Where land was, before the commencement of the Act, conveyed to trustees on trust to sell it and to hold the proceeds of sale on trust for beneficiaries in equal shares, equity treated the interests of the beneficiaries in the land as being interests only in the proceeds of sale and accordingly converted into personalty. Correspondingly if money was given to trustees on trust to purchase land, in certain circumstances it would be treated as land even though the purchase had not taken place.

This section abolishes the doctrine of conversion in relation to trusts created before and after the commencement of the Act but it is provided by sub-section (2) that this change is not to apply to a trust created by will if the testator died before the commencement of the Act. Section 18(3) similarly provides that it does not apply to personal representatives if the death occurs before the commencement of the Act. Section 25(3) also provides that the alterations made by the Act in consequence of Section 3 do not affect trusts created by the Will of a person dying before the commencement of the Act or personal representatives where the deceased died before such commencement. There would seem to be a certain amount of overlap between these three provisions.