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Offshore Trusts Report: Guernsey

Legal Framework and Formation Rules and Fees

The Guernsey law of trusts was codified in 1989 along broadly Anglo-Saxon lines in the Trusts (Guernsey) Law 1989, since updated by the Trusts (Guernsey) Law 2007. On the whole it gives extra protection to beneficiaries. This law does not apply directly in Alderney or Sark, but has a substantial influence on trusts in those jurisdictions.

Trust documents are in English. There are no registration requirements for trusts, no fees are payable on formation, and there are no annual reporting requirements other than for resident trusts (ie those with resident beneficiaries). Trust accounts must be kept but there is no audit requirement.

The maximum perpetuity for Guernsey trusts was 100 years, although the introduction of the new legislation in 2007 changed this (see below). The law provides for non-recognition of foreign judgements, and forced heirship provisions in foreign law can be over-ridden.

Trust management, particularly for wealthy UK individuals, was the island's traditional business. Successive tightenings of UK anti-avoidance legislation have reduced the possibilities for UK citizens, but Guernsey's trust business has continued to grow based on a more international clientele. Many Collective Investment Funds are also of course based on trusts.

Several hundred firms offer fiduciary trust services on Guernsey. The island has a very well-developed legal and financial infrastructure for trust management; the highly sophisticated professional services which support the trust sector include lawyers, accountants, investment managers and stockbrokers.

When the beneficiaries of a trust are non-resident, full exemption from Guernsey taxation is given to foreign income and Guernsey bank interest, by concession, whether or not the income is distributed. The trustee of a trust with Guernsey-resident beneficiaries may be charged with tax due on trust income, although the tax is normally assessed directly on the beneficiary. The trustee is entitled to any allowances which would apply to the beneficiary. Unit trusts are treated in the same way as other trusts; the existence of Guernsey unit-holders does not affect exemption, subject to some conditions.

As far as International Trusts are concerned, it is possible to export a Guernsey trust replacing Guernsey trustees with nonresident trustees and changing the proper law of the trust; equally, a trust established in another jurisdiction may migrate to Guernsey by appointing Guernsey resident trustees. Trust accounts must be maintained although they do not require auditing and the trustees of a nonresident trust do not need to submit returns or provide trust accounts to the administrator of income tax.

   

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

 


Guernsey News

Guernsey Expertise Tapped By Wealthy Philanthropists Monday 9/10/2017 A sizable new stream of business for the legal sector and other professional service providers is emerging as Guernsey becomes recognized as a centre of excellence for the founding of charitable and philanthropic structures, Guernsey Finance says.

Guernsey Finance Marks A Decade In China Wednesday 27/9/2017 The signing of cooperation deals with Chinese regulators and industry associations provided Guernsey with the foundation to develop business and build relationships with Chinese service providers and their clients, a recent conference was told.

Cayman Islands Named Leading Specialized IFC Friday 8/9/2017 The Cayman Islands has again been named the world's number one specialized financial center by the Banker magazine, part of the Financial Times Group.

Abu Dhabi Tax-Free Zone To Launch Foundations Friday 2/6/2017 Abu Dhabi Global Market, the low-tax international financial center, is seeking feedback on its proposal to allow the formation of "foundations," a trust-like entity widely used in civil law jurisdictions.

Guernsey Issues Warning On 'Sark Company Registry' Thursday 18/5/2017 The Guernsey Financial Services Commission has issued a warning concerning an entity named "Sark Company Registry," while investigations are ongoing.

Guernsey Funds Sector Grew In 2016 Monday 27/3/2017 The total value of funds business in Guernsey grew by more than GBP28bn (USD32.5bn) last year.

Guernsey Introduces Client Asset Handling Rules Wednesday 22/2/2017 Guernsey's financial services regulator, the Guernsey Financial Services Commission, said it intends to introduce rules governing the holding and administration of client assets in 2017.

Guernsey Regulator Outlines 2017 Funds Strategy Monday 2/1/2017 Guernsey's financial services regulator, the Guernsey Financial Services Commission, has outlined its funds sector strategy for 2017.

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.

Guernsey Funds Sector Continues To Grow Thursday 16/6/2016 Figures released by the Guernsey Financial Services Commission show continued growth for Guernsey-based funds.