The Guernsey Trusts Act in the 2007 edition is the fundamental act for the establishment of the Trust in Guernsey.
As in other jurisdictions, several types of trusts are allowed in Guernsey:
- Discretionary;
- Accumulation;
- Uncharitable;
- Trust with the right to receive income from property;
- Mixed.
Use of the trust in Guernsey.
The founder, who gave the property to the trustee, loses the property right. Thus, a number of advantages are achieved with regard to the taxation, and it is also possible to achieve assets protection against aggressive seizure by third parties.
Traditionally, discretionary trusts are used in Guernsey. They perfectly solve the problem of tax planning and are suitable for those who want to protect their assets.
Features of the trust in Guernsey.
To create a trust in Guernsey, you do not need to contribute a fixed amount of the authorized capital. But it is important that the activities of the trust coincide with the interests of the beneficial owner. If there is no guarantee of the costs of the trust (insufficient volume of the asset base), the trustee is unlikely to become a fiduciary. Nomination of capital can be made in any currency.
The following types of assets can be invested in the trust:
- Money;
- Land;
- Buildings;
- Boats;
- Investments;
- Furniture, paintings;
- Jewelry;
- Aircraft;
- High-quality wines, etc.
If there is an income from the property, then for the purpose of reasonable taxation, calculations for income and capital are made separately.
Establishing a trust in Guernsey.
In order to establish a trust in Guernsey, it is necessary, first of all, to conclude an appropriate contract. In addition, a signed trust declaration is required.
Conditions for trusts in Guernsey:
- Presence of a written desire to create a trust;
- Determination of the assets to be invested in the trust;
- Identification of accurate and clear goals.
Founders of the trust can be, in particular, legal entities.
Only licensed agents are allowed to be a trustee.
Protectors can act as agents of the founder. They, as a rule, enjoy certain powers (for example, the right to replace trustee). However, too much authority for the protector often leads to complications in the management of the trust.
Similar functions are assigned to controllers in the purpose/special trusts.
The trust does not need to be registered, so there is no database on trusts. This opens the means to full owner privacy.
Information about the founder can be requested through trustee, but for this, certain conditions must be met.
Exchange of information on trusts within the framework of relations between jurisdictions is extremely rare.
There is no exchange control and other financial restrictions.
Redomiciliation of trusts (subject to certain conditions) is possible.
Submission of reporting.
It is only recommended to file financial statements.
There is no requirement for mandatory audit.