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Offshore Trusts Report: Gibraltar

Legislation, Regulation and Supervision

Gibraltar's asset protection trust legislation has traditionally fallen under the provisions of the Bankruptcy Amendment Ordinance 1990. This is unusual for offshore asset protection, which is dealt with under the law on fraudulent conveyancing laws in most offshore jurisdictions, as for instance in the Cayman Islands and the Bahamas.

For a settlor to avail himself of the protection of the Bankruptcy (Amendment) Ordinance 1990 each transfer to the trust must be registered. Prior or subsequent unregistered transfers are not protected by this Act. Registration of settlements is regulated by the Bankruptcy (Register Dispositions) Regulation (99v) which permit registration only if:

  • Disclosure forms approved by the Financial Development Secretary have been completed by the settlor and approved by the trustee;

  • The trustee has reviewed the public records to substantiate the disclosures;

  • The settlor has executed an affidavit of solvency; and

  • The trustee is in compliance with the legal licensing requirements of the Financial Services (Investment and Fiduciary Services) Ordinance 1989.

The provisions in Gibraltar are attractive to many settlors because they permit the equivalent of an "advance ruling" prior to committing the actual transfer to the trust. Fraudulent conveyancing laws depend for their effect on the statutory definition of 'intent' to defraud. By contrast, under bankruptcy law, which contains no definition of intent, the only direct action which can be commenced is a bankruptcy proceeding, which has a significantly tighter test of intent.

For a bankruptcy proceeding to succeed, it is necessary to show that the target (the settlor) is resident or domiciled in the jurisdiction, and that an 'act of bankruptcy' was committed there. Since most asset protection trusts are settled via exempt companies, whose owner (= the settlor) cannot be resident and a beneficiary, this will be difficult or impossible in many cases.

Trustees, if they are not already members of the accounting or legal professions, must be licensed by the Financial Services Commission, which applies a number of criteria to determining whether a person or a company is 'fit and proper' to have a license.

Gibraltar has signed Tax Information Exchange Agreements (TIEAs) with the USA, Ireland, Germany, New Zealand, Denmark and Australia. More TIEAs are expected as the territory seeks to comply with the OECD's standard on tax transparency.

The agreement provides for full exchange of information on civil and criminal tax matters between the two jurisdictions on request. It is wide ranging and includes:

  • information regarding the ownership of companies, partnerships, trusts, foundations, "Anstalten" and other persons, including ownership information on all such persons in an ownership chain;

  • in the case of trusts, information on settlors, trustees, beneficiaries, and protectors; and

  • in the case of foundations, information on founders, members of the foundation council, and beneficiaries.

The Report

Offshore Trusts Guide: Introduction

Offshore Trusts Guide: Jurisdictions

Bahamas Barbados Bermuda British Virgin Islands Cayman Islands Cook Islands Cyprus Gibraltar Guernsey Isle of Man Jersey Liechtenstein Madeira Malta Mauritius Monaco Nevis New Zealand Panama Seychelles Turks & Caicos Vanuatu

Gibraltar News

Gibraltar To Offer Foundations
Tuesday 4/4/2017
Gibraltar's Parliament recently passed a bill permitting the establishment of Private Foundations.

Gibraltar Acts To Preserve QROPS Status
Monday 3/4/2017
Gibraltar has made new pension regulations to maintain its attractiveness as a jurisdiction from which to transfer UK pensions.

International Support For Beneficial Ownership Info Exchange
Wednesday 27/4/2016
More than 20 jurisdictions have signed up to a pilot project to exchange data held on beneficial ownership registers and registers of trusts, according to UK Chancellor George Osborne.

OFCs Join G5 Beneficial Ownership Initiative
Monday 25/4/2016
Bermuda, Gibraltar, and the Isle of Man Governments have agreed to support an initiative on the automatic exchange of beneficial ownership information, which is being spearheaded by the five largest economies in the European Union.

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.

DeMontford Bell Expands Malta Operations
Wednesday 15/7/2015
DeMontford Bell, the UK-headquartered financial introducer, has announced that it is to expand its permanent operations in Malta to support the high volume of business migrating there.

Gibraltar Consults On Financial Services Fee Increases
Monday 23/2/2015
The Gibraltar Financial Services Commission has launched a consultation on increases to fees for certain regulated entities – generally of 10 percent – for the 2015/16 financial year.

Guernsey Named Europe's Top Captive Domicile
Wednesday 28/1/2015
Guernsey has been named European territory of the year for captive insurance business for the third year running at the UK Captive Services Awards.

Spain To Probe Homeowners' Gibraltar Ties
Friday 5/9/2014
Spain's Finance Minister, Cristóbal Montoro, has announced that the Government will look into the financial affairs of Spanish homeowners with ties to Gibraltar.

Gibraltar Delays Introduction Of New Companies Law
Thursday 4/9/2014
Gibraltar has agreed to industry requests to delay the introduction of its new Companies Act and Insolvency Act until November 1, 2014.