Date Set For Introduction Of New Guernsey Trusts Law

by Carla Johnson, Investors Offshore.com, London

21 February 2008

It was announced this week that the new Guernsey Trusts Law will come into effect from 17th March.

Some of the most significant changes to the Island’s trust legislation include:

• The introduction of (non-charitable) Purpose Trusts;
• Removal of limits on the length of a trust’s duration – allowing perpetual trusts;
• Clarification of the position of retiring trustees, making the transfer process more streamlined;
• Clarification of the circumstances under which information has to be given to beneficiaries;
• Abolition of the liability of directors of corporate trustees based in Guernsey or acting as trustees of Guernsey law trusts, particularly as a way to encourage greater use of Private Trust Companies (PTCs); and
• Revision of arrangements regarding limitation periods and Alternative Dispute Resolution (ADR).

The Trusts (Guernsey) Law, 2007, was passed by the Island’s parliament last July, and was given Royal Assent by the Privy Council on 12th February, 2008. It was registered with Guernsey’s Royal Court on 18th February and will commence operation on the 28th day after this date.

“Guernsey’s fiduciary practitioners are very much looking forward to the enactment of the law. The changes it is set to make to the Island’s trust legislation are expected to give us enhanced flexibility in providing solutions to meet the ever-evolving needs of our international client base,” observed Gavin St Pier, Director of Barclays Wealth (Guernsey).

The new law has its roots in a series of proposals made in the ‘Evans Report’, which was published following a root and branch review of the Island’s trust legislation by a working party under the chairmanship of Guernsey advocate Rupert Evans.

“This is yet another example of how the Guernsey government, the Island’s financial regulator and its industry practitioners, continually work together to maintain an environment that maximises business flows,” stated Peter Niven, Chief Executive of GuernseyFinance – the promotional agency for the Island’s finance industry.

Guernsey has more than 50 years experience in providing trust and corporate services. Today, the Island hosts more than 140 licensed fiduciaries, ranging from large organisations to independent, boutique operations. Together, they hold between GBP200 and GBP300bn worth of assets in trust.

Mr Niven added that: “Guernsey’s fiduciary industry has built a reputation for professionalism and expertise in using the modern structures that are available on the Island for the preservation of both institutional and individual/family wealth and assets. The amendments to Guernsey’s trust legislation include several significant changes like the introduction of Purpose Trusts that will particularly enhance the Island’s fiduciary environment."

He concluded: “However, we are far from resting on our laurels and work continues to introduce legislation that will allow the establishment of Foundations. The addition of this innovative tool will ensure that the Island’s practitioners are able to offer their internationally mobile clients the widest spectrum of products and services.”

Recommended