Key Features
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.