The recent controversy surrounding the proposed sale of Armadale Castle and 20,000 acres of the wider Clan Donald estate on the Isle of Skye provides a timely case study for English charities facing difficult decisions about the future of their heritage buildings. Although the Scottish legal framework differs from that in England, the themes raised are directly relevant: the need for robust governance, transparency in decision-making, and to manage the emotional responsibility of being guardians of historic assets.
Armadale Castle has long been associated with the MacDonalds of Sleat, operating as a visitor attraction, including a museum, café and gardens. Since 1971 the estate has been owned by the Clan Donald Lands Trust (CDLT), with its land also used by tenant crofters and farmers.
In March 2025, CDLT’s trustees announced their intention to sell the Castle and approximately 20,000 acres of surrounding land due to the “high‑cost, low‑income nature” of the property. Their stated aim was to release the charity from an unsustainable financial burden and transition to a grant‑making body focused on Clan and Highland heritage.
This news was met with dismay from Skye locals and Clan MacDonald supporters across the world. Statements by local groups cited insufficient consultation with the community.
The trustees stated that:
“Our overriding legal duty is to manage the charity’s assets to deliver our charitable purposes. To enable this, the charity is required to be financially viable … The sale of our property assets will allow the charity to stand on its own feet for the first time … After the sale … the charity will become a grant-giving body … We will consider grant applications from organisations and individuals supporting Clan and indigenous Highland heritage projects … In this way, we will make a meaningful contribution to the people and culture of our homeland for decades to come.”
Following complaints, the Scottish Regulator of Charities (OSCR), opened an investigation, but ultimately OSCR established no grounds to intervene in the decision of CDLT’s trustees to sell the Armadale estate, stating that:
“The charity’s trustees have acted within their powers and taken legal and financial advice prior to placing the charity’s landholdings up for sale. Charity trustees are the persons who have the general control and management of the administration of a charity. They are ultimately responsible for the management of the charity and as such they must make decisions and take certain actions. Whether others agree with their choices or not, OSCR cannot take action where the charity trustees have made decisions or taken actions that are within the powers set out in the charity’s governing document and have acted in accordance with their legal duties as charity trustees.”
On 15 January 2026 it was announced that the Castle had been purchased by the Canadian Hutchinson family for a reported £9.4 million. CDLT is to relocate the Museum of the Isles and change its name to the Clan Donald Heritage Trust.
So, what lessons can English charities learn?
1. Understand your charity’s purposes before considering a sale
Many English charities own heritage buildings by legacy rather than design. In some cases, these assets support charitable purposes directly; in others they can impose financial strain.
Before trustees make any decision about a potential sale, they must review the charity’s governing document to understand:
- whether holding or maintaining the property is itself a charitable purpose; or
- whether the property is merely one means of furthering the charity’s objects.
If maintaining the property is central to the charity’s purposes, a sale is unlikely to be possible without the involvement of the Charity Commission and, potentially, a change to the charity’s purposes. In some cases, the most appropriate route to a disposal may be transferring the asset on its existing trusts to a different charity whose purposes are aligned with heritage preservation.
On the other hand, where the property is not central to the charity’s objects, trustees should focus on how best to advance the charity’s purposes for the public benefit. There may be a strong emotional pull from a charity’s long association with a particular heritage building and significant stakeholder interest for the trustees to manage, but serving the charity’s purposes should be the guiding principle. If a decision is taken that disposing of a property is in the best interests of the charity then the trustees must comply with their legal duties under Part 7 of the Charities Act 2011 to obtain a designated adviser’s report and ensure any disposal achieves the best terms (including price) reasonably obtainable.
2. Plan for managing stakeholder sensitivities and reputational risk
A significant theme in the Armadale Castle case was a feeling among stakeholders that there had been insufficient consultation. Even where trustees have the power to sell and the asset is not integral to the charity’s objects, meaning that consultation may not be legally required, a heritage building may be a “crown jewel” asset with strong emotional resonance for supporters, beneficiaries or the public, meaning the trustees need to balance complex considerations.
The Charity Commission expects trustees to demonstrate robust decision‑making, including:
- appropriate consideration of stakeholder views;
- evaluation of reputational risks; and
- clear documentation showing how the trustees’ decision furthers the charity’s purposes.
In relation to the disposal of high‑profile heritage assets, early and proportionate engagement with stakeholders can help mitigate opposition and demonstrate transparency. This does not mean decisions must be put to a public vote, but the rationale for the decision must be clear, lawful, and properly evidenced. Failure to engage in appropriate consultation may impact negatively on the charity’s public reputation, for which the trustees could be responsible.
Engaging a heritage consultant to explore alternatives to disposal, such as sympathetic repurposing options, grant‑funding opportunities or revised operating models, can also demonstrate that trustees have considered all reasonable options before concluding that a sale is necessary. Many charities have been able to retain a valued heritage building in a way that generates sufficient income to fund its upkeep and enhances the charity’s profile. However, achieving this balance can be difficult given that the operational costs associated with historic buildings are often substantial, and the income streams available, such as venue hire, visitor income or commercial tenancies, may not always be reliable.
3. Key steps for any charity contemplating sale of a heritage asset
Charities in the position of looking to dispose of a heritage asset should ensure they:
- Review their governing document and charitable purposes to understand whether sale is legally permissible.
- Obtain independent advice, including a Charities Act compliant valuation report and, where appropriate, heritage and property or estates expertise.
- Engage with stakeholders and document their approach to consultation and reputation management.
- Demonstrate robust trustee decision‑making, clearly linked to the charity’s purposes and public benefit.
The Birketts view
The Armadale Castle case demonstrates the complex blend of legal, practical and reputational issues that trustees must navigate when historic properties become financially unsustainable. Even when a sale is legally possible and in the charity’s best interests, the process requires careful planning, transparent communication, and well-documented, robust (and brave) decision-making.
At Birketts, we regularly advise charities facing these challenges. We help trustees navigate their legal duties, evaluate strategic options, and access the heritage and property expertise needed to make well-informed decisions about the future of their heritage buildings.
Links:
OSCR’s updated inquiry report into the Clan Donald Lands Trust
The Charity Commission’s guidance for trustees on decision-making
Key Contacts
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at February 2026.