The Jersey law on trusts
Unlike England, there has never been a dual system of law and equity in Jersey and for a long time the validity and enforceability of trusts in Jersey was clouded in some obscurity, especially as regards trusts relating to immovable property.
Duties of trustees
Must act impartially in the interests of all the beneficiaries;
Must keep trust accounts and accurate records of distributions and administrative decisions;
Where there are several trustees they are under a general duty to act together;
Must preserve and enhance the Trust Fund so far as is reasonable;
Must not make speculative investments;
Must administer the trust with due diligence as would a prudent person to the best of his ability and skill and observe the utmost good faith.
Powers of trustees
During the lifetime of a trust and as long as he is a trustee, a trustee must exercise the powers set out in the trust deed. These generally will include the following:
- Wide investment powers which allow the trustees to invest in almost any kind of investment;
- Power to employ agents, investment advisors, nominees and custodians;
- Power to appoint new or additional trustees;
- Power to move the trust to another jurisdiction in the event of political upheavals, the election of an unfavourable government change the proper law and place of administration of the trust;
- Power to transfer the whole or part of the Trust assets to a new trust provided the beneficiaries of the new trust include beneficiaries who were intended to benefit from the original trust assets;
- Power to establish companies and to transfer any part of the trust assets to those companies. The use of a dual structure can provide taxation benefits;
- Other powers may include a power to borrow, to make loans with or without interest, to pay fees and expenses, to pay taxes, to carry on trade and to insure the trust assets.
Trusts and companies
The Settlor passes legal ownership of the assets to the trustee once the trust deed is signed.
The trust deed can be tailored to suit each client’s requirements. The trust deed itself does not have to include the Settlor’s name. There is no requirement to register the trust deed in any public register in Jersey, nor are accounts filed. Anonymity is therefore possible. A draft deed can be made available on request.
The Settlor can request the trustee to administer the trust fund in specified ways, by a personal “Letter of Wishes”. The trustee refers to this for guidance, but it is not legally binding. This letter would normally include guidance on investment policy and the distribution of both income and capital.
The Settlor can, in practice, exercise a further influence over the ultimate application of the trust fund by using a “Protector”, who is specified in the trust deed. Certain supervisory functions can be given to a protector: For example, the trust deed may provide that the trustee cannot appoint funds to the beneficiaries without his consent. The protector may also be given the power to remove and replace the trustee. The person chosen would normally be a family friend or trusted adviser. Using a Protector is more complicated, and liable to increase administration time, and therefore cost.
Even though the trustee may be resident in Jersey, provided no beneficiary is resident in Jersey and no income other than bank interest arises there, by concession no Jersey tax is payable. Similarly, provided neither the Settlor nor the trustee nor any of the beneficiaries is domiciled or resident in the United Kingdom, the trust can be administered in Jersey in such a way that United Kingdom tax is not relevant.
In addition to taxation advantages, trusts may be of assistance with inheritance and incapacity difficulties and may be used to make provisions for future contingencies.
Trusts are, therefore, a flexible and secure way of holding assets to suit the requirements of the client or his family.
Our company licensing services
— What we do and do not do
Our company is EXCLUSIVELY engaged in assisting worldwide clients, either individuals or corporate entities, to get duly and properly licensed with local Regulators and Financial Authorities to get respective official licenses to legally carry out their cryptocurrency or financial related business activities.
TBA & Associates Tax Business Advisors does not provide or carry out any sort of Cryptocurrency or Financial services!
Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.