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Trusts (Capital and Income) Bill [HL]

My Lords, I am in no sense an expert in this area, but over the past two or three years I have been involved in negotiations with the Charity Commission. I certainly join with those who have expressed appreciation to the Law Commission for its work on this. I think I have only on one previous occasion had a debate in this Chamber on one of its reports. Am I right in thinking that this does not go to the Commons at all and is dealt with exclusively in your Lordships’ House? I was not clear about that. I also pay tribute to the way the Charity Commission has handled the particular negotiations in which I have been concerned. I understand it is being quite severely affected by the cutbacks but it managed to get through these particular negotiations before that had too serious an effect. I will raise only some very simple points. The explanation given by the noble Lord, Lord McNally, points out that the four burdensome 19th century rules requiring apportionment between capital and income, which are described so adequately in the Explanatory Memorandum, will be renewed for new trusts. My very simple question is: will it apply only to new trusts, or can existing trusts make arrangements to take advantage of the changes as well? The Explanatory Memorandum draws rather a charming analogy with trees and the fruit of trees. In the trust about which I am concerned, we had considerable problems over whether to regard a particular asset as income or capital. In addition to the original trust being set up, it was then given the royalties from a particular operation and was therefore continually topped up in this way. This gave us considerable problems in deciding whether that should be regarded as capital or income. However, it will be very helpful overall if time and costs can be saved by the Charity Commission making regulations, rather than people having to apply on a case-by-case basis, as is the present position. The Minister’s letter has a final line which states that the Bill is expected to be beneficial to small firms and micro-businesses. I am rather puzzled as to how that will be the case but no doubt the Minister can explain.