Wednesday, July 6, 2011
The benefits of using the British Virgin Islands as a jurisdiction for trusts and estates were the recent focus of a BVI International Finance Centre (IFC) sponsored roundtable discussion with senior private sector individuals at BVI House in London.
According to Executive Director of the IFC Sherri Ortiz, last week lawyers from BVI and London-based firms discussed the uses of the Virgin Islands Special Trust Act, 2003 (VISTA) and Private Trust Companies (PTCs).
Ortiz said: “The BVI continues to provide a balance between meeting the requirements of international business within a regulatory environment that meets international standards.”
Zac Lucas, a partner at Ogier BVI explained that VISTA deregulates trustee investments obligations with respect to shares of BVI companies held in trust and is therefore "a very simple mechanism to invoke".
The trust law of the BVI is based on English trust law. The Trustee Amendment Act 1993 updated the original British Virgin Islands Trustee Act (itself largely based on the English Trustee Act 1925). The Amendment Act introduced a fixed perpetuity period not exceeding 100 years, and has modern 'wait-and-see' provisions to deal with interests that might vest outside the perpetuity period. The Amendment Act also introduced purpose trusts.
BVI trusts are exempt from registration under the Registration and Records Act, and trustees are exempt from any need to file annual returns and from any other reporting requirements.
The majority of BVI trusts are exempt from all taxes provided there are no beneficiaries resident in the BVI, and that the trust does not conduct any business in the BVI or own any land in the jurisdiction.
Other areas of discussion at the event included an overview of the different legislation supporting trust business and the impact of the different rules and their uses. Additionally, the participants discussed the typical BVI trust structures and how international developments were likely to impact the sector in the future.
The roundtable followed on the heels of the BVI’s representation at the Transcontinental Trusts conference in Geneva, Switzerland, and the signing of a Tax Information Exchange Agreement (TIEA) with the Czech Republic. It is the twenty-second such agreement the BVI has signed.