : Resolved
23 December 2010
I am planning to purchase a property for building apartments. but the problem is that the land is held under a trust. my query is that can the trustee ( who wishes to) transfer such land to me.. if no then is there any other alternative because on selling the apartment registration would have to be done in the name of the owner. the trust deed provides that the land can be used for the purpose of building a school or a hospital..
24 December 2010
I think, trust property can not be sold without the permission of Charity Commissioner. Charity Commr would give permission only if the proposal to sale the turst land is in line with the objectives of the trust.
24 December 2010
and what if the trustee wants to revoke the trust and dispose of the assets.. can he do so
24 December 2010
and what if the trustee wants to revoke the trust and dispose of the assets.. can he do so
24 December 2010
I presume it is a public trust registered with the Charity Commissioner. Sec 36 of Bombay Public Trust Act requires any sale/transfer/pledge of immovable property of trust to be pre-approved by the Charity Commissioner. The procedure for sale is public auction wherein open tenders are floated thru newspapers and the highest bidder gets the immovable property. Moreover, if the land has Agricultural status, then collector' approval is also required.
The above also holds good for Trusts registered in Gujarat.
If the trust is to be revoked, the immovable properties will be disposed in accordance with the above section and the money will go to the revenue department (district collector).
Hope the above clarifies your query.
The above also holds good for Trusts registered in Gujarat.
If the trust is to be revoked, the immovable properties will be disposed in accordance with the above section and the money will go to the revenue department (district collector).
Hope the above clarifies your query.
25 December 2010
Hi Rasesh,
Thanks for the concern.. But it is a private trust with all the trustees being the family members. They are wanting to dispose of the land with minimal outflows in the shape of capital gains.. but the first and the foremost thing is that is it allowed for a trust to sell of its immovable property.. Are there any provisions through which i can take over the trust in my hands or change the objectives of the trust to include selling of residential plots. My ultimate purpose is to build apartments on the land and register it in the name of the customers.This land as on date is under a trust and is in U.P. How am i gonna do that is what i needed help on. I hope the picture is clear to you now. if there is anything you could help me with i'd be thankful..
Thanks for the concern.. But it is a private trust with all the trustees being the family members. They are wanting to dispose of the land with minimal outflows in the shape of capital gains.. but the first and the foremost thing is that is it allowed for a trust to sell of its immovable property.. Are there any provisions through which i can take over the trust in my hands or change the objectives of the trust to include selling of residential plots. My ultimate purpose is to build apartments on the land and register it in the name of the customers.This land as on date is under a trust and is in U.P. How am i gonna do that is what i needed help on. I hope the picture is clear to you now. if there is anything you could help me with i'd be thankful..
02 August 2025
Thanks for sharing the detailed situation. Here’s a structured answer based on the facts and the law applicable to private trusts holding immovable property (specifically in U.P.):
---
### 1. **Can a Trustee sell the land held under the trust?**
* **Generally, the trustee can only sell or transfer trust property if:**
* The **trust deed explicitly allows sale or transfer** of the property.
* The **trustees act in accordance with the trust objectives**.
* They obtain any **statutory approvals required under local/state law**.
* If the trust deed **restricts use** of the property to specific purposes (like school or hospital), the trustee **cannot sell or transfer the land for other purposes** (like residential apartments).
---
### 2. **Revoking or changing the trust objectives**
* A **private trust** (with family members as trustees) can amend its trust deed **if all the trustees agree** and if the deed provides for such amendment.
* However, the **amendment must not defeat the original purpose** or violate any law.
* Changing the objective from charitable (e.g., school or hospital) to commercial (residential apartments) **may not be legally permissible**, especially if it affects exemption status under Income Tax or if the property is subject to restrictions.
* If the trust is registered under any charitable trust act, permission from the **Registrar or Charity Commissioner** (or equivalent authority) is generally required to modify the objectives or dispose of immovable property.
---
### 3. **Alternatives for the purchaser / developer**
* If **direct sale by trustee is not possible** due to trust deed restrictions, consider:
* **Approach the trust to surrender or transfer the property legally**, possibly by amending the trust deed with mutual consent and necessary approvals.
* **Lease the land for a long term (e.g., 99 years)** to develop apartments, which avoids outright sale but allows usage.
* **Partition or dissolution of trust**, if all trustees agree, and distribute the assets among beneficiaries, who can then sell.
---
### 4. **Capital Gains and Tax Considerations**
* Sale of immovable property by a trust may attract **capital gains tax**.
