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Offshore Trusts Report: Jersey

Legal Framework and Formation Rules and Fees

Jersey trusts are governed by The Trust (Jersey) Law 1984, as amended in 2006, which codified trust law largely along the lines of English-based common law, and the Trusts (Amendment) (Jersey) Law 1989. Trust company business is regulated under the provisions of the Financial Services (Jersey) Law 1998.

Appeal against judgements of the Royal Court of Jersey lie to the Jersey Court of Appeal and finally to the English Privy Council.

Although Jersey law has its roots in the Norman law (a 'Roman' or 'Civil' law code), the Trusts (Jersey) Law 1984 codified an entirely 'Anglo-Saxon' body of trust law, resolving many uncertainties and increasing protection for beneficiaries. Subsequent amendments included the recognition of 'purpose' trusts in 1996 (the normal form of Jersey trusts is 'discretionary'). This has led to an increase in corporate use of Jersey trusts.

Jersey is a party to the Hague Convention on the Law Applicable to Trusts and Their Recognition. Jersey trust law explicitly excludes foreign inheritance laws and does not recognize foreign judgements.

Trust management, particularly for wealthy UK individuals, was Jersey's traditional business, but successive tightenings of UK anti-avoidance legislation have reduced the possibilities for UK citizens. However, Jersey's trust business has continued to grow based on a more international clientele, and following the introduction of the purpose trust, a surge in corporate trust work and the recent introduction of Foundations. There are also Collective Investment Funds based on trusts.

The creation of a trust is free from Government duty and there are no registration or audit requirements as such in Jersey, although the tax authorities of beneficiaries' jurisdictions (eg the UK) may require annual reports. Jersey trusts may 'migrate' to other jurisdictions by changing trustees and the applicable law of a trust; likewise, foreign trusts may migrate to Jersey.

The trustees of a non resident trust are not required to make returns or provide accounts of the trust to the Comptroller of income tax. Trust accounts must be kept and trust documents are normally in English.

In the case where the beneficiaries of a Jersey trust are non resident, income arising from sources outside Jersey is not liable to income tax in Jersey, nor are distributions to the beneficiaries. This exemption is automatic, and does not need to be applied for.

Interest on bank deposits made by the trustees of a nonresident trust is not taxed because of a government concession.

However, if any of the settlor, the life tenants or the beneficiaries are Jersey-resident, the tax picture becomes more complex, and exemption from Jersey tax will be partial, at best; however if only the settlor is Jersey-resident, full exemption may be available on application to the Comptroller, subject to stringent conditions. If tax is due on a Jersey trust, then it is assessed on the trustee; a non-resident trustee will however be assessed only on income arising in Jersey.

There are no special provisions in Jersey law covering Unit Trusts, which are therefore treated in the same way as ordinary Jersey trusts, and have the same tax regime.

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


Jersey News

Channel Islands Exchange Attracting New Listings Thursday 3/11/2016 Steps taken by the Channel Islands Stock Exchange to enhance and diversify its offerings contributed to a 13 percent increase in new business during the first half of the year.

JFSC Reports On Trust Company Business Compliance Wednesday 30/3/2016 The Jersey Financial Services Commission has published an annual review of its findings during on-site visits in 2015 to review the practices of trust company businesses.

Jersey Raises Trust Company Fees Tuesday 23/2/2016 The Jersey Financial Services Commission has raised Trust Company Business registration and application fees for 2016.

Jersey Regulator Issues 2016 Business Plan Friday 12/2/2016 The Jersey Financial Services Commission has set out its objectives and priorities for the coming year in its 2016 Business Plan and Budget.

Channel Islands Exchange Welcomes Solid 2015 Thursday 28/1/2016 There was an eight percent increase in the number of securities listed on the Channel Islands Securities Exchange in 2015.

Jersey Regulator To Hike Trust Registration Fees Tuesday 22/12/2015 The Jersey Financial Services Commission has launched a public consultation on proposals to increase annual registration fees and alter the current fee cap for trust companies.

Dispute Over Viability Of Jersey's IFC Project Tuesday 3/11/2015 Jersey's Corporate Services Scrutiny Panel has said Jersey's new international finance center complex is not financially viable, in comments regarding a first building – Building 4 – that is being constructed and the wider plans.

Gibraltar To Introduce Foundations Wednesday 28/10/2015 The Government of Gibraltar has launched a consultation on the introduction of new legislation to permit the creation of private foundations.

Appleby Named Top Offshore Law Firm Of 2015 Thursday 8/10/2015 International law firm Appleby has been named Legal 500 UK's 2015 "Firm of the Year" in the Offshore category.

Jersey Finance Sector Supporting Economic Recovery Wednesday 30/9/2015 Jersey's Statistics Unit has reported that 2014 was the first year since 2007 that Jersey's economy grew in real terms.