Guernsey Trust
Currently, the trusting system is globally spread. It is especially popular in areas where the Anglo-Saxon law is applicable that has a specific historical background. One of such areas is the island of Guernsey. Unlimited possibilities are offered to the concerned people regarding the storage, increase and full protection of their own assets, including the possibility to transfer to the beneficiaries. The currently applicable legislation with the current form dated 2008 allows vast opportunities for variable choice of the entrepreneurship forms, opening quite attractive prospects for tax planning.
The classic form involving discretionary managers, beneficiaries, as well as founders based on the island, provides the extensive list of advantages and benefits. Among them:
- Great asset security against external claims by constituent creditors and their successors, as well as acquisitions of higher aggression from third parties;
- High rates of the regulatory framework suitability to functioning with trusts;
- Stable performance of the law and economy;
- Safety of investments and their reliability;
- Data confidentiality – there is no deposit base on the island and no information about founders and beneficiaries is disclosed;
- Variability of legal rules that help third parties or founders have the opportunity to expand personal authorities;
- Lack of fixing the size of the authorized fund;
- Extensive possibilities to reduce the tax base;
- Arbitrary selection of currency for deposits;
- Ability to control, both by individuals and entities.
Guernsey trust and its variations
The place creates the required environment for all relevant trust structures to function. Their type depends on objectives pursued by founders. The main objective of the trust is the effective formation of financial activity with simultaneous fund security. Structures are formed under the contract; they do not relate to legal entities, do not require entry with the registry and annual report submission. The need in regular audit is also missing.
When disposing of property, the founder loses his rights to it. The asset concentration is reported in trustees in separation from founders. This allows to secure the property and preclude the property management by the founder.
The trust formation allows avoiding such problems. As such, its structure should be discrete and offer the following advantages:
- Possibility to submit written instructions in respect of trustees to manage the fund;
- Self-decision making by participants on payment of share to beneficiaries, the priority and procedure of responding to change;
- Providing a variety of tax planning options;
- Possibility to change protectors or trustee by founders.
This type of trust allows the founders reserving the right to use all levers of influence and major authorities. The beneficiaries remains the possibility for free will only. Other trust formation in the jurisdiction of the island is allowed as follow:
- Family (cumulative) type – they secure the family and heirs chosen;
- Not of charitable nature;
- With the right to profit from ownership – with lifetime possession;
- Low involved formats – target, mixed, enforcement and other types.
Guernsey Trust – its creation and organization chart aspects
Guernsey is known for no fixed small capital and ultimate simplification of trust formation procedure.
To obtain the legal personality, the following is required:
- To file and sign the contract followed by conclusion of the trust deed;
- To determine the intention to form the structure, the volume of assets and purposes to form the trust;
- To appoint a trustee, whose function may be performed by the agent/fiduciary of full age and licensed. If necessary, a protector may be assigned who can take over some functions that may complicate the subsequent operation of the structure;
- To complete the fund deposition – they may include funds and investments, real estate, land plots, furniture, embroidery, jewelry and a lot more.
To note, a trustee should be held liable for their deeds and actions that should comply with interests of the beneficiaries. Under conditions of insufficient volume of key assets, the administrator often fails to involve in the trust. The structure should have a guarantor who can monitor the administrator’s activity and its compliance with the deed. The function of an agent may be assigned to the protector, and as for the target trusts – to the controller.
Data disclosure and taxation
As per legal norms, the data on founders and beneficiaries may be requested from the trustee by regulatory agencies. However, it is rather the exception than the rule, and such requests are extremely rare. In general, all the trust-related information is reliably protected. It does not require reporting, registration and accounting each year – where it is preferred to be maintained.
The currency monitoring is absent, either. The exchange of plan between jurisdictions is not allowed, re-domiciling is provided under the deed. The trusts do not pay to the budget, but if their property makes profit, it should be separated from the fixed capital for purposes of reasonable taxation.
If you are concerned in the possibility to form a trust in Guernsey, we will be happy to render any and all assistance at all stages.
