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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

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

Jersey News

Guernsey's 10-Year-Old Trusts Law 'Ahead Of Its Time'
Friday 23/3/2018
Guernsey's trusts law, which came into force 10 years ago, has been described as "ahead of its time" and "a reminder of the jurisdiction's ability to innovate and adapt to changing market conditions" by leading trust and fiduciary lawyer Russell Clark.

Guernsey Finance Strengthens Hong Kong Presence
Thursday 8/3/2018
Guernsey's financial services promotion agency, Guernsey Finance, says its Hong Kong office has yielded significant benefits for the territory over the past 15 months.

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.

Jersey Proposes Infrastructure Levy
Friday 23/6/2017
Jersey is consulting on the introduction of a land development charge, to be called the Jersey Infrastructure Levy.

Jersey Research Highlights China HNW Succession Issues
Thursday 15/6/2017
Jersey's financial services promotion agency, Jersey Finance, has published new research on the key challenges facing wealth management practitioners working with China's wealthiest individuals.

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.

Jersey Regulator Issues AML/CTF Funds Guidance
Thursday 16/3/2017
Jersey's financial services regulator, the Jersey Financial Services Commission, has issued new anti-money laundering and countering the financing of terrorism guidance for Funds and Fund Operators.

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.