Head of Private Wealth, Guernsey, Intertrust Group
Clients looking for flexibility when managing their family wealth or purchasing real estate should consider a trust structure in Guernsey
Guernsey’s well-regulated and flexible trust structures offer many advantages for wealth management and real-estate investments.
High-net-worth individuals and families often opt to set up trusts to protect their assets from uncertainty, and to deal with succession planning involving family members across several jurisdictions and generations.
They may also consider trusts for managing property investments, which have potential planning and tax pitfalls that clients need to be aware of.
Using a Guernsey trust can mitigate some of these risks.
Why set up a trust?
A trust is a legal arrangement structured by specialist private client advisors, who assist the client to entrust his or her assets to a trustee – either a person or a company – to manage these assets for one or more beneficiaries.
As the legal and beneficial ownership are separate, the trustee will be the registered owner of the trust assets, not the beneficiaries.
Trusts can be used to preserve family assets for future generations, to protect those who are unable to manage their own affairs or to promote charitable giving.
Why use a Guernsey trust?
Clients looking for additional flexibility when it comes to wealth management and real-estate investments may consider a trust structure in Guernsey, as the jurisdiction offers several strategic advantages.
Guernsey is home to more than 1,000 STEP members and an established network of highly experienced advisors who can help set up a structure appropriate to the client’s particular needs.
Guernsey trusts provide asset protection from legal claims, as well as perpetual duration, tax neutrality, protection from forced heirship claims, and a stable, well-regulated jurisdiction.
1. A tax-neutral jurisdiction
Guernsey is a tax-neutral jurisdiction: taxes are paid in the jurisdiction in which the client is tax-resident, and there are no estate, gift, inheritance or capital gains taxes. No transfer taxes are due when assets are moved into a trust.
Confidentiality is also a consideration when choosing where to set up a trust. Guernsey’s 2001 Data Protection Law strongly protects the confidentiality of personal data.
While confidentiality is key, the jurisdiction complies with international policy in respect of the fight against tax fraud, evasion and avoidance. It has 60 tax information-exchange agreements with other countries, including 16 of the G20 nations. Guernsey also has 14 full double taxation agreements (DTAs) and 12 partial DTAs in place. Guernsey supports CRS and FATCA reporting and was one of the early adopters of both.
In further recognition of Guernsey’s high standards for international finance, the Organisation of Economic Co-operation and Development (OECD) has designated the island as a “white-listed jurisdiction”. Additionally, Guernsey was determined as “compliant” or “largely compliant” with 48/49 of the Financial Action Task Force’s (FATF) recommendations for anti-money laundering and combating the financing of terrorism – the highest score of any jurisdiction assessed, including those onshore.
2. Guernsey trusts offer asset protection
Protecting assets from future creditor claims or divorce proceedings should be a priority for successful wealth planning.
As a result, high-net-worth individuals and their families choose to establish asset protection or self-settled trusts in territories that recognise these structures, such as Guernsey.
In a self-settled trust, the grantor and the beneficiary are the same person. Creditors are not able access the trust assets unless certain conditions are met.
3. Guernsey trusts benefit from perpetual duration
Trusts set up in Guernsey can exist in perpetuity – unlike the UK and the US, where trusts have a limited lifespan usually linked to the life of a person.
A key advantage of perpetual trust is that it can exist for several generations.
4. Guernsey trusts offer protection from forced heirship
Guernsey trusts enable individuals to dispose of their property freely, protecting their assets from forced heirship claims, which are recognised in many jurisdictions.
Guernsey law does not recognise foreign court orders if they are inconsistent with its own trust law. This is part of Guernsey’s extensive “firewall provisions”, which are in place for the purpose of protecting the interests of the beneficiaries of the trust.
5. A well-regulated, self-governing jurisdiction
Although Guernsey is a British Crown dependency, it’s neither part of the United Kingdom nor the European Union. It has its own constitution and enjoys political and economic stability.
It also benefits from a mature legal system influenced by English law, providing clients the confidence to set up trust structures in Guernsey.
How Intertrust Group can help you in Guernsey
Guernsey’s well-regulated and flexible trusts offer many advantages for wealth management, but it’s still important to get local tax and legal advice before establishing any structure on the island.
Intertrust Group can provide additional advice for international family planning vehicles, facilitating meetings with key law firms and accountants when needed.
We can set up trusts, provide trustees and assist clients with the accounting of consolidated reporting. Most importantly, we can draw on our extensive experience to help provide solutions to potentially challenging family considerations. We are truly a partner for our clients to navigate changing circumstances and protect future generations.
We have an extensive network of offices around the world dedicated to wealth management, with advisers based in several jurisdictions.
Why Intertrust Group?
- Intertrust Group is a publicly listed company with 70 years’ experience in providing world-class trust and corporate services to clients around the world.
- Intertrust Group provides a wide range of financial and administrative services to clients operating and investing in the international business environment. We help companies to expand globally, offering support with restructuring, outsourcing and further developments.
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