* If the trust enjoys tax exemptions (e.g., charitable trust under Section 11), sale or change of use may jeopardize those benefits.
* Tax planning should be done carefully to minimize outflows, possibly by leveraging exemptions or restructuring the transaction.
---
### 5. **U.P. Specific & Legal Compliance**
* For trusts in Uttar Pradesh:
* If the trust is **registered under the U.P. Public Trust Act or similar**, the **Charity Commissioner’s approval is needed for sale/disposal of immovable property**.
* If **private family trust** and not registered, still local laws and trust deed provisions govern.
* Verify if the property has any **land use restrictions** (like agricultural land conversion approvals).
---
### **Summary:**
| Issue | Possible Action / Advice |
| ----------------------------- | --------------------------------------------------------- |
| Sale of trust land prohibited | Check trust deed and seek amendment/approval |
| Change of trust objectives | Amend trust deed with consent and approval |
| Transfer to you as buyer | Negotiate sale with trust, get approvals |
| Alternate: Lease | Consider long-term lease instead of sale |
| Tax on sale | Consult tax expert for capital gains and exemption impact |
| Approval required | Charity Commissioner / Registrar (if applicable) |
---
**I strongly recommend consulting a local advocate specializing in trust and property law in Uttar Pradesh** to help draft amendments or pursue approvals and to navigate the complex legal and tax implications.
---
If you want, I can help draft some sample clauses or letters to approach the trust or authorities. Would you like that?
---
### 1. **Can a Trustee sell the land held under the trust?**
* **Generally, the trustee can only sell or transfer trust property if:**
* The **trust deed explicitly allows sale or transfer** of the property.
* The **trustees act in accordance with the trust objectives**.
* They obtain any **statutory approvals required under local/state law**.
* If the trust deed **restricts use** of the property to specific purposes (like school or hospital), the trustee **cannot sell or transfer the land for other purposes** (like residential apartments).
---
### 2. **Revoking or changing the trust objectives**
* A **private trust** (with family members as trustees) can amend its trust deed **if all the trustees agree** and if the deed provides for such amendment.
* However, the **amendment must not defeat the original purpose** or violate any law.
* Changing the objective from charitable (e.g., school or hospital) to commercial (residential apartments) **may not be legally permissible**, especially if it affects exemption status under Income Tax or if the property is subject to restrictions.
* If the trust is registered under any charitable trust act, permission from the **Registrar or Charity Commissioner** (or equivalent authority) is generally required to modify the objectives or dispose of immovable property.
---
### 3. **Alternatives for the purchaser / developer**
* If **direct sale by trustee is not possible** due to trust deed restrictions, consider:
* **Approach the trust to surrender or transfer the property legally**, possibly by amending the trust deed with mutual consent and necessary approvals.
* **Lease the land for a long term (e.g., 99 years)** to develop apartments, which avoids outright sale but allows usage.
* **Partition or dissolution of trust**, if all trustees agree, and distribute the assets among beneficiaries, who can then sell.
---
### 4. **Capital Gains and Tax Considerations**
* Sale of immovable property by a trust may attract **capital gains tax**.
* If the trust enjoys tax exemptions (e.g., charitable trust under Section 11), sale or change of use may jeopardize those benefits.
* Tax planning should be done carefully to minimize outflows, possibly by leveraging exemptions or restructuring the transaction.
---
### 5. **U.P. Specific & Legal Compliance**
* For trusts in Uttar Pradesh:
* If the trust is **registered under the U.P. Public Trust Act or similar**, the **Charity Commissioner’s approval is needed for sale/disposal of immovable property**.
* If **private family trust** and not registered, still local laws and trust deed provisions govern.
* Verify if the property has any **land use restrictions** (like agricultural land conversion approvals).
---
### **Summary:**
| Issue | Possible Action / Advice |
| ----------------------------- | --------------------------------------------------------- |
| Sale of trust land prohibited | Check trust deed and seek amendment/approval |
| Change of trust objectives | Amend trust deed with consent and approval |
| Transfer to you as buyer | Negotiate sale with trust, get approvals |
| Alternate: Lease | Consider long-term lease instead of sale |
| Tax on sale | Consult tax expert for capital gains and exemption impact |
| Approval required | Charity Commissioner / Registrar (if applicable) |
---
**I strongly recommend consulting a local advocate specializing in trust and property law in Uttar Pradesh** to help draft amendments or pursue approvals and to navigate the complex legal and tax implications.
---
If you want, I can help draft some sample clauses or letters to approach the trust or authorities. Would you like that?
